Updated on July 18, 2023
A lease agreement in real estate is a legally binding contract between a property owner (known as the landlord or lessor) and a tenant (known as the lessee) that outlines the terms and conditions of renting a property. It establishes the rights, obligations, and responsibilities of both parties during the lease period.
What are the important aspects of a lease agreement?
The lease agreement clearly identifies the landlord (lessor) and tenant (lessee) by their legal names and contact information and provides a detailed description of the rented property, including its address, unit number, and any specific areas or amenities included.
It specifies the duration of the lease, including the start and end dates, and mentions any provisions for a lease renewal or termination along with the rent amount, frequency of payments, preferred method of payment, and any penalties or late fees for missed or delayed payments. It also includes details on rent increases during the lease term.
The lease agreement specifies the amount of the security deposit, conditions for its use, and the process for its return at the end of the lease term and outlines the responsibilities of both parties regarding property maintenance and repairs, including reporting procedures and who is responsible for specific repairs.
The lease agreement establishes clear guidelines for the permitted use of the property, any restrictions, and specific considerations for commercial or specialized leases. It also outlines the responsibilities for utilities and expenses, including any provisions for sharing common costs.