The Lowdown on Leases

The Lowdown on Leases

Lease or Rental Agreement

When renters sign on the dotted line, they're usually signing either a lease or a month-to-month rental agreement. What's the difference?

The Lowdown on Leases

Lease or Rental Agreement

When renters sign on the dotted line, they're usually signing either a lease or a month-to-month rental agreement. What's the difference?

Leases are longer-term and require tenants to stay for the duration of the contract—typically one year. Unless there are legally extenuating circumstances, such as nonpayment of rent or the breaking of a lease provision, landlords can't change any lease terms until the lease has expired, unless the document stipulates otherwise or the tenant gives written agreement to changes. If a lease extends for a year or longer, it's exempt from the Landlord-Tenant Act, but only if the exemption is approved by the tenant's attorney. All leases must be in writing.

Advantages: You're protected from rent raises for the duration of the lease, as well as guaranteed of keeping your rental unit for the duration, as long as you abide by the terms of the lease. Because a written lease states the responsibilities of both parties, there's less likelihood of a future dispute.

Disadvantages: If you have to leave before the term of the lease has expired, you might still be liable for the rent for the full period. In most states, landlords are required to make an earnest effort to find a new renter as soon as possible; if one is found, the tenant is only responsible for the period the unit remains unrented.

Rental agreements
Sometimes referred to as rental month-to-month agreements. Rental agreements cover an indefinite period and self-renew on a monthly basis until either the landlord or the tenant gives legally proper notice (typically 30 days). With legally proper notice, the landlord also has more flexibility to change the rental amount or other terms of the agreement, unless local rent control ordinances specify otherwise. Rental agreements can be oral, but they must be written if a refundable deposit or fee is involved.

Advantages: This type of agreement is preferable if you can't commit to the longer duration of a lease—say, if you're between homes, between school sessions, or have a temporary job transfer. If you have to move on short notice, you won't be out more than one month's rent.

Look Before You Lease

Your signature makes your rental agreement legally binding, so the best insurance against future problems is to read every word. Don't sign until you understand what you're signing.

Store-bought "boilerplate" leases may be outdated or contain conditions that have since become legislated and are no longer valid. The good news is that illegal provisions are rarely considered valid in court, but play it safe by requesting that they be crossed out. By law, you and your landlord have the right to change the terms of a lease before you sign it. Initial and date changes in ink—and don't leave without a copy in hand!

Regulations vary by state, so check with your Attorney General's office for details on your state's Landlord-Tenant laws, or look in your Government telephone pages under "Housing." In Washington state, for example, a provision is illegal if it:

• Waives any rights guaranteed by the Landlord-Tenant Act
• Allows the landlord to enter the tenant's premises without proper notice
• States that a landlord can seize the tenant's property for nonpayment of rent
• Makes the tenant responsible for the cost of all unit damages beyond "normal wear and tear" or beyond those caused by the tenant or a guest of the tenant
• Waives the right of tenants to defend themselves against a landlord's charges in court
• States that tenants will pay the landlord's legal fees under any circumstances if a dispute ends up in court
• Limits the liability of the landlord in any situation in which the landlord is normally considered responsible

What Should an Agreement Include

Aside from clear wording and adherence to federal, state, and local laws, a thorough agreement should address the following:

• How your deposit will be handled if you have to back out prior to moving in
• Duration of the lease or rental agreement
• Names of all known tenants
• Limits on occupancy: Can you sublet, and under what conditions? How long can you have a guest before he or she is considered a roommate?
• Rent: Amount, when it's due, how and where it's to be paid, payment method, and penalty for late payment if applicable
• Security deposit: Amount and how it may be used (for example, to repair damage, for cleaning, or as your last month's rent), how and when you'll receive the refundable portion, and how deductions will be assessed and communicated to you
• Repairs: The landlord's responsibilities for handling repairs or complaints, terms of your responsibility to pay for damages by you or your guests, as well as what kinds of changes you may or may not make (such as painting walls or adding an electronic security system)
• Landlord entry: How much notice you will be given, and under what circumstances the landlord can legally enter your home
• Legal restrictions, including illegal activities or making excessive noise
• Other restrictions: Can you operate a business from the rental property? Is there a parking policy, a restriction on smoking, or limits to the use of common areas?
• Pet policy, including limitations on number or size of pets, whether a pet deposit is required, and if so whether it's refundable
• Your financial obligation if you have to move before your lease has expired
• How much notice you're required to give before moving out (usually 30 days with a lease)
• Whether you pay directly for utilities, or your landlord pays and then rebills you (the former is more desirable)
• Expectations of services provided by the landlord or the tenant—such as landscaping or mowing the lawn—and how much notice you can expect, if any

As a final word, keep in mind that most misunderstandings stem from poor communication. Knowing your local laws, reading the fine print, and acting in good faith will go a long way toward creating a great landlord-tenant relationship.

