A lease agreement is needed when an owner wants their property or assets to be leased, either for commercial or personal use. It is a contract between a landlord and a tenant that allows the tenant the right to use the owner’s property in exchange for monthly or annual payment. It also states the terms and conditions that the owner or landlord has set for whoever wants to lease their property.
The purpose of a lease agreement is to provide an outline and the details of the obligations of the tenant and the landlord. It also binds both parties to the agreement that they have signed making it a legal contract.
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What Are the Elements of Lease Agreement?
- Parties that are competent
- Detailed description of the property
- The specific span of time or the length of the lease
- The terms for renewing the lease
- The payment details and method
- Details about security deposits and other related fees
- Agreement about the use of the property
- The limitations and the rights of the tenant
- A waiver of notices
- The duties and responsibilities of both the tenant and the landlord
How to Write Up a Lease Agreement
- Choose a lease agreement that you want to use.
- You may download and print agreement samples that you can use as reference.
- Use the essential elements above as your guide and on what to write and when you are going to them.
- Determine other things that you want to include in your terms and conditions.
- Be concise and clear about the things that you will be writing.
- Leave a space for you and the tenant to write your names and affix your signatures, including the date.
- Make sure to spell-check and proofread your work to avoid errors.
Another useful agreement sample is a consulting agreement sample.
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Benefits of Lease Agreement
- A lease agreement is a legal document that is enforceable by law. Once the contract agreement between the two parties has been signed, both are obliged to strictly follow the terms and conditions stipulated in it.
- It provides the payment details and payment methods that the tenant can use to pay the landlord.
- Both tenant and landlord are obliged to follow the same conditions and are both subject to appropriate consequences.
- A lease agreement states the rights of a tenant to the property, as well as who are allowed to enter the property aside from the tenant himself.
- A clear statement about the limitations of what a tenant can and can’t do while leasing the property is included in the lease agreement.
- The lease agreement also states the length of time that the tenant agreed to lease the property and the landlord agreed to have it leased.
- The lease agreement makes it clear for both the tenant and the landlord their specific duties and responsibilities about the lease, especially when it comes to the maintenance and care of the property, and payment for the lease.
- The good thing about a lease agreement is that once it has been signed by both parties, it cannot be changed or altered during the period of time stated on the agreement.
- The landlord cannot raise the price for the lease nor can they have the property leased by someone else and kick out the tenant before the lease contract ends.
- The tenant can leave the leased property at any time but they need to pay the landlord the agreed upon price for the lease until the contract ends.
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Why Use an Agreement for Lease?
There is a reason for everything. With that being said, there is absolutely a reason why agreements for a lease and printable agreement samples are being used. And we have listed some of those reasons below.
- Agreements for a lease are used so that a tenant and a landlord is bound to follow the terms and conditions in the agreement.
- The lease agreement is enforceable by the law and whoever breaches it will face consequences.
- It makes the lease a legal transaction.
- Makes clear the limitations as to what the tenant can do to the property.
What Are the Five Main Clauses of a Lease Agreement?
- Renewal clause – Determines if the lease contract is going to be renewed automatically or not, which is essential for the tenant to decide if they want this type of agreement or not.
- Late fees and allocations clause – This clause is about additional fees that a tenant needs to pay if they fail to pay the rent on time or for any property damages.
- Severability clause – It is considered to be the most important part of an agreement. This clause includes a statement that if one part of the lease is found to be faulty or illegal, the rest is still binding.
- Defaulting clause– This clause states what the tenant will do if they default.
- Subleasing – States if subleasing is allowed or not.
You might also want to check out our commercial loan agreements.
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Guidelines for Writing Lease Agreements
There are still landlords who wish to write their own lease agreement. Using samples as reference is a good idea, like a construction agreement sample or a trailer rental agreement sample. Or you can use the guidelines provided below.
- Make sure to include all necessary components that make up a lease agreement. This makes your lease agreement reliable and effective.
- Emphasizes clauses that you want your tenant to know and understand. Clauses are important for both tenant and landlord as this makes up important aspects of the use of the property, which includes fees and termination.
- Each of the items and clauses in a lease agreement should be defined or explained in different paragraphs.
- The lease agreement should be written clearly using a readable font and font size. It should also be concise.
- Simple words should be used all throughout the document. If technical terms are really needed, then you must supply a definition of terms.
- Write the names of the people who are going to be involved in the lease agreement. Like if they are family, the names of the legal members of the family should be included.
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