FAQs about Lease and Rental Agreements

FAQs about Lease and Rental Agreements

Do I need a written lease agreement?

Yes, it is always a good idea to get a written lease agreement. Although, most of the time, oral agreements made between tenant and landlords regarding the use of their property can be legally enforced, it is hard to verify the terms, as each party may remember them differently. Getting it in writing can prevent future disputes and misunderstandings.

A lease or rental agreement is an important document that can address important issues regarding tenancy such as:

• How long is the tenancy period

• Deposits and rent that the renter will pay

• The actual number of people who can live on the rental property

• Utilities and who will pay for it

• Pets are allowed or not

• Can the tenant sublet the property

• Landlord's access to the rental property

• Who will pay the lawyers fee if there is a lawsuit concerning the meaning or implementation of the lease or rental agreement

What's the difference between rental and lease agreement?

A rental agreement is short period tenancy often around 30 days and the contract is renewable after the tenancy period. On month-to-month rentals, the landlord can add or change some terms in the agreement with a proper written notice.

On the other hand, a written lease has a set term. It can be six months to a year or longer for as long as the rent is being paid and the terms of the lease contract are being followed. Unlike in the rental agreement, the landlord cannot make changes in the terms of tenancy during the lease period unless the tenant agrees.

A lease that has expired will not automatically renew, unlike in case of the rental agreement. If the tenant opts to stay, and the landlord consents, theagreement can be renewed for a fixed term or become a month-to-month and the tenant will be subject to rental terms that were on the lease.

Are there restrictions on how much a landlord can raise the rent?

Most states do not limit the amount of rent a landlord can charge. However, rent control ordinances in some cities and counties do regulate how much a landlord can charge and limit increases in rent (please see below). If a rent control ordinance does not apply, a landlord can raise the rent after giving the tenant a proper written notice. Generally, the landlord may raise the rent for a month-to-month tenancy by giving the tenant 30 days' notice, though some states require 45 or 60 days' notice.

To raise the rent on leased property, the landlord must wait until the end of the lease term, unless the tenant agrees or the terms of the lease allow it. At the end of the tenancy, the landlord and the tenant may enter into a new lease with new terms regarding the rent, or they may continue the expired lease on a month-to-month basis. Rent control ordinances limit rent increases on rent-controlled properties.

Can a landlord charge a late fee?

Yes, a landlord can charge a tenant a late fee when rent is received after the due date. A landlord must include the late fees in the rental or lease agreement. Some states limit the amount a landlord can charge in fees, but even states without limitations will prohibit unreasonably high late fees. Typically, a late charge of less than 5% of the rent is acceptable.

How does rent control work?

Rent control was introduced by the federal government during World War II along with other price controls. Since then, it has been abolished almost everywhere. Rent control ordinances exist in a few communities in California, Maryland, New Jersey, New York, and the District of Columbia. These localities have laws that limit the landlord's ability to set the rent and they limit the amount and frequency of rent increases. It also limits a landlord's freedom to terminate tenancy at will. They need to show a legal cause for termination.

Most city and county ordinances also allow a landlord to raise the rent when a tenant moves out or if the landlord receives the Rent Control board's approval. Rent control laws only apply to specific properties, usually older residential properties built before a certain time.

How much security deposits can a landlord charge? What is it used for?

A security deposit is allowable in all state once a tenant moves in, the amount can be a month or two of the rent depending on the state and it is deposit is placed into a separate account. The deposits are normally to protect the landlord for unpaid rent and damages beyond normal wear and tear.

After a tenant vacates a rental unit, the landlord must return the unused amount of the security deposit to the tenant within the time specified by state law.

When is rent due?

A landlord can require a tenant to pay rent on any day of the month or even multiple times per month. In most cases rent is due on the first day of the month. In many states, if the due date falls on a weekend or a legal holiday, the rent is due the next business day.

What terms in a lease agreement favor the landlord?

The following examples are of provisions that favor the landlord:

• Automatic rent increases based on the landlord's increased operating costs

• Shared utility meters

• An agreement to obey future rules implemented by the landlord

What terms in a lease agreement are illegal?

In many states, the inclusion of the following terms will result in the invalidation of the lease or rental agreement:

• "Hold harmless" clauses -- a tenant waiver of the right to sue the landlord

• A provision that waives the tenant's right to a refund of a security deposit

• A waiver of the landlord's duty to keep the premises habitable A provision that permits the landlord unrestricted entry beyond what the law allows

A renter should also avoid signing a lease or rental agreement with blank spaces.