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What are the most important clauses that you should include in a lease agreement?
Real estate lease agreements differ across states as clauses and elements included, but there are a few common clauses that need to be a part of such an agreement no matter where it is signed:
- Basic information such as full name of the tenant(s), information about the property being rented such as the address and a description of the property, information about the landlord or the company managing the property (name, address, contact information). The lease agreement also needs to include the basic terms of the rental: start date and the length of the rental term.
- Rental information defining all the important aspects of the tenant – landlord agreement, from rental amount, details regarding where and how the rent can be paid, when the rent should be paid, late payment fee and security deposit information.
- Limitations regarding the use of the property and other aspects such as how many people are allowed to live there, obligations of both parties (landlord and tenant), subletting conditions and alterations to the property.
These are a set of basic clauses that cover the main issues regarding landing a property. While these clauses cover the general issues of such an agreement, it is important to include particular clauses, either required by the law of the state you are in, or by the particularities of your property and the contractual relationship you want to define.
A written lease has the purpose of protecting your rental property by clearly defining the legal obligations of both parties (landlord and tenant). Even if for some people the hassle of drafting a lease agreement might seem unnecessary, such an agreement should generally be made in writing if it is for longer than one year.
The main difference between a lease agreement and a rental one is the term of the agreement. While a lease is written and signed for a set term, most often a year, and it ends when the term is reached, the rental agreement renews automatically at the end of the agreed period unless one of the parties ends it.