You’ve found the perfect renter for your property. But don’t seal the deal based on a handshake and a conversation. Before handing over the keys, you need to write a rental lease for your new tenant.
A rental lease serves several important functions:
- It protects both you and your tenants by setting the terms of your agreement, helping to prevent any misunderstandings and laying the foundation for a good relationship.
- By specifying rules for the tenants, it assures that your property will be cared for in the way you want.
- It clarifies due dates and procedures for paying the rent, ensuring that you get your rent in a timely fashion.
- The signed lease serves as written proof of your agreement, helping to protect you in case there’s ever a dispute with a tenant.
Standard Elements of a Rental Lease
Now that you know why you need a rental lease, what should it include? There are several basic elements that should be included when you write a rental lease.
- Tenants’ names: List the full legal names of everyone who will be living at the property, including minor children.
- Cosigners’ names: If someone other than the tenant is cosigning on the lease (indicating they’re taking financial responsibility for the rent), include their legal name as well.
- Monthly rent: Specify the amount, due date, any late fees you will charge and the grace period before the late fees take effect (many states require a certain grace period). Also specify where to make payments, to whom they should be made and what types of payment methods you accept. For example, do you want to receive a check in the mail or get paid online via electronic funds through RentPay to your bank account? If the tenant is moving in before the day of the month they’d normally pay rent, state the amount of prorated rent and the due date.
- Security deposit or move-in fee: List the amount of any security deposit or move-in fee, when it must be paid and to whom, and what the tenant must do to get the deposit back when they move out. Be sure to follow any applicable state laws regarding security deposits and move-in fees.
- Occupancy limit: State laws generally restrict how many people can live in a property based on the number of bedrooms. Find out what your state’s laws are and clarify the occupancy limit in the lease. To prevent a situation where a tenant’s boyfriend, girlfriend or relative starts out as an overnight visitor and ends up living at the property, include a guest clause stating that tenants cannot move anyone into the property without your permission. Limits should be set on how long guests can stay before they need to fill out an application, be approved and be added to the lease.
- Pets: State whether pets are allowed and any restrictions on the number, type, breed or size. If you charge a pet deposit, indicate the amount and what the tenants need to do to get the pet deposit back at the end of their tenancy.
- Smoking prohibitions or restrictions: If you don’t want your tenants to smoke, vape or use e-cigarettes on the property, be sure to specify these terms when you write a rental lease.
- Restrictions on marijuana use, cultivation or sale: Marijuana is legal in a growing number of states. If you want to prohibit your tenants from using, growing or selling marijuana on your property, say so in the lease. (In states where marijuana is legal, you can’t forbid medicinal marijuana use.) Visit the Marijuana Policy Project to see what the laws are in your state.
- Renters insurance: Requiring renters to provide proof of renters insurance can help protect you against any claims due to damage or theft of their property.
- Maintenance: Spell out how maintenance issues will be handled, including which tasks are the tenant’s responsibility and which are the landlord’s, and how tenants should contact you if a maintenance problem arises.
Special Clauses and Addendums
In addition to the basic lease elements above, you may need to add special clauses when you write a rental lease. Some of these are required by state, local or federal law; others are optional at the discretion of you or your tenant.
Special clauses include:
- The rent liability clause states that each tenant is responsible for the full amount of the rent. In other words, if you rent to four roommates and three of them don’t pay their share of the rent, the fourth roommate is legally responsible for paying all of it. (See “Master Tenant” in this sample rental lease for an example.)
- The severability clause means that if part of the lease is ruled invalid in court, the rest of the lease is still binding. (See “Severability” in this sample rental lease for an example.)
- The access to premises clause alerts tenants that you’re allowed to enter the premises as long as you do so during reasonable hours and give the tenants sufficient notice that you plan to enter. (See “Entry by Landlord” in this sample rental lease for an example.)
- The use of premises clause explains that tenants can use the property only as a residence (not as a place of business), that only the tenants named on the lease can live there and that the tenants agree to maintain the property in a safe condition. (See “Use of Premises” in this sample lease for an example.)
