A Brief Introduction of an Apartment Lease Agreement
An Apartment Lease Agreement is a legally binding contract between the landlord, i.e., the owner of the apartment and the tenant, i.e., the person who will be occupying the former’s apartment in exchange for rent.
Typically, an Apartment Lease Agreement sets out the duration and terms of the lease, besides the amount of rent and any other charges that the tenant owes to the landlord during the term of the lease. The Apartment Lease Agreements also states the rights and responsibilities of each party and is legally binding.
An Apartment Lease Agreement is a type of Residential Lease Agreement and pertains only to the leasing of apartments. The agreement comes into picture only when the owner agrees to lease his or her apartment to another person for personal occupation or any other legal purposes.
The agreement usually involves a lengthy set of terms and conditions, and it is thus important for both parties to read and understand it fully before committing to it.
Who Takes an Apartment Lease Agreement? – People Involved
An Apartment Lease Agreement Involves two parties, i.e., the landlord or the person who owns the apartment and the tenant, i.e., the person who wishes to occupy the said premises. In other words, the landlord can also be referred to as the ‘leaser’/ ‘owner’ and the tenant as the ‘lessee’/ ‘renter,’ and together, the two will constitute the parties to an Apartment Lease Agreement.
Purpose of an Apartment Lease Agreement – Why Do You Need It?
The purpose of an Apartment Lease Agreement is to set out the terms of a lease. It sets expectations for each party to a rental transaction and notes the consequences for failing to meet them.
An Apartment Lease Agreement formalizes the relationship between the landlord and tenant by setting out the terms of their liaison in the form of a written agreement. In addition to stating rules, responsibilities, and rights of the parties, and the Apartment Lease Agreements also aims at providing a legal remedy in case of a violation.
This is important as the absence of a formal residential lease agreement may deprive the parties of legal recourse. A well-defined Apartment Lease Agreement, however, backs up a lease transaction while outlining the relationship between the landlord and the tenant clearly. It is specifically designed to protect both the person leasing the apartment (“lessee”) and the owner of the asset (“lessor”) and is, therefore, one of the most important components in a lease transaction.
Contents of an Apartment Lease Agreement – Inclusions
While the contents of an Apartment Lease Agreements vary according to the type and nature of lease involved, it should, at the minimum, include details on the following:
- Name and signature of the landlord and tenant along with that of their agents (if any).
- Description of the property along with details of its exact physical location and a list of non-fixed items such as refrigerator, range/oven, dishwasher, microwave, washer, dryer, and the water-filtration system included thereon.
- Duration of the apartment lease
- Renewal process with details on the type of renewal, i.e., month to month or year to year.
- Security deposit, rent, and other monies owed by the tenant to the landlord along with details on when and how the amounts fall due and should be paid.
- Fees or Penalties for late payment bounced cheques and procedure for use and return of security deposits.
- Description of utilities such as electricity, water/sewer, gas, oil, cable, Internet and garbage pickup, and their payment
- Restrictions on subletting the apartment with a clear definition of the purpose for which it should be used, i.e., residential or otherwise
- Landlord’s right to entry and related clauses
- Rules and Regulations that the tenant must follow, such as the number of pets to be kept, notices to be given, and so on.
- Termination of the Apartment Lease Agreements and occasions when this clause can be invoked with or without notice.
The apartment owner and tenant can also add supplementary clauses to the agreement (in addition to the above), provided they are reasonable and can be agreed upon legally.
How to Draft an Apartment Lease Agreement?
While writing an Apartment Lease Agreement, it is important to keep in mind the interests of both the parties to the lease. While a lease agreement typically favors the leaser, it is advisable to draft it in a manner that is not too difficult for the lessee. This Agreement should only be drafted to cover a lawful purpose and should be written in line with applicable laws and statutes.
Since the Agreement will serve as a legal basis to your lease, it is essential to write it precisely and cover all aspects of the rental in it. A well-drafted agreement should further be concise and easy to refer to incase a dispute arises from either side to the contract. State both the rights and responsibilities of the parties with equal precision and avoid unnecessary jargon when writing the agreement.
Further, if you’re entering an apartment lease for the very first time, it is advisable to use the services of a trusted real estate lawyer. A reliable attorney can not only draft the Apartment Lease Agreement well for you but can also break down its terms and help you understand them easily.
Negotiation Strategy
An Apartment Lease Agreement is usually simple and straightforward. It often requires less or nil negotiations. Even then, it is crucial for both the landlord and tenant to read and appreciate the terms of this agreement in its entirety before signing on it. The parties can negotiate the difficult conditions of the agreement with the help of their respective lawyers or third-party mediators who specialize in rental and lease transactions. They can also rely upon market standards and measures in their negotiations while pushing back on atypical terms in the agreement.
Benefits and Drawbacks of an Apartment Lease Agreement
Signing this agreement brings with it several advantages. It provides a legal cover to both the landlord and the tenant in case either of them violates the agreement or misconstrues it on purpose. In other words, it protects the interests of both the parties to the lease and allows them fall-back upon the remedies or pre-defined clauses in the agreement for when a dispute arises.
While an Apartment Lease Agreement brings with it more benefits than otherwise, it can sometimes cause hurdles for the parties in terms of flexibility. Since the agreement is the final written word, the landlord and the tenant cannot deviate from its terms till the lease expires.
Owing to this, the lessor cannot earn more rent during the term of the lease or take advantage of market fluctuations. Similarly, if the tenant wants to opt-out of the lease prematurely, he or she may need to pay the penalty or serve a notice, which can be inconvenient in case of urgencies.
What Happens in Case of Violation?
Violation of this agreement is typically covered by a remedy mentioned in the contract itself. Non-Payment of Rent, subletting without permission, using the rented premises for an illegal purpose, causing intentional and irreparable damage to the property, could all amount to a violation of the Apartment Lease Agreement(1). Usually, failures of such a nature are covered by damages or fines payable by the violation party. However, in case the violation is too grave, it can be tackled by eviction or other punitive measures against the party in default.
Generally, this agreement also includes a clause for termination without notice or for a cause that can be evoked in case of its violation. However, before evoking a legal remedy or pressing legal charges for violation of a lease, it is advisable to consider the grounds of violation and reach an amicable settlement as far as possible.
An Apartment Lease Agreement is a type of a Residential Lease Agreement. It defines the relationship between the landlord, i.e., lessor and tenant, i.e., lessee and clearly state the rights and responsibilities of both parties to the lease. The agreement provides legal recourse to the parties and can be relied upon in case of a dispute or violation. The Agreement can be terminated by either party on serving a 30-day notice or otherwise by its terms. An Apartment Lease Agreement is one of the most crucial components in a lease transaction, and it is advisable to engage a reliable legal attorney while drafting/negotiating it.