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Commercial Real Estate - Landlord Tenant Relationship
Lease and Rental Agreements

Lease and Rental Agreements


Your lease or rental agreement should include a number of elements. Some of the most important of them are:
 
1) The names of landlord and tenant, respectively. It would be wise to also include the names of anyone else who would be occupying the property. There should also be a description of the property subject to lease.
 
2) The term of the lease, be it monthly, yearly, 5 year, etc.
 
3) The amount of rent due from tenant to landlord, as well as when it should be paid.
 
4) The details of the security deposit, that is, quantity, if it is held at interest, when it would be returned, etc.
 
5) The consequences of a default, that is, failure of either party to abide by the terms laid out in the agreement (failure to pay rent, failure to keep property working).
 
6) Whether or not there is a late fee for late payments.
 
7) If it is acceptable for the tenant to run a business out of the property (in places where zoning laws allow this).
 
8) If disturbing the “right to quiet enjoyment” of the other tenants puts the tenant in default.
 
9) The duties of the tenant and landlord with regard to the regular maintenance of the property. 
 
10) How to proceed at the end of the term of the lease (option to renew, conversion of lease, notice of termination, etc).
 
11) The conditions under which the landlord is allowed to enter the rental property.
 
12) In the event that a lawsuit is filed and the tenant loses, whether the tenant must pay all costs and fees (and the opposite, such the landlord lose).
 
13) If pets are allowed, if so, what kind and how many and whether an additional deposit would be required. 
 
14) What happens if the landlord dies or sells the building during the term of lease.
 

There are many pre-printed lease forms, but both landlord and tenant have the right to change any of these particular terms and conditions as they try to reach an agreement. State laws and locals laws further govern a lease. For example, most states require the landlord to provide an “implied warranty of habitability.” Local jurisdictions may also have laws regarding rent-control and other specifics.  

Finally, there is a difference between a lease and a rental agreement. A rental agreement is commonly monthly, and the terms of agreement can therefore be changed quite easily. A written lease, however, gives the renter the right to live in a unit for a much longer period of time (6 months, a year), provided that rent is paid and the provisions of the lease are met. Consequently, the landlord cannot change the rent or provisions of tenancy without the agreement of the tenant. Furthermore, unlike a rental agreement, a lease does not renew itself automatically when it expires. Typically, tenants who remain on the premises after the expiration of the lease become month to month tenants, subject to the terms of a rental agreement. 


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Commercial Real Estate Resource Center

  • Answers and Information
    An introduction to Commercial Real Estate with answers to frequently asked questions.
  • Contracts and Closings
    A guide to Contracts and Closings.
  • Condemnation and Eviction
    A guide to Condemnation and Eviction.
  • Construction
    An overview of Construction.
  • Landlord Tenant Relationship
    A guide to and explanation of the Landlord - Tenant Relationship.
  • Zoning
    A guide to understanding Zoning laws and issues.






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    October 11, 2008
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