Sally Anderson is a writer and editor based in Seattle.

Leases

Leases are longer-term and require tenants to stay for the duration of the contract—typically one year. Unless there are legally extenuating circumstances, such as nonpayment of rent or the breaking of a lease provision, landlords can't change any lease terms until the lease has expired, unless the document stipulates otherwise or the tenant gives written agreement to changes. If a lease extends for a year or longer, it's exempt from the Landlord-Tenant Act, but only if the exemption is approved by the tenant's attorney. All leases must be in writing.

Advantages: You're protected from rent raises for the duration of the lease, as well as guaranteed of keeping your rental unit for the duration, as long as you abide by the terms of the lease. Because a written lease states the responsibilities of both parties, there's less likelihood of a future dispute.

Disadvantages: If you have to leave before the term of the lease has expired, you might still be liable for the rent for the full period. In most states, landlords are required to make an earnest effort to find a new renter as soon as possible; if one is found, the tenant is only responsible for the period the unit remains unrented.

Rental agreements
Sometimes referred to as rental month-to-month agreements. Rental agreements cover an indefinite period and self-renew on a monthly basis until either the landlord or the tenant gives legally proper notice (typically 30 days). With legally proper notice, the landlord also has more flexibility to change the rental amount or other terms of the agreement, unless local rent control ordinances specify otherwise. Rental agreements can be oral, but they must be written if a refundable deposit or fee is involved.

Advantages: This type of agreement is preferable if you can't commit to the longer duration of a lease—say, if you're between homes, between school sessions, or have a temporary job transfer. If you have to move on short notice, you won't be out more than one month's rent.

Look Before You Lease

Your signature makes your rental agreement legally binding, so the best insurance against future problems is to read every word. Don't sign until you understand what you're signing.

Store-bought "boilerplate" leases may be outdated or contain conditions that have since become legislated and are no longer valid. The good news is that illegal provisions are rarely considered valid in court, but play it safe by requesting that they be crossed out. By law, you and your landlord have the right to change the terms of a lease before you sign it. Initial and date changes in ink—and don't leave without a copy in hand!

Regulations vary by state, so check with your Attorney General's office for details on your state's Landlord-Tenant laws, or look in your Government telephone pages under "Housing." In Washington state, for example, a provision is illegal if it:

• Waives any rights guaranteed by the Landlord-Tenant Act
• Allows the landlord to enter the tenant's premises without proper notice
• States that a landlord can seize the tenant's property for nonpayment of rent
• Makes the tenant responsible for the cost of all unit damages beyond "normal wear and tear" or beyond those caused by the tenant or a guest of the tenant
• Waives the right of tenants to defend themselves against a landlord's charges in court
• States that tenants will pay the landlord's legal fees under any circumstances if a dispute ends up in court
• Limits the liability of the landlord in any situation in which the landlord is normally considered responsible

What Should an Agreement Include

Aside from clear wording and adherence to federal, state, and local laws, a thorough agreement should address the following:

• How your deposit will be handled if you have to back out prior to moving in
• Duration of the lease or rental agreement
• Names of all known tenants
• Limits on occupancy: Can you sublet, and under what conditions? How long can you have a guest before he or she is considered a roommate?
• Rent: Amount, when it's due, how and where it's to be paid, payment method, and penalty for late payment if applicable
• Security deposit: Amount and how it may be used (for example, to repair damage, for cleaning, or as your last month's rent), how and when you'll receive the refundable portion, and how deductions will be assessed and communicated to you
• Repairs: The landlord's responsibilities for handling repairs or complaints, terms of your responsibility to pay for damages by you or your guests, as well as what kinds of changes you may or may not make (such as painting walls or adding an electronic security system)
• Landlord entry: How much notice you will be given, and under what circumstances the landlord can legally enter your home
• Legal restrictions, including illegal activities or making excessive noise
• Other restrictions: Can you operate a business from the rental property? Is there a parking policy, a restriction on smoking, or limits to the use of common areas?
• Pet policy, including limitations on number or size of pets, whether a pet deposit is required, and if so whether it's refundable
• Your financial obligation if you have to move before your lease has expired
• How much notice you're required to give before moving out (usually 30 days with a lease)
• Whether you pay directly for utilities, or your landlord pays and then rebills you (the former is more desirable)
• Expectations of services provided by the landlord or the tenant—such as landscaping or mowing the lawn—and how much notice you can expect, if any

As a final word, keep in mind that most misunderstandings stem from poor communication. Knowing your local laws, reading the fine print, and acting in good faith will go a long way toward creating a great landlord-tenant relationship.

Sally Anderson is a writer and editor based in Seattle.