FAQs – Rental / Lease Agreements

Any landlord, whose main source of income comes from renting out his / her property should take care to draw up a fair, legally valid agreement, else there could be major legal repercussions if, either landlord or tenant break a lease or an agreement.

Ques. What is the importance of signing a lease or rental agreement?
Ans. Essentially important, a landlord must draw up a legally binding lease or rental agreement, which holds the key to a successful tenancy. It is a document that sets out important issues, such as:

1. Duration of the tenancy.
2. Rental and deposit amounts required to be paid by a tenant.
3. The number of people permitted to live on the rental property.
4. Whether, the landlord or tenant is responsible for paying for utilities.
5. Whether, pets can be kept on the rental premises.
6. Whether, the tenant is allowed to sublet the property.
7. Landlord’s access to the rental property, and last but, not least,
8. Who is responsible for paying for legal costs, in the event of a lawsuit?

Always, but always, leases and rental agreements should be put in writing, even though most states do accept oral agreements. Easy and informal, though they may seem oral agreements often lead to heated disputes. If, later on both landlord and tenant disagree about key elements of the agreement, such as, a tenant sub-letting, it could all, far too likely lead to a court argument, over what was said by either party, when it was said and in what context it was said. Usually, this is a particular problem, with long-term leases; therefore, courts in most states do not enforce oral agreements after a year has elapsed.

Ques. Is there a difference between rental agreements and leases? If, so what are the differences?Ans. The biggest difference between the two is the period of occupancy. A written rental agreement provides for a short-term tenancy, often 30-days, and which automatically gets renewed at the end of this period, unless the tenant or landlord end it by way of written notice, which again is typically 30 days. For month-to-month rentals, where rent is paid on a monthly basis, a landlord is allowed to change agreement terms, after proper notice has been duly giving in writing, and again subject to any rent control laws that may be prevalent in the state. Usually, the notice period is of 30-days, though certain states do permit a shorter period, in the case of weekly or bi-weekly rental payments, or if a landlord and tenant mutually consent to it.

On the other hand, a written lease offers a tenant longer term occupancy, anywhere from 6-months to a year, and sometimes even longer, so long as a tenant pays rent on time and continues to comply with other lease provisions. Unlike a rental agreement, when a lease expires, usually, it does not automatically renew itself. A tenant staying on with his / her landlord’s consent is, generally, considered a month-to-month tenant.

As well, a fixed-term lease means a landlord cannot increase the rent or change other tenancy terms during the duration of the lease, unless the changes are, specifically provided for in the lease, or the tenant concurs.

Ques. What are the consequences of a tenant breaking a long-term lease?
Ans. As a rule of thumb, a tenant cannot legally break a lease, unless the landlord significantly violates its terms. For example, if a landlord fails to make necessary repairs, or fails to comply with important health and safety laws. Certain states have put laws in place, allowing tenants to break a lease due to health problems, or job relocation that entails a permanent move.

A tenant found breaking a lease without adequate cause, is held responsible for the remainder of the rent due under the lease term. In most states, however, a landlord is legally duty-bound to try to find a new tenant, as soon as possible, regardless of why the tenant is leaving, rather than having him / her pay for the total rent due, as per lease terms.

Ques. Is it legally possible for a landlord to break a lease, thus ending a tenancy?
Ans. Legally, a landlord can break a lease if a tenant significantly violates the lease terms or breaks the law, e.g. pays rent late, keeps a pet in direct violation of a no-pets lease clause, substantially damages the property, or participates in illegal activities, such as, drug dealing on or close to his / her rental premises.

However, first of all, a landlord is required to send the tenant a notice regarding termination of the tenancy. State laws have set out very detailed requirements, as to how termination notices must be written and delivered or served. Depending on what the tenant has done to break the lease terms or the law, a termination notice must state the tenancy is over, warning the tenant he / she has to vacate the rental premises, if he / she wishes to avoid an eviction lawsuit. Or, if a landlord so wishes, he / she can issue a notice allowing the tenant a few days to clean up his / her act, such as, paying up the rent or finding a new home for the dog or cat. It is important to bear in mind that expensive litigation can be avoided, provide the tenant does as requested. If, a tenant refuses to comply with the termination notice, then the landlord is free to file an eviction lawsuit against the tenant.

To avoid expensive litigation, successful landlords will find screening prospective tenants and employees helps in weeding out undesirable elements with past evictions or criminal pasts. Visit www.e-renter.com for tenant screening and background check services.