Signing a Lease or Rental Agreement: FAQ

A lease or rental agreement is standard for rental properties. Lease agreements are legally binding on both the landlord and the tenant, so both parties should carefully scrutinize the agreement before signing.

This article answers some frequently asked questions about tenant rental and lease agreements. Find answers on rent increases, late fees, rental terms, security deposits, and more. Consult a local real estate attorney for answers to specific lease agreement questions.

What Are the Different Types of Lease Agreements?

The terms “lease agreement” and “rental agreement” are often used interchangeably. However, there are differences between the two types of binding contracts.

Rental Agreements

Generally, a rental agreement is a written agreement for a short-term rental. Most rental agreements are for month-to-month rentals. The landlord can change the rental terms and rent amount after giving the tenant proper notice. For month-to-month leases, landlords must provide at least one month’s notice.

Lease Agreements

A lease agreement is a written contract for a fixed term, meaning for a year or more. A tenant generally has greater protections under a fixed-term lease, as the landlord cannot change the terms of the lease until it expires.

After the lease term expires, the landlord and tenant may create a new lease or go into a month-to-month rental agreement. They may also decline to renew the lease at the end of the fixed term.

Sublease Agreements

If the landlord allows subleasing, the tenant may use a sublease agreement with their subtenant. A sublease agreement is a type of rental agreement tailored to the situation, with the primary tenant still responsible for the subtenant’s actions.

Commercial Lease vs. Residential Lease

Commercial leases cover commercial property. There are also several types of commercial leases.

Residential leases cover residential property.

Do I Need a Written Lease Agreement?

In most states, a rental agreement does not need to be in writing. Oral lease agreements are generally valid for rental periods of a year or less.

However, even if the state does recognize an oral rental agreement, a written agreement helps avoid problems and should be the preferred method. The landlord and tenant may have different understandings of the agreement. One advantage of a written lease agreement is that it serves as the final authority on disagreements.

What Terms Should the Lease Agreement Include?

Many landlords start with a standard lease agreement or use a lease agreement template. Standard lease terms for a residential lease agreement should include the fundamental rights and obligations of both the tenant and the landlord. Standard terms for a tenant lease agreement should include:

• Contact information for all parties to the lease, including property management, if any
• Description of the property, including the address of the rental unit and apartment number
• Term of the rental (fixed-term or month-to-month), including move-in and end dates
• Rent amount and rent payment details, including rent due date and grace period, if any
• Late rent policy
• Occupancy limits
• Amount of security deposit
• Pet policy or pet rent
• Subletting policy
• An addendum including required disclosures, such as lead-based paint disclosures

Landlords, property owners, and property managers should consult an attorney before finalizing a lease or rental contract. Doing so will help them avoid unintentional housing discrimination or abridging their prospective tenant’s rights.

Are There Any Terms To Avoid in a Residential Lease?

Residential lease agreements cannot include terms violating state or federal laws. This includes housing discrimination under the federal Fair Housing Act. Depending on the state, rental property agreements and leases may not contain provisions that include:

• Exclusion of tenants based on a protected characteristic
• Prohibition of children (unless the property is a senior housing facility)
• Waiver of legal remedies
• Waiver of the right to get a refund of the security deposit
• Waiver of the duty for the landlord to keep the premises habitable
• Waiver of the duty for the landlord to mitigate damages
• “Hold harmless” clauses, meaning a renter gives up their right to sue the landlord
• A requirement that permits the landlord unrestricted entry (beyond what the law allows)

What Terms in a Lease or Rental Agreement Should a Tenant Be Wary Of?

The following issues are warning signs that your tenant rights could be in jeopardy:

• Terms that favor the landlord and not the renter (terms should be fair for both people)
• Illegal terms
• Blank spaces on a lease or rental agreement

What Terms Unfairly Favor a Landlord?

A renter should be cautious when signing a lease or rental agreement that contains terms that unfairly favor the landlord. These can be harmful to the renter over time, such as:

• Automatic rent increases based on the landlord’s “increased operating costs”
• Shared utility meters
• An agreement to obey “future rules” implemented by the landlord

Are There Limits on Security Deposits?

Some states limit how much a landlord may require for a security deposit. Landlords typically charge at least one month’s rent before the tenant moves into the rental unit. Many states also require the landlord to keep the security deposit in a separate, interest-bearing account and pay the tenant the interest accrued through the end of the lease.

