WHAT NEEDS TO BE IN YOUR LEASE

WHAT NEEDS TO BE IN YOUR LEASE

A lease agreement is a form contract between a landlord and a tenant that outlines what the tenant will pay monthly for rent and for how long. The lease agreement states and details the obligations and responsibilities of the landlord (lessor) and the tenant (lessee). It explains the rules the landlord and tenant have agreed upon in regards to any crucial business detail like length of the lease, how much the monthly rent will be, and who will be responsible for upkeep of the property.

Once your lease agreement is signed, it rules what the landlord and the tenant can and cannot do during the term of the lease. The lease agreement represents a legal, binding contract as well as an immensely practical document between the landlord and tenant and will be used as such by the court if any legal proceedings arise between the two parties.

A lease is a right to the possession of a property belonging to the landlord. In a lease transaction, the title transferred to the tenant is exclusive possession and not ownership. Consequently, the landlord reserves ownership of the leased property which can not be transferred to the tenant except by way of alienation (using a Contract of Sale and a Deed of Assignment) or gift (Deed of Gift).

Depending on the terms of a Tenancy Agreement or a Commercial Lease Agreement, the tenant may transfer this right of possession to another called a subtenant or sub-lessee who will be bound by the same terms and conditions of the agreement between the landlord and the tenant.

BASIC TERMS IN TENANCY AGREEMENT

• Names of all tenants: Every adult who lives in the rental unit, including both members of a married or unmarried couple, should sign the lease or rental agreement as tenants This makes each tenant legally responsible for all terms, including the full amount of the rent and the proper use of the property. This means that the landlord can legally seek the entire rent from any one of the tenants should the other for any reason be unable to pay; and if one tenant violates an important term of the agreement, the landlord can terminate the tenancy for all tenants on that lease or rental agreement.

• Limits on occupancy: The agreement can specify that the rental unit is the residence of only the tenants who have signed the lease and their minor children. This guarantees the landlord’s right to determine who lives in his property–ideally, people whom you have screened and approved–and to limit the number of occupants. The value of this clause is that it gives the landlord grounds to evict a tenant who moves in a friend or relative, or sublets the unit, without his permission.

• Term of the tenancy: Every rental document should state whether it is a rental agreement or a fixed-term lease. Rental agreements usually run from month to month and self-renew unless terminated by the landlord or tenant. Leases, on the other hand, typically last a year. Your choice will depend on how long you want the tenant to stay and how much flexibility you want in your arrangement.

• Rent: Your lease or rental agreement should specify the amount of rent, when it is due (typically, the first of the month) and how it’s to be paid. To avoid confusion and head off disputes with tenants, spell out details such as:

–acceptable payment methods (such as personal check only)

–whether late fees will be due if rent is not paid on time, the amount of the fee and whether there’s any grace period, and any charges if a rent check bounces.

• Deposits and fees: The use and return of security deposits is a frequent source of friction between landlords and tenants. To avoid confusion and legal hassles, your lease or rental agreement should be clear on:

–the amount of the security deposit (be sure you comply with any state laws setting maximum amounts)

–how you may use the deposit (for example, for damage repair) and how the tenant may not use it (such as applying it to last month’s rent).

–when and how you will return the deposit and account for deductions after the tenant moves out, and

–any legal non-returnable fees, such as for cleaning or pets.

It’s also a good idea (and legally required in a few states and cities) to include details on where the security deposit is being held and whether interest on the security deposit will be paid to the tenant.

• Repairs and maintenance: Your best defense against rent-withholding hassles and other problems (especially over security deposits) is to clearly set out your and the tenant’s responsibilities for repair and maintenance in your lease or rental agreement, including:

–the tenant’s responsibility to keep the rental premises clean and sanitary and to pay for any damage caused by his or her abuse or neglect.

–a requirement that the tenant alert you to defective or dangerous conditions in the rental property, with specific details on your procedures for handling complaint and repair requests, and

–restrictions on tenant repairs and alterations, such as adding a built-in dishwasher, installing a burglar alarm system or painting walls without your permission.

• Entry to rental property: To avoid tenant claims of illegal entry or violation of privacy rights, the lease or rental agreement should clarify the landlord’s legal right of access to the property–for example, to make repairs–and state how much advance notice you will provide the tenant before entering.

• Restrictions on tenant illegal activity: To avoid trouble among your tenants, prevent property damage and limit your exposure to lawsuits from residents and neighbors, you should include an explicit clause prohibiting disruptive behavior, such as excessive noise, and illegal activity, such as drug dealing.

• Pets: If you do not allow pets, be sure your lease or rental agreement is clear on the subject. If you do allow pets, you should identify any special restrictions, such as a limit on the size or number of pets or a requirement that the tenant will keep the yard free of animal waste.

• Other Restrictions: Be sure your lease or rental agreement complies with all relevant laws, including rent control ordinances, health and safety codes, occupancy rules and anti-discrimination laws. State laws are especially key, since they may set security deposit limits, notice requirements for entering the rental property, tenants’ rights to sublet or bring in additional roommates, rules for changing or ending a tenancy, and specific disclosure requirements such as whether there has been past flooding in the rental unit.

Any other legal restrictions, such as limits on the type of business a tenant may run from home, should also be spelled out in the lease or rental agreement. Important rules and regulations covering parking and use of common areas should be specifically mentioned in the lease or rental agreement.

Essential Characteristics of a Valid Lease

1. Form of Leases. Leases may be made orally or in writing. However, it is better to have a written agreement.

2. Exclusive Possession. In a lease transaction title to the property is not transferred to the tenant, only the right to exclusive use and occupation of the property. During the lease term, the tenant has the right to exclude every other person from the property, including the landlord and his authorized agents, until the expiration or termination of the lease.

3. Certainty of Term. The lease term must be ascertainable. Hence, the duration of the lease must be certain. This may be a fixed term, for example, one year, two weeks, or one month. It can also be periodically (as in periodic leases), such as weekly, monthly, yearly. A lease must also have a certain commencement date. This is the date the tenant will start occupying the property. The commencement date must be a specific date or upon the occurrence of a specific event or circumstance. A lease that has no commencement date is invalid.

4. Certainty of Property. The rental property must be identifiable and ascertainable. The lease must specifically describe the extent and location of the property.

5. Capacity of the Parties. The parties to a lease must have the capacity to enter into a lease contract. The party granting the lease must actually be the owner of the property (the landlord) or the agent of the landlord. The parties may be natural or juristic persons and they must be properly described in the agreement.

6. Payment of Rent. Rent is usually paid by the tenant as consideration for the use and occupation of the property. This may be money or other valuable consideration. The rent may be paid in arrears except the lease states otherwise. The rent must be ascertainable and clearly specified in a lease agreement for the avoidance of doubt.

7. The Right to Reversion. The landlord has the right of reversion of the property after the expiration or termination of the lease. This means that the landlord retains the ownership of the property after the lease.

In Conclusion, It is important to understand that lease agreements are in place to protect both the landlord and the tenant and they are not contractual traps that need to be feared by either party. The most vital thing is to maintain communication through the entire process from prior to signing the lease until its expiration. With this in mind, most situations can be solved prior to resulting in legal complications.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com

WRITTEN BY CHAMAN LAW FIRM TEAM

EMAIL: chamanlawfirm@gmail.com

TEL: 08065553671, 08024230080