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Lease Agreement: What Is It?
A lease agreement is an arrangement that allows a user, or lessee, to use an asset belonging to the owner, or lessor. A common use for a lease agreement is for the rental of property, but it can also be used for other things such as computers, vehicles, or household appliances.
The lease agreement is a legal contract, put in place to protect both the lessee and the lessor. It will include different clauses depending on the type of lease. For example, it may detail who is responsible for maintenance for a rental property, or what the deposit amount is for a leased vehicle.
A lease agreement should be in place before you begin to use any major asset you don't own. It ensures you know the ins and outs of the agreement, and protects you in case anything goes wrong with whatever you are going to be leasing.
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Contents Of A Lease Agreement
A lease agreement documents the right of one person (the Lessee) to use an asset belonging to another person (the Lessor). It is used in the loan of various valuable assets, such as vehicles, computers, appliances, and (most commonly) properties.
The rental agreement form is a legal document, outlining all terms of the lease and protecting the rights of both the Lessor and the Lessee.
It is crucial that you have a lease agreement in place before you begin renting anything valuable. Luckily for you, we have devised a lease agreement template that, when filled out, will generate a lease agreement form. You will need to have certain information on hand in order to successfully fill out the rental agreement template. In order to help you prepare, we have listed below the major components that form a rental lease agreement:
Property Details - This section denotes all major information about the property in question. This includes address, general description, as well as a legal description (sketch or survey)
Landlord Information - This includes contact information for the landlord, or Lessor. Typically this involves at least a full name, address, and phone number.
Tenant Information - This section provides the names of all tenants. On a standard lease agreement, a maximum of three tenants may be listed.
Terms of Residential Lease - This component embodies all particulars of the rental contract itself. This means the amount of rent due each period, the beginning and ending dates of the lease, the date the lease is signed, and the address to which lease payments must be sent. It also covers policies such as late payment and returned check penalties, subletting rules, and security deposit information.
Rights Responsibilities & Liabilities of the Landlord - The details of this section vary from lease to lease, but typically cover issues such as tax, repairs/maintenance, utilities, insurance, liability, and provision of furnishings.
Rights, Responsibilities & Liabilities of the Tenant - This section covers rights such as pets, guests, and peace and quiet, as well as responsibilities such as repairs/maintenance and utilities.
Damages & Insurance - This component deals with damages to the property - who is liable for what.
Keys - This portion details the number of keys distributed and the consequences of a tenant being locked out or losing his or her key.
Termination of Lease - This covers all aspects of lease termination. These include when a Lessor can terminate a lease, when a Lessee can terminate a lease, and how much notice must be given for both.
Lease Renewal - This section details when and how the lease may be renewed. It specifies whether or not the lease will be automatically renewed, and how long in advance the landlord must provide renewal documents,
Property Condition - This covers results of property inspection. These include general condition, wear and tear, and details that affect living conditions. These include: whether the property was built before 1978; whether any lead-based paint has been found on site; whether the property has flooded in the last three years.
Legal Considerations of a Lease Agreement Form
The relations between a landlord and a tenant can be smooth and easy, or they can be fraught with discord and disagreement. It’s not always a personality issue; sometimes it’s simply due to misunderstandings, incorrect assumptions, or misaligned expectations. Perhaps the best way to obviate these types of issues is by writing and signing a legally binding rental agreement. This type of document organizes the terms of the lease agreement in one place and spells them out so that disputes can be minimized. Additionally, a lease agreement form will clarify both the tenant’s rights and the landlord’s rights, and it is considered a legal document. A lease agreement template is often referred to as a rental agreement form, and the landlord or property owner is sometimes called a lessor while the tenant may be called a lessee. In essence, the lessee is making a legally binding agreement to pay the lessor for the use of the property (or at least part of it).
It is usually the lessor who drafts the lease agreement template, though both the lessor and the lessee will be expected to sign it. From the perspectives of landlords and tenants alike, there are a number of legal factors to consider when signing this form. One major consideration is the type of rental agreement; it can be month-to-month, or it can be fixed-term. Both types are very common, and they each have advantages and downsides. With a month-to-month rental agreement, there is no specific time limit to the lease; theoretically, the lessor-lessee relationship could last indefinitely. Generally speaking, this type of contract ends when either the tenant opts to vacate the property and pay whatever funds are owed to the landlord, or when the landlord chooses to terminate the contract for any reason. One common scenario is that the landlord decides to raise the rent and the tenant chooses to move out rather than pay the higher rent rate. In any case, the terms of the month-to-month agreement will be spelled out in the form and will usually stipulate that a certain number of days of written notice (for example, 20 days of written notice) be given prior to the announcement of the termination of the contract.
