What to Include in a Rental Agreement

Key Takeaways

• Tenant & Lease Terms: Clearly define who can live in the rental and the lease duration.
• Rent & Deposits: Outline rent amount, due date, payment methods, and security deposit terms.
• Maintenance & Entry: Specify responsibilities for repairs and when the landlord can enter.
• Rules & Termination: Include pet policies, property rules, and lease termination conditions.

Before a rental home is occupied, landlords and tenants sign a lease agreement that outlines their responsibilities during the rental period. This contract specifies the rental duration, rent amount, and other essential terms, helping to establish a clear and professional relationship between both parties.

A well-drafted lease agreement serves as a roadmap for the rental relationship and typically covers several key aspects. These terms are not only a guideline for how both parties should conduct themselves but also a legal framework for resolving disputes if they arise.

In this guide, Real PM Prestige will provide a detailed breakdown of the essential elements that should be present in any rental agreement!

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10 Important Things to Include in a Rental Agreement

1. Names of All Occupants

The rental agreement must clearly identify all individuals who will occupy the unit. If there are multiple tenants, such as a couple or roommates, each person’s name should be listed, and all parties should sign the lease. 

Legally, this provision allows landlords to collect rent from any of the named tenants, even if one moves out or fails to pay. Additionally, if one tenant violates the lease, the landlord can terminate the agreement for all tenants, holding everyone accountable for breaches, regardless of who is at fault.

2. Limits on Occupants

The lease agreement should clearly state who is allowed to occupy the rental unit, typically limiting occupancy to the named tenants and their minor children. 

This clause helps landlords control the number of residents and prevents unauthorized individuals from moving in or subletting the space without consent.

By specifying these limits, you have the legal right to evict tenants who breach the agreement by allowing extra occupants or subletting without permission. 

3. Period of Tenancy

The lease agreement should clearly specify the duration of the rental period. There are two main types of contracts: a fixed-term lease, which usually lasts for a set period like one year, and a month-to-month lease, offering more flexibility with the option for either party to terminate with proper notice.

The choice between a fixed-term lease and a month-to-month agreement depends on whether the landlord values stability or flexibility. A fixed-term lease ensures a guaranteed income for the landlord, while a month-to-month lease provides more adaptability if either the landlord or tenant needs to make changes.

4. Rent Conditions

The rental agreement must clearly outline the amount of rent due each month, the due date, and the method of payment. For clarity and to avoid misunderstandings, it’s important to specify the following details:

• Payment methods: State whether the rent can be paid by check, electronic transfer, or through other means.
• Late fees: Include provisions for late payments, such as the amount of late fees, when they will be charged, and if there is any grace period before fees are applied.
• Bounced checks: If the tenant’s payment is returned due to insufficient funds, the rental agreement should specify any additional fees that apply.

5. Deposits and Fees

Security deposits can lead to conflicts, so it’s important to address them clearly in the lease agreement. The deposit acts as a safeguard for the landlord against property damage or unpaid rent. To prevent disputes, the lease should specify:

• Deposit amount: State the amount of the security deposit, both in numbers and words. Ensure that it complies with state laws regarding maximum deposit limits.
• Use of deposit: Clarify how the deposit will be used. Common uses include covering repair costs for damages beyond normal wear and tear.
• Return of deposit: Detail the conditions for returning the deposit at the end of the tenancy, including the timeline and any potential deductions for repairs or cleaning fees.
• Interest on deposits: In some states, landlords are required to place the deposit in an interest-bearing account. Specify whether the tenant will receive any interest earned on their deposit.

6. Repairs and Maintenance

Clearly defining the responsibilities for property maintenance is crucial to avoid misunderstandings between landlords and tenants. The rental agreement should specify:

• Tenant responsibilities: Tenants must keep the unit clean and report maintenance issues promptly, and are responsible for damages caused by neglect or abuse.
• Landlord responsibilities: Landlords are responsible for repairs and maintaining the property, with the lease outlining the process for reporting and addressing repair issues.
• Restrictions on tenant repairs: The lease should specify any restrictions on tenant alterations, such as installing appliances or painting, without prior approval.

7. Rental Property Access

The rental agreement should outline the landlord’s access to the property, specifying required notice before entry, except in emergencies. This ensures tenant privacy and clarifies when and why the landlord may enter, helping prevent disputes.

8. Restrictions on Tenant Illegal Activity

The lease should include a clause banning illegal activities, such as drug use or criminal behavior, to maintain a peaceful environment. This allows the landlord to evict tenants engaged in illegal actions or causing disturbances.

9. Pets

The rental agreement should clearly outline the pet policy. If pets are not allowed, this should be stated. If pets are permitted, the lease should specify allowed types, any breed or size restrictions, additional deposits or fees, and guidelines for pet behavior, such as cleaning up after pets.

10. Other Restrictions

The lease should comply with all relevant laws, including health, safety, and Fair Housing codes, ensuring both parties understand their rights and responsibilities. 

It may also include additional restrictions, such as guidelines for home-based businesses or the use of common areas, helping clarify the rental arrangement for both the landlord and tenant.

Bottom Line

A well-crafted rental agreement is crucial for a smooth landlord-tenant relationship, clarifying responsibilities, expectations, and legal rights. It helps prevent conflicts and creates a stable rental environment. 

If you need help drafting a lease agreement or tending to other property management needs, contact Real PM Prestige today! 

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