A Lease Agreement, also called a Rental Agreement, is a legally binding contract signed between a landlord, who is the property owner or manager, and the tenant(s), who are the individuals living or working in the property. In exchange for rent paid in monthly, weekly, or other consistent increments, the tenants can use the property to their likes, so long it falls in line with the conditions laid out in the contract.
What is a Lease Agreement?
A Lease Agreement is a document that is used to outline the terms and conditions of a lease, and once signed, legally requires the tenant to make routine payments to the landlord until the contract end date.
What is included in a Lease Agreement?
Lease Agreements can vary substantially depending on the type of agreement chosen, the tenant’s use of the property, the length of the lease, the size of the property, and the varying rental laws in each state.
The conditions found within a typical lease agreement include the following:
- Names of the parties
- Lease Term (Start and End dates)
- Rent Amount
- Security Deposit Amount
- Utilities & Maintenance
- Access to the Property
- Required Disclosures
- Signatures of all parties
Leasing: A Step-by-Step Guide
Step 1 – Research + Tour the Property
The first action a prospective tenant typically takes is to scour the internet for apartments that fit their price range and preferences. Is there a washer and dryer located inside the rental? Will electricity, heating, air conditioning, and internet need to be factored into the monthly rent? Does the property require maintenance and renovation? While some of these questions may be answered by a quick internet search, a tenant can obtain far more information by inspecting the premises first-hand during a walk-through with the landlord. However, landlords sometimes require a rental application be completed before conducting a walk-through of the property. In this case, a walk-through should be completed at a later date.
Step 2 – Rental Application
If the apartment or home fits the tenant’s expectations and requirements, the landlord will then require the prospective tenant to complete a rental application. This will require the tenant to provide the following information:
- Basic Tenant Info – Includes the name of the applicant along with certain identifying information, such as a Social Security Number, full name, address, email, phone number, and driver’s license number.
- Employment Information – To ensure the rent will be paid on time and in full, the tenant will need to provide the landlord with proof regarding their employment status. This can be in the form of tax documents, paychecks, or the contact information of a boss or employee who can verify the tenant’s income.
- Rental History – Landlords will almost always reach out to an applicant’s past landlords to get an honest and accurate depiction of the type of renter the applicant is. If the applicant is a first-time renter, the landlord will require a list of referrals along with their contact information. These references should be chosen carefully, as their input regarding the applicant’s character can make or break their chances of renting the property.
- Credit + Background Check – Not always required in a rental application, the landlord may request the rental candidate to pay for a credit check. Like employment information, the credit check gives insight into whether the applicant is likely to be timely with their rental payments. Missed payments on loans, bills, and any accumulated debt will be available to the landlord.
Step 3 – Negotiation
If the landlord deems the applicant tenant worthy of renting the space and the tenant(s) are still resolute on renting the property, the parties will sit down and discuss the terms of the Lease Agreement. More often than not, the landlord will have a draft ready to be signed – it is up to the renters to ensure they are clear on the conditions contained within the document. If a written condition is not up to par with expectations, bring this up to the landlord before signing the document, and negotiate until a consensus is reached between the parties, as it is very difficult to change a term once the agreement has been signed.
Step 4 – Sign the Agreement
At this point, the tenant(s) should have read through the entirety of the agreement at least once, discussed any questions or concerns regarding the terms and conditions contained within the document, and reached concordance regarding said terms. The landlord and all tenants will now sign the lease agreement in the designated fields, officially putting the agreement into effect.
Step 5 – Security Deposit + Moving In
To cover any damage to the property or a missed payment, the landlord will require a security deposit. The amount is typically equivalent to one (1) months rent, although certain states have no limits on the amount that can be charged. After delivering the deposit to the landlord, the tenant(s) can begin moving into the property. Before moving any furniture into the space, it is very important the tenant(s) do a full examination of the property, writing down any signs of wear or damaged objects. Writing down all signs of wear prevents the landlord from deducting the damage from the security deposit at the end of the lease. In some states, it is a requirement to complete a Move-in Inspection to ensure all doubt is absent as to whether property damage is tenant-caused or not.
Lease Agreements by State
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
How to Complete the Agreement
Step 1 – Download the Agreement
Step 2 – Identification of the Parties
In the provided fields, enter the date that the parties are completing the document, followed by the full names of the Landlord and Tenant(s).
Step 3 – Beginning & End of Lease Term
- What day, month, and year the lease will begin
- The day, month, and year in which the lease will terminate
Step 4 – Property Address
Full address of the rental;
- Street Address
- ZIP Code
Step 5 – Monthly Rent
The full dollar ($) amount of rent due on the first (1st) of every month.
Step 6 – Late Charge & Returned Checks
Enter the number of days that can pass before the agreement is terminated (and eviction proceedings begin). Most states have a required amount of days that need to pass before the eviction process can begin. Enter the day of the month after which a late charge will be issued, along with the monetary amount of the late charge. For any returned checks, enter the dollar amount charge that will be billed to the tenant.
Step 7 – Utilities
Landlord will need to list all utilities that will be paid for. Any absent utilities are the responsibility of the tenant(s).
Step 8 – Security Deposit
In the underlined field, the Landlord will need to enter the full security deposit amount that the tenant(s) will need to pay before moving into the property.
Step 9 – Default
Landlord will need to enter:
- The number of days after the delivery of a notice that can pass until the agreement can be terminated.
- In the case the tenant does not pay rent on the due date, enter the number of days the default can stay in place until the entire rent balance will be immediately due and / or the agreement will be terminated.
Step 10 – Abandonment
Here, the Landlord will need to specify the number of days the tenant can remain absent from the property without paying rent or removing possessions, until it will be considered abandonment.
Step 11 – Smoke Detectors
Landlord states the length of time the tenant has to ensure all smoke detectors are functioning in the premises.
Step 12 – Additional Provisions
The state-specific mandated provisions for the lease agreement. Can vary widely depending on the state in which the agreement is being completed.
Step 13 – Date of Execution
The date in which signatures will be recorded on the document.
Step 14 – Signatures
In the provided fields, both the Landlord and Tenant(s) must write their full printed names and dated signatures.