What Should a Residential Lease Agreement Include?

Homeowners who are not able to sell their home quickly have the option of either waiting for a good buyer to come or renting out their property. While there may not be as many buyers in sight, an ideal choice would be to lease the home. At least with this option, the homeowner is assured of a steady income in the coming months compared to not getting any cash at all. 

Of course, as in any transaction involving real estate, a contract or agreement needs to be accomplished to make everything legal. The contract in this case is referred to as a residential lease agreement which binds the landlord and tenant. The landlord can either be the real homeowner or somebody assigned by the owner to manage the property. It is used to inform a tenant of all the terms and conditions of the rental so that all parties involved are aware of their responsibilities.

Some important provisions included in this type of agreement are the following:

Lease premises. This refers to the property itself and identifies its location.
Terms of lease. This pertains to the extent a tenant can use the property while he or she is occupying it.

Length of stay. This refers to the date the tenant starts occupying the place and the termination date.

Rental payment. This specifies the amount of rent to be paid by the tenant on a monthly basis.
Late fees. Should a tenant fails to pay his or her rent on time, landlords normally charge penalties for late payment.

Security deposit. This provides for the amount of security deposit and specifies the conditions on which it will be returned.

Quiet enjoyment. This is usually a promise that the tenant may enjoy the premises in a peaceful way.
Assignment and subletting. This defines the conditions of assignment and subletting the property.
Names of parties. The full names of the landlord and tenant including their signatures should be on the agreement.  

Condition of the property. This portion states if the property is in good condition or has some defects.

Pet policy. This should let the tenants know if they are allowed to keep a pet or not. The type of animal and its size must be specified.

Other details that may be included are the repairs covered or not covered, activities allowed and restricted and the right of entry.

It is important to note that the residential lease agreement prohibits the two parties involves from changing any of the terms during the lease period. A common lease period is one year or more. However, month-to-month tenancy is also allowed and may be for an indefinite period of time with the rental fee still being paid on a monthly basis. Although an oral agreement may be made, it’s always best to put everything in writing especially when fees or refundable deposits are involved.

Keep in mind that a written lease agreement will ensure that the owner’s rights are protected. Be sure to have the right knowledge on the laws of your state that concerns renting out properties. There are some states that require a lease agreement to provide a warning on the use of lead-based paint for homes built before 1978.