Apartment Resources

Leases 101: Overview of Lease Agreements

What is a Lease?
A lease is a legally binding contract that states the terms and agreements between the tenant and the landlord. By entering into a lease, a tenant binds himself or herself to the lease’s obligations such as the duty for the tenant to pay rent. Rental agreements can be either oral or written. It is very important to read through every clause and provision that is included in the lease before signing a lease.

Is there more than one kind of lease?
Yes. The two main kinds of leases are tenancy for years and a periodic tenancy. A tenancy for years binds the tenant and the landlord to the lease for a fixed period of time. If the term of the lease lasts longer than one year, then the agreement must be in writing. A periodic tenancy continues indefinitely.This type of tenancy automatically renews from one period to the next until a notice of termination is given by either party. A notice of termination is required for a period tenancy.

What happens if the tenant wants to break the lease early?
Generally, if the lease is broken prior to its expiration date, and the landlord is not at fault, then the tenant can be held liable for the rent until the lease expires or until the apartment is re-rented by another tenant. Upon receiving notice of the tenant’s desire or need to break the lease, the landlord is required to make a good faith effort to find a new tenant as quickly as possible; however, if the landlord is unable to find a new tenant willing to pay the full amount that is required by the agreement between the landlord and the lease-breaking tenant, then the lease-breaking tenant is required to pay the difference.

Are "late fees" legal?
Maybe. Late fees are enforceable if the landlord can show proof through documentation that he or she has lost money due to the late payment of rent. Late fee clauses usually cannot stand alone as a penalty. It must be reasonably related to an actual loss incurred by the landlord, or it cannot legally be enforced. It is important to check the applicable laws of your state or municipality.

Are there legal regulations for leases?
Yes. Every lease agreement must comply with the legal regulations that are placed by state or municipal law. For instance, Courts have held that there are certain clauses that must be included in a lease such as the duty for the landlord to maintain physical condition of the property. The U.S. Department of Housing and Urban Development is a good source for more information on landlord-tenant laws.

Can a landlord reenter a tenant’s apartment without notice?
No. Although the property is technically owned by the landlord, the landlord is required by law to provide sufficient notice before entering the tenant’s apartment during the term of the lease.  Even if the tenant does not pay rent or does not comply with the terms of the rental agreement, the landlord is not allowed to take matters into his or her own hands. The landlord is required to follow eviction procedures set by state or federal laws. The only way a landlord can reenter the apartment in order to remove the tenant’s property is by a court order. Leases that force a tenant to waive his or her right to the full eviction procedure cannot legally be binding. Again, it is important for you to look into the landlord-tenant laws set by the state or municipality.

Are leases negotiable?
Yes. Tenants should take note of the fact that standardized lease forms are drafted by lawyers who have the landlord’s interest in mind while writing all the terms of the lease. Tenants should read through the lease very carefully and try to remove any clauses or provisions that they are uncomfortable with. The entirety of the lease is legally binding once it is signed, so it is a good idea to make sure you are able to comply with all the clauses within the lease before committing yourself for the set term.

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