Understanding Types of Leases & Rental Agreements
Signing a lease is a big deal. It defines where you will live for a certain time period, either until you figure out your finances to get a house of your own or move onto greener pastures. For such a big step, it is important to define what kind of agreement you will have with your landlord. This agreement is the lease and it establishes the relationship of landlord and tenant. It defines your rent and the period of time you are to stay in the rented apartment building, house or room. It also defines a number of other things which are included in the terms of a lease. It is a legal contract, but is it enforceable by law? We take a look at some of the types of agreements and what advantages an enforceable lease provides to the tenant.
The Types of Tenant Agreements
1. Tenants at Will
This type of agreement is a verbal one. If you and your landlord have struck up a verbal deal without a contractual agreement, you are considered a tenant at will. Usually, this type of tenancy proceeds on a month-to-month basis and is fairly common in the United States. If you had an existing lease which has expired and your landlord still allows you to stay on in exchange for monthly rent checks, you are a tenant at will. You will also be considered a tenant at will if you have a written agreement with no specific date signifying the end of your tenancy term. There are many other cases where you can be a tenant at will according to the law, if:
- The landlord sends a valid quit notice but decides later that you can stay on as a tenant
- The Landlord’s building is foreclosed and you still have a valid unsubsidized lease under federal/state law.
- You spent more than 3 months living in a rooming house, consecutively.
This is a form of tenancy and the important thing to remember is that under the law you have lawful and exclusive possession of the house you have rented. It is considered trespassing if the landlord enters your rented room or apartment without your permission. Despite the popular beliefs, violating a verbal lease also has consequences.
2. Tenants with enforceable leases
An enforceable lease must be validated by the law. In order for this to happen, the tenant, landlord and an authorized officer of the law need to be signatories. This will make the lease contract binding upon both parties; i.e. the tenant and landlord. The lease agreement must be less than 10 years to be a valid and enforceable lease.
An example of a lease is that you sign a lease for one year that the apartment you rent will be charged $1000 a month. And you go through the above procedure of getting it written, signed and validated. Now, the landlord cannot raise your rent or evict you, simply because they don’t want you on their property. The only circumstances where they can do so is when the rent has not been paid on time or you violated the terms of the lease agreement.
The information contained in the lease usually includes:
- Rent amount
- Names, phone number and addresses of people responsible for property maintenance including the landlord
- Name, number and address of the person who will receive notices and court papers.
- Tenancy tenure and expiry
- Security deposit amount
Here’s something you might not have known: your landlord cannot enforce you to adhere to the illegal clauses contained in the lease. They may say that the lease is “Standard” and there is no point in going through it. You can be understandably shy or uncomfortable at this point but remember that once you sign the agreement, you are bound by law. You can take time for going through the lease with an experienced friend or a trusted lawyer to find inconsistencies in the lease.
Some examples of the illegal clauses that you may encounter are:
- Pay the whole remainder of the lease when the lease is terminated (i.e. pay the whole lease term’s rent that remains, even though the lease was terminated before completion)
- Using the security deposit to pay for utilities if you don’t pay them (this can be only used for the damages that the tenant causes)
- All repairs to be made by tenants (regardless of it being his/her fault or not)
- Pay for the utilities in the landlord’s name (you have to pay for those under tenant’s (your) name)
If one feels that an opportunity to rent will be lost they can choose to sign the lease, which will be enforceable barring the illegal clauses. Landlords cannot enforce an illegal clause on you, and if matters get worse, you can sue them for having the illegal clause in the standard form lease.
The leases can be valid for any time less than 10 years for it to be enforceable. It can be self extending, meaning that the tenant or the landlord gives prior written notice for terminating the lease. If either party does not give the notice, the lease will extend by the original amount of time (if it was a one year lease, another year would be added to it) with the same terms and conditions as before. Of course for this there needs to be a clause for the self extension of the lease on the lease itself.
A lease can even be renewed before a certain number of days until the lease expires. This should be mentioned on the lease in a separate clause as well in order to be renewed. A notice has to be given by the tenant (you) before a certain number of days that you want to continue to stay on.
If you want more information about the types of lease most suitable to you and what you need to do to make your lease enforceable, head over to Aquarius Property Management where professionals will be able to answer your most pressing questions.