In many locations, the landlord cannot ask for more than one to two times the rent for the security deposit. For example, if the state limits the security deposit to two months’ rent, an apartment leased at $1,000 cannot have a security deposit of more than $2,000.

Many states limit the amount landlords can collect for a deposit. Landlords typically charge at least one month’s rent before the tenant moves into the rental unit.

Can the Landlord Keep the Security Deposit?

A security deposit generally covers property damage, repairs beyond normal wear and tear, and possibly unpaid rent. Landlords must account for any deductions from the security deposit, often through an itemized statement.

The landlord must return the security deposit (minus valid deductions) within their state’s security deposit timelines. Many states require landlords to return the deposit within 30 days after the lease ends.

When Can a Landlord Evict a Tenant?

Landlords and property managers should not evict a tenant without a legal reason. Eviction for cause includes:

• Nonpayment of rent
• Lease agreement violations, such as an illegal sublet
• Tenant engagement in illegal activities on the rental property

The landlord must follow state law throughout the eviction process and give the tenant notice and an opportunity to cure any issues. If the renter does not fix the issues, the landlord can go to court for relief.

A landlord can terminate the lease without cause at the end of a fixed-term tenancy. For example, under a one-year lease agreement, a landlord can give advance notice to terminate the tenancy at the end of the lease.

A botched eviction can harm your business reputation and your bottom line. It can also expose you to costly legal issues. If you’re a rental property owner, an experienced attorney can guide you through the eviction process and help you avoid legal mistakes. Find local legal help.

What Is Rent Control?

Some cities, such as New York City, have rent control ordinances. In New York City, rent control ordinances limit the rent a landlord may charge for a rental unit. This helps protect tenants from paying exorbitant rent increases and from eviction. Tenants can file a complaint with the New York Division of Housing and Community Renewal if their landlord violates the ordinance.

Rent control laws usually apply to specific properties, usually older residential properties built before a particular time. For example, New York City rent control laws apply to properties built between 1947 and 1971. Check with your local department of housing to determine if your home is or should be rent-controlled.

What Happens If a Tenant Does Not Pay My Rent?

Your landlord or lease agreement may have penalties for nonpayment of rent, with the next steps already in place. You will likely receive a “pay rent or quit” notice or an immediate eviction notice. With a landlord’s consent, you may have a few days or a week to vacate. If you do not leave when asked, they may sue you in an eviction lawsuit.

What Should Tenants Check for Before Signing a Lease Agreement?

Before signing a lease agreement, read the entire lease and ask questions about anything you need help understanding. Here is a list of things you should look out for in a lease or rental agreement:

• Rent: Ask when rent is due, how you should pay it, and whether the landlord charges a late fee for late payments or offers a grace period. In most cases, rent is due on the first of the month, but your lease should specify when and how to pay.
• Renters Insurance: Some landlords or property management companies make tenants show proof of renters insurance before they can move into the rental property.
• Pet policy: If you have a pet or want to get one, check the lease agreement for a pet policy. Many properties restrict breeds or have other pet rules, including a pet deposit. You don’t want to violate the agreement and risk eviction.
• Sublease: Can you sublet the rental unit, if needed? Check the lease for a subletting provision. If the lease doesn’t include a provision for subletting, ask your landlord or property manager. Some rental properties don’t allow sublets, and others charge a sublet fee. Don’t risk eviction by violating a legally binding lease agreement.
• Occupancy: Ask about occupancy limits. Some rental properties limit the number of people who can live in a rental unit at the same time. For example, a rental property may allow only two people to live in a studio apartment at a time. If you want to add a roommate, check your apartment lease first.
• Maintenance requests: Landlords should handle significant maintenance issues, like plumbing and pest control. Tenants often address minor maintenance issues, such as replacing light bulbs.
• Lease renewal: The lease should specify when and how your management company handles renewals. Some landlords ask for two months’ notice if you don’t want to renew the lease agreement. Lease renewal provisions help you and your landlord plan ahead.

Get Legal Help With a Lease or Rental Agreement

Lease and rental agreements are legally binding on all parties. It’s essential to understand what you are signing. A qualified, experienced landlord-tenant attorney can help. They can offer tailored legal advice for your lease agreement and explain any complex legal terms. You should be comfortable and confident with the terms before you sign.

FindLaw’s directory of landlord-tenant lawyers can get you started. Enter your city or ZIP code for a list of legal professionals in your area. Because state and local laws are relevant, your attorney should be licensed in the state where the rental property is. Your search results will also show important details about prospective attorneys, like ratings, areas of practice, and whether they offer free consultations.