Rental Lease Agreement - Common Facts To Keep In Mind

Learn all about creating a rental lease agreement and how to make sure you do it right and complete it quickly.

When a person (lessee or the user) agrees to pay the other person (the lessor or the owner) for the use of an asset owned by the other (the lessor) it is called a lease. In simple words when an asset owned by one person is lent to another to use and the other agrees to pay a fixed amount for the use of that asset, it is called a lease.

A rental lease agreement is a lease where the asset that is rented is tangible. Tangible assets are those assets that can be touched and is inclusive of real estate (or immovable property like a building, land or a commercial estate) and moveable property (like equipments and vehicles etc).

A rental lease agreement is a legally binding contract on both parties (the tenant and the landlord). Though every lease agreement form is different and can have specific and different clauses required by different states and will depend upon the asset that is being leased. For a business property a commercial lease agreement will be best.

However, every lease will necessarily have the following elements:

1. Name, address and other contact details of the tenant and the landlord.

2. The duration of the lease - the start and end dates.

3. The complete identity of the asset – address, chassis number and/or make and model.

4. Whether the lease can be renewed or not – and on what conditions.

5. How much and the frequency of the payment (also called the rent of the property).

6. Security deposit if any and the conditions of its return.

7. The parties who are living in the house – relatives, families, children and roommate etc.

Since all rental lease agreements are different, it is necessary that you have sought legal advice before drawing up your agreement form.  Every state has its own rules and regulations for a rental lease agreements.

For example sharing a house with a roommate is a good idea to lower the price burden, however when you wish to remove him from the property there can be legal complications and some states even have an eviction process that you must follow.

There are different rules for letting a property on rent and only a qualified real estate lawyer will be able to draft an application that is legitimate and legally binds the parties to the agreement. For example the state of California has strict rules the disable the landlord from using “self-help” techniques (like changing the locks) to end the contract. 

Similar laws are prevalent in the states of Texas and Florida. It is a good idea then to consult a lawyer to understand these simple yet stringent laws of each state.

A template of the rental lease agreement can be downloaded for free from the Internet. The form is available as a word document and also as a PDF document and can be used as a sample agreement form on which your own agreement form can be drafted.

Before renting out any asset – is it a residential building, a commercial property or even just a piece of land – you must make sure you have a rental agreement drawn up and signed by both parties.

Go back to the agreements category page or the land contract forms home page.