Lease Agreement

What is a lease agreement?

A lease agreement is a rental contract between a landlord and tenant. The lease agreement outlines the landlord tenant relationship, and can include details such as how the tenant may use the rental property (and for how long), the amount of security deposit (if any), how much and how often the tenant will pay rent, and other important aspects of the lease.

Comprehensive lease agreements are important since they outline the terms that both the landlord and tenant agree to prior to the renting of the property. If either party fails to uphold their obligations as outlined in the lease agreement, the other party may opt to terminate the agreement or take other legal action.

Lease agreement FAQs

How long does a lease agreement last?

The length of a typical lease agreement largely depends on whether you are dealing with a commercial or residential lease. While many lease agreements cover a period of 12 months, it's not uncommon for commercial leases to last 5 to 10 years. Residential lease agreements, on the other hand, could last one year, as is typical with the renting of residential property, but they could also last for several years if the tenant and landlord agree on an extended rental period.

Is a lease agreement the same as a rental agreement?

The terms lease agreement and rental agreement are often used interchangeably, but they aren't exactly the same. While both a lease agreement and rental agreement outline the terms of a property rental, rental agreements are more commonly used for short term rentals, including month-to-month leases, while lease agreements are used for longer term rental agreements—usually lasting one year or more.

The decision to use a lease or rental agreement is largely up to the property owner and how comfortable they feel in leasing out their property for longer periods of time.

What terms should be included in a lease agreement?

The terms of a lease agreement are largely up to the landlord, but most residential lease agreements will include the following:

• A description of the property being leased
• The length of the tenancy (for example, 12 months)
• The names of the landlord, tenant, and every occupant that will be inhabiting the property
• The security deposit and rent amounts, as well as the date by which the tenant must pay rent every month
• A list of utilities or other services included in the lease agreement
• A description of the consequences of breaking the lease agreement, such as what constitutes grounds for eviction, etc.

Are lease agreements negotiable?

Yes, it’s possible to negotiate the terms of a commercial or residential lease. Tenants and landlords can negotiate about lease terms, rent payments, security deposits, and other aspects of the lease agreement, provided they are still adhering to any rules or regulations that govern such agreements. Once the landlord and tenant agree on the terms, they can draft a new lease agreement that outlines the rules in detail.