- The holding over clause alerts tenants that if they stay past the end of the lease, the terms of the lease are still binding on a month-to-month basis and they still owe rent. (See “Tenants Hold Over” in this sample rental lease for an example.)
- The sublet clause notifies tenants that they must get the landlord’s permission if they want to sublet the property. (See “Assignment or Subletting” in this sample rental lease for an example.)
- The disturbance clause specifies the hours during which the tenants need to keep noise levels down. Typically, your city sets rules for these hours, such as prohibiting excessive noise before 7 am or after 10 pm. (See “Tenants Conduct” in this sample rental lease for an example.)
- The lessee to maintain clause states that the tenant is expected to keep the property in good shape and in safe condition and to pay for any wear and tear at the end of the lease. (See “Maintenance and Upkeep” in this sample rental lease for an example.)
- The automatic renewal clause notifies tenants that at the end of the lease term, the lease automatically renews for the same period as the original lease. (See “Renewals and Changes in Lease” in this sample lease for an example.)
- The buy-out clause gives both you and the tenant the option to break the lease and specifies the conditions for doing so, such as how much notice the person breaking the lease must give the other party, whether there is a charge for breaking the lease and how much it is. (See “Termination” in this sample lease for an example.)
You can include other addendums when you write a rental lease based on what you and the tenant decide. For example, if you’re planning to renovate the property, the tenant may ask for a renovation addendum detailing the changes you’ll make and guaranteeing that the renovations will be completed before the tenant moves in.
State, federal or local laws may also require educational addendums. For example, federal law requires providing an educational pamphlet about protecting children from lead paint if it’s present on your property, and some cities make you provide educational information about how to prevent bedbugs. You can learn more about lead paint disclosures on the Department of Housing and Urban Development website and contact your city government offices to find out if bedbug education is required.
Last but not least, your state may mandate including lease disclosures to notify prospective tenants if any of the following ever affected the property:
- Bedbug infestations
- Radon contamination
- Mold contamination
- Lead paint
You must also disclose any problems that might affect a tenant’s ability to live safely in the rental property, such as whether there are any code violations, and whether the property is going through foreclosure proceedings. Providing lease disclosures when you write a rental lease allows tenants to make an informed decision about whether or not they want to rent the property.
Getting It Right
As you can see, there’s a lot to consider when you write a rental lease. Legal documents can be complicated, and since the rental lease will shape your landlord-tenant relationship for a long time, it’s important to do it correctly.
There are many state-specific laws governing landlords and tenants that you’ll need to understand in order to write a solid rental lease. The best way to find out what laws are in effect in your state is to contact your state government. You can do an online search for your state government website or visit the list of state government offices. Once you’re on the state government website, you can search “landlord-tenant law” or the specific term (such as “radon”) to find the information you’re looking for.
You can also use these resources to educate yourself:
- State Guides on Landlord-Tenant Law
- U.S. Department of Housing State Information
- List of State Law Resources
- Legal self-help websites such as LegalZoom, RocketLawyer and Nolo
If the thought of writing your own lease sounds overwhelming, there’s an easier option. Using online leases can save you time and headaches. Online leases make it easy to add the relevant clauses, addendums and disclosures to your lease to customize it for each tenant and property. Because they’re lawyer-reviewed, you can feel confident that your lease will comply with applicable state, federal and local laws.
Online lease agreements also offer all-digital workflows that save you and your tenants time and hassle. The lease can be signed online, so there’s no need to battle traffic to meet in person and review the lease. This is especially convenient for tenants who are moving from out of town or out of state. Once the lease is signed, it’s accessible online any time, so tenants can refer to the lease whenever they need to.
Play It Safe
Before you welcome a new renter to your rental property, take the time to write a rental lease that is detailed and complies with federal, state and local laws. A well-written rental lease protects both you and your tenants by confirming the terms of your relationship and providing written documentation of your agreement. Thanks to online lease agreements, it’s easier than ever to write a rental lease that checks all the boxes.
Disclaimer: The information contained in this article does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional financial or legal advice as they may deem it necessary.