A residential lease or rental agreement is the blueprint of a tenancy: It lays out the rights and responsibilities of both the landlord and the tenants. It’s not only a binding contract that the parties can enforce in court; it’s also a highly practical document full of crucial business details, such as how long the tenants can occupy the property and the amount of rent due each month.
Regardless of whether you decide to use a lease or a rental agreement, you’ll want to address the following topics:
- Names of all tenants and occupants. Every adult who lives in the rental—including both members of a married or unmarried couple—should be named as tenants and sign the lease or rental agreement. Requiring all adult occupants to be official tenants is a form of additional insurance for landlords: Each tenant is legally responsible for paying the full amount of rent and following all other terms of the lease or rental agreement. This means that if one tenant skips out and fails to pay rent, you can legally seek the entire rent from any of the tenants. Also, if one tenant violates the lease or rental agreement, you have the right to terminate the tenancy of all the tenants—not just the offender.
It’s also a good idea to add an occupancy clause stating that only the tenants and their minor children are allowed to reside in the rental, and that guests may stay no longer than a set number of days. Then, if a tenant moves in an unapproved roommate or sublets the unit without your permission, you have the right to terminate the tenancy and evict all residents, if necessary.
- Description of rental. Include the complete address of the property (including building and unit number, if applicable). You’ll also want to note any specific storage areas or parking spots that are included. For example, if the rental includes assigned parking, be sure to write in the stall or spot number. Similarly, specify areas that the tenants are not allowed to access (such as a locked shed in the backyard).
- Term of the tenancy. Rental agreements create short-term (usually month-to-month) tenancies that renew automatically until the landlord or tenants terminate. Leases, on the other hand, create tenancies that terminate after a specific term (usually a year). Whichever you use, be specific: note the start date, the tenancy length, and (if creating a lease) the expiration date.
- Rent. Don’t just write in the amount of rent—spell out when (typically, the first of the month) and how it's to be paid, such as by mail to your office. (Make sure you comply with your state’s laws on paying rent.) To avoid confusion, spell out details such as:
- Deposits and fees. Avoid some of the most common disputes between landlords and tenants by being very clear about:
- the dollar amount of the security deposit (be sure you comply with any state security deposit limit laws)
- how you might use the deposit (for example, to cover unpaid rent or repair damage the tenant causes) and how you won’t use it (for example, you won’t accept it in lieu of last month’s rent)
- whether you expect the tenant to replenish the deposit in the event you have to make a deduction mid-tenancy (for example, if you repair a window the tenant’s child throws a ball through two months into the tenancy)
- when and how you will return the deposit and account for deductions after the tenant moves out (check your state’s laws on returning security deposits), and
- any nonrefundable fees, such as for cleaning or pets (make sure your state allows nonrefundable fees).
It's also a good idea (and legally required in a few states and cities) to include details on where you’ll hold the security deposit and whether you’ll pay interest on the deposit to the tenant.
- Repairs and maintenance. Your best defense against rent-withholding hassles and battles over security deposits is to clearly explain your repair and maintenance policies, including:
- the tenants’ responsibility to maintain clean and sanitary premises and to pay for any damage they cause (excluding normal wear and tear)
- a requirement that the tenants alert you to defective or dangerous conditions, with specific details on your procedures for handling complaints and repair requests, and
- restrictions on tenant repairs and alterations (for example, prohibit any painting of the unit unless you approve it in writing).
- Entry to rental property. To avoid tenant claims of illegal entry or violation of privacy rights, your lease or rental agreement should clarify your right to access the rental. It’s okay (if permitted under your state’s landlord access laws) to have different policies for different situations—for example, you might provide 24 hours’ notice before you enter to make repairs or show the unit to potential renters, but you might not be able to provide advance notice in an emergency.
- Your rules and important policies. If a rule or regulation is so important to you that you’d want to remove a tenant who violated it, be sure to include it. Other, not-so-vital rules can be written in a separate rules and regulations document. Landlords commonly include the following policies in their leases and rental agreements:
- No illegal activity: To limit your potential liability, as well as help prevent injury to others and your property, you should include an explicit clause prohibiting illegal and disruptive behavior, such as drug dealing, drug use, and excessive noise or nuisance.
- Smoking: You have the right to prohibit or restrict smoking of any kind in your rental. If you don’t allow smoking, you might want to note that the ban includes all forms of smoking—including marijuana or vaping. If you limit smoking, write out where and what tenants may smoke.
- Pets: You have the right to restrict or prohibit pets in your rental, with the exception of service and emotional support animals. If your rental is pet-friendly, include your pet policies: Write out how many pets a tenant can have, and specify what types, breeds, and sizes of animals you allow. Also note if pets must be on leash outside the unit, or if tenants must clean up pet waste in common areas or a yard.
- Contact information. Consider requiring tenants to contact you in writing about certain matters. Although texts and instant messaging might work for some discussions, you want to be able to keep a reliable—and printable, in the event you ever need to show a judge—record of all communications with your tenants. For example, you might state that tenants must request repairs in writing or give notice to terminate the tenancy by sending a letter to a designated address. If you agree to accept email, make sure that you regularly check email and have methods for saving (and backing up) everything you send and receive.
- Other restrictions. Federal, state, and local laws might require you to disclose certain information in your lease or rental agreement. For example, you might have to inform tenants about lead-based paint or the unit’s bed bug history. You’ll also want to make sure your lease or rental agreement doesn’t violate any rent control laws, antidiscrimination laws, or health and safety codes. Consider having a local landlord-tenant attorney review your lease or rental agreement to ensure it complies with all applicable laws.