The number of rental households is on the rise according to a report dated February 23, 2025. In the second quarter of 2024, the percentage of renters in the United States increased by 1.9% compared to the same period the previous year, with rental households accounting for 34.4% of total households. Therefore, understanding rental or lease agreements is crucial.
As the number of renters continues to increase, it becomes essential to establish lease agreements that protect the rights of both landlords and tenants. Understanding the contents of a lease agreement or contract can prevent many troubles during relocation or disputes.
Lease agreements and rental contracts are two different types of documents. A lease agreement is a short-term contract, while a rental contract is a long-term agreement.
In a lease agreement, the parties are typically referred to as the landlord and tenant. However, in a rental contract, the landlord is usually called the “lessor,” and the tenant is referred to as the “lessee.”
Lease agreements usually last for 30 days. After the 30-day period expires, the landlord can adjust the rent, and the tenant can choose whether to continue occupying the property.
The term of a rental contract is typically six months to a year, with some extending even longer. For instance, commercial leases for storefronts are often multi-year agreements.
For tenants, choosing between these contracts depends on individual circumstances. For example, individuals who have just moved to a new city may prefer a short-term lease rather than a long-term contract. They might only need temporary accommodation while looking for a suitable house to purchase.
Regardless of the specific situation, both parties can terminate the lease agreement after the stipulated 30 days or another agreed-upon period.
A lease agreement may include the following:
– Rental property address
– Lease terms
– Rental amount
– Provisions regarding deposits, parking spaces, or storage areas
– Allowed number of occupants
– Pet policies
– Landlord’s right of entry into the property
Lease agreements or rental contracts are legally binding documents. Once signed, both parties must adhere to the terms. In monthly leases, either party wishing to not renew must provide advance notice. Long-term lease contracts usually require legal procedures for termination.
Some tenants may require a guarantor who assumes legal responsibility for rent payments and potential fines, often applicable to student renters.
While pets may be allowed, it is crucial to review the contract. Some landlords only accept specific types of pets, with certain breeds, such as pit bulls and rottweilers, potentially prohibited.
If you are a freelancer, ensure that you are allowed to conduct business within the rental property. Some landlords might restrict such activities.
It is crucial to understand the expenses you are responsible for. Lease agreements should detail the rent amount, payment dates, and consequences of late rent payments.
Individuals planning long-term residence may lean towards signing a longer lease contract. This is especially true for tenants seeking rent stability, as long-term contracts often lock in the rental rate for the duration, such as a one-year lease guaranteeing a fixed rent for that year.
Whether a lease agreement or rental contract, some basic information remains the same, starting with the names of the landlord and tenant (lessee).
Check if the contract includes additional benefits. For instance, does the rent cover utilities like water and electricity? Some properties include these utilities but not internet costs, which could increase living expenses if additional payments are required.
If the apartment has amenities like a pool or gym, will you need to pay additional annual service fees? It is essential to clarify the specifics of the rent and any additional charges.
Moreover, pay attention to deposit requirements. Typically, renting necessitates paying a one- or two-month deposit. Some landlords may also request an additional pet deposit.
Lease agreements not only outline the tenant’s responsibilities but should also clearly define the tenant’s rights, including:
– The property should be in a habitable state at the start of the lease.
– The property must meet residential standards.
– A joint inspection of the rental property must be conducted by both parties.
– The landlord must perform necessary repairs.
– Landlords must provide advance notice before entering the property.
– When landlords request tenants to vacate, they must provide valid reasons and sufficient time.
While tenants have these rights, they also have corresponding duties. They must pay rent on time and comply with regulations. If deciding not to renew, tenants must give advance notice and provide valid reasons. Tenants are also responsible for covering any damages to the property caused by personal actions.
Landlords also have rights, aiming to protect their rental property income.
Under certain circumstances, landlords can evict tenants before the lease term ends. For instance, prolonged rent arrears may serve as justifiable grounds for eviction. However, landlords must follow local legal procedures.
Signing a lease agreement or rental contract signifies entering into a legally binding contract. Aside from explicit rent payment terms, there may be hidden costs or restrictions.
Carefully read the contract to understand your responsibilities and rights.