Then there is the other type of rental agreement, which is a fixed-term agreement. Rather than allowing either party to terminate the contract at any time, a fixed-term lease agreement legally binds both the landlord and the tenant to abide by the terms of the rental agreement for a specific length of time. A one-year contract is quite common, but multi-year contracts are also possible. For landlords, a fixed-term contract means that he or she cannot raise the rent during the time of the lease; for tenants, it means that they cannot simply vacate the property and stop paying rent unless the lessee agrees to terminate the contract.
The other major consideration is the security deposit. Most lease agreements will require a tenant to pay a sum of money upon signing the lease in order to cover the landlord’s expenses if the tenant breaks the terms of the lease or damages the property. This might be financially burdensome for the prospective tenant, but it is a necessary measure to prevent financial loss for the lessee. Still, prospective lessees will want to examine a lease carefully to ensure that the security deposit is reasonable and that any fees stipulated in the rental agreement are clear and understandable.
For more information on the legal considerations pertaining to rental agreements, it is instructive to search the Internet for free lease agreement forms and see what a sample lease agreement looks like. Locating free lease agreements online and reading them can be very helpful when learning about the legal terms and language used in these types of contracts. By educating yourself on the legal considerations of lease agreement templates, you’ll be well equipped to enter into a rental contract that benefits you and is fair to everyone involved.
Key Components of a Rental Agreement Template
A rental agreement might sound like an abstruse piece of legal work, but in actuality it’s nothing more than a lease – something you’ve surely seen if you’ve ever been a landlord or a tenant. Usually it’s the landlord, formally known as the lessor, who composes the rental agreement (or hires someone else to do it). Nevertheless, it is important for both renters and tenants to be familiar with the main components of a rental agreement. This is because a tenant, formally known as a lessee, should expect certain elements to be included in such an agreement when he or she signs it. For all parties involved, knowledge is an indispensable asset when considering whether or not to sign a rental agreement.
Now, there are a number of ways to approach the task of constructing a rental agreement. Hiring an attorney or other legal expert is certainly one way to accomplish this, but this route might be prohibitive due to its high cost. Besides, paying a large sum of money to a legal expert might not even be necessary, as rental agreement templates often look very similar and it’s entirely possible that the so-called legal expert is actually using a standard rental contract that he or she didn’t even write. Another option is for the lessor to attempt to write up a rental agreement himself. This is probably not a smart way to save money, since this is a legally binding document and a mistake or omission can end up causing a great deal of trouble. Probably the best solution is to locate and use a high-quality rental agreement template. Internet search engines can help you find a rental lease agreement template that fits your particular situation, and the best part is that oftentimes you can even find a free rental agreement if you include the word “free” in your keyword search.
It should be known, though, that not every rental lease agreement template is necessarily going to be correct or complete. A free rental agreement template is not such a great deal if it fails to include certain components. For starters, the names and all relevant contact information (address, telephone number, and e-mail address) should be somewhere in the rental agreement. Those names will be seen again toward the bottom of the document, where the lessor and lessee sign it. There also ought to be pertinent information about the property itself: where it is physically located (street address), any furniture and appliances included with the property, and any other relevant details about the property that is being leased. If any of these elements appear to be missing from a rental agreement template, then you should probably abandon that template and find another one.
In addition to the foregoing, any lease template will need to have certain financial information. In particular, there should be an indication of the expected monthly rent payment to be made by the lessee, as well as the security deposit that must be remitted upon signing the lease. Financial penalties for late payment or nonpayment of monthly rent also ought to be mentioned in the template. Moreover, a property damage clause specifying the financial consequences for damaging the leased property should be integrated into the rental contract.
A high-quality rental agreement template should leave room for some optional conditions that may pertain to the tenant. Certain questions may need to be answered in the lease such as: Will the price of the monthly rent include utilities? Are certain pets permitted on the premises? What are the due dates for rent payment? Is the standard lease agreement for a fixed term (such as one year), or will it be a month-to-month agreement? Keep an eye out for these considerations when searching for a rental agreement template.
To sum it all up, if you’re searching for a usable template for a rental agreement form, there are a number of vital components that you should expect to see in that document. Having a lease template with all of the necessary elements will help assure you that the document will serve its intended purpose and protect you from possible legal issues down the road.