Most of us have encountered a residential lease agreement at some point in our lives. Taking the time to understand these agreements can be essential to ensuring your rights—and the rights of others—aren’t infringed upon. Below, we answer some of the most common questions about residential leases to help no matter your situation.
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Understanding Residential Lease Agreements:
A residential lease agreement is a contract between a landlord and a tenant. Both the landlord and tenant (aka lessor and lessee) are identified in the lease and need to sign it.
A lease agreement dictates the terms of a rental arrangement, including how much rent is and when it’s due, who is responsible for paying utilities, the lease’s end date, and what happens if the lease is broken.
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There are several types of residential property leases. The type of lease will determine some important elements of the agreement.
The main differences between types of residential leases have to do with duration and who the agreement is between. Some of the below options are technically “rental agreements” as opposed to lease agreements, but they serve the same purpose: to dictate the terms of a residential rental arrangement.
The contents of residential lease agreements vary, though there are numerous terms that most leases speak to. States and cities often have statutes that regulate some lease terms. Whether you’re a lessor or a lessee, make sure you’re caught up on your state’s current laws to ensure your lease—and any enforcement thereof—doesn’t infringe upon renters’ rights.
The laws that govern landlords and tenants vary widely from state to state, city to city, and can change in accordance with current events. There are also federal laws that govern rental housing, and these too can change with the times. No matter what side of the rental coin you’re on, it’s essential to understand the basics of how rental housing laws impact landlords, renters, and applicants.
Some of the federal laws that most directly impact lessors and lessees include the Fair Housing Act and the Fair Credit Reporting Act.
The Fair Housing Act makes it “illegal to discriminate in the sale or rental of housing … because of race, color, national origin, religion, sex, familial status, and disability.”
The Fair Credit Reporting Act “protects information collected by consumer reporting agencies” including tenant screening services. Because of this Act, if a landlord uses a consumer report during the screening process (which might compile information such as rental history, credit report, and criminal records), they are required to tell the applicant if they’ve been rejected due to information found on the report. The applicant must also be informed if other actions are taken as a result of the report, such as a raise in rent or the requirement of a co-signer. In these cases, the Federal Trade Commission recommends providing applicants a written adverse action notice.
State statutes can dictate much about a residential lease, from security deposits to evictions to landlord/tenant rights and responsibilities. (Rights and responsibilities include things like keeping the property clean and safe.)
Regarding security deposits, state statutes provide various rules and restrictions. For example, Ohio has no limit on how much a landlord can charge for security deposits, but typically requires landlords to pay 5% interest on a tenants’ deposits. In Arizona, no interest is charged but security deposits cannot be more than 1.5 month’s rent.
State statutes can also govern rules around evictions due to unpaid rent, such as how long the tenant has to pay or move before being evicted, and how long the landlord has to wait to give notice of potential eviction. In Georgia, for example, rent can be demanded the second it’s due, eviction can be filed for immediately upon non-payment, and the tenant has 7 days to pay. In New York, written notice must be sent to tenants whose rent is five days late; they then have 14 days to pay.
Rental housing laws can be impacted by specific situations, especially in times of crisis. For example, the COVID-19 crisis prompted a temporary eviction moratorium at the federal level—applying to all states—that prohibited evicting residential renters, even in cases of unpaid rent.
Crisis-prompted rental housing regulations can also occur locally, though they do not always benefit renters. Not long after Hurricane Katrina, St. Bernard Parish (near downtown New Orleans) passed an ordinance stating single family homes could only be rented to “blood relatives” of the landlord to “preserve the integrity of established neighborhoods.” Violations of the ordinance came with fines up to $250 per day.
As detailed in a Nova Law Review article, a lawsuit was quickly filed against the parish. In part, the lawsuit stated the ordinance violated the Fair Housing Act, as it disproportionately impacted Black and Hispanic communities. (The vast majority of property owners/landlords in the parish were white.) The ordinance was repealed, but the parish instituted other restrictive rental ordinances in its place, prompting further lawsuits and an eventual settlement of over $1 million.
A co-signer is a third party who signs a lease in addition to the tenant. The co-signer is responsible for paying rent if the tenant fails to do so. Co-signers are most commonly required in situations where the renter makes under a certain amount of money.
Eviction is the legal process through which a tenant is forced to vacate the property they live in. Evictions are court-ordered, usually occurring after a tenant has broken the lease in some way. There are steps that must be followed to keep the eviction process legal. The exact steps vary by jurisdiction, but at minimum tenants must be given a certain amount of notice.
If a tenant doesn’t pay rent, they may be subject to eviction. But whether or not a renter can be evicted—and what actions must be taken to legally evict—depends on the terms of lease, as well as any applicable city, state, or federal laws.
A landlord may be able to withhold the entire security deposit if they feel they have cause to do so. The lease agreement should stipulate if a certain amount of money will automatically be withheld, and it should also detail what actions need to be taken by the tenant in order to have the deposit returned. Landlords must also make sure they’re in compliance with any applicable city/state laws.
Landlords should keep receipts and detailed records of any repairs made to the property after the tenant vacates. (This may even be legally required in some states.) The same is true for tenants. Take photos of the property after it is cleaned and thoroughly review the lease and any cleaning checklists provided by the landlord to ensure you cover all your bases.
It depends on why the lease was broken. Landlords typically have grounds to preemptively terminate fixed-term residential leases if the tenant violated some portion of the lease. But if the landlord doesn’t have cause to break the lease, there are few legal options that allow them to terminate a lease early. An exception to this is if an early termination clause is included in the lease. If such a clause is included, the landlord could terminate the lease early as long as sufficient notice is provided.