What is a lease or rental agreement?
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UPDATED: Jun 15, 2018
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A lease is a contract. That means that it is a legally enforceable agreement—one that a court will enforce. It is an agreement that gives you—whether you are the landlord or the tenant—enforceable rights and imposes enforceable responsibilities on you. In a lease, the main right the tenant gets is the right to use and occupy the property, while the main right the landlord gets is the right to be paid rent for the use and occupancy of the premises. The main responsibilities or obligations of each party are the converse of the above: the tenant is responsible to pay rent, while the landlord is responsible to provide a habitable space.
However, while a lease can be as simple as, “I will rent you this apartment for $1,000 per month,” a lease generally will deal with other issues that give both the landlord and tenant other rights while imposing on them other responsibilities. For example, a tenant may be given the right to a parking spot or additional storage space, or to use common facilities (a laundry or fitness room), while being made responsible to pay utility bills or being barred from having pets.
All terms in the lease are legally enforceable. Eviction or a lawsuit could potentially be based on violating any provisions in a valid lease. Again: a lease is a contract, and like any other contract, you should not sign it (as either landlord or tenant) unless you are prepared to live up to your obligations in it.
The main responsibilities of the landlord and tenant are considered “dependent” on each other. The tenant’s obligation to pay rent is based on the landlord providing a space in habitable (safe and livable) condition, while the landlord’s obligation to provide the space based on the tenant paying rent. If the space is not habitable or usable, the tenant does not need to pay rent; while on the other hand, if the tenant fails to pay rent, the landlord may evict him or her. As with any contract, a “material” or important violation (generally called a “breach”) by one side allows the other side to treat the lease/contract as terminated (or over) due to the breach and get out of that party’s own obligations.
Oral leases: A lease can be in writing or oral (unwritten; what many people call a “verbal” lease). Fundamentally, both are enforceable, but a written lease is vastly preferable. An oral lease poses several dangers, since there is no written document setting out the terms and conditions. A written lease helps prevent sticky landlord tenant disputes—and if they occur, the written lease will be germane in deciding the merits of the case.
Also, an oral lease will–in most states–be considered a “month-to-month” lease. That is, an oral lease can be terminated by either party on a month’s notice. This means that the tenant cannot count on being able to rent the space for more than a month at a time, while the landlord cannot be assured of receiving rent beyond the next month. Sometimes, this flexibility is advantageous, but it can also be nerve-wracking and prevent long-term planning. Most people—landlords or tenants—find it better to know that the tenancy is guaranteed for a year or longer, which is another reason why a written lease is superior to an oral lease. Leases for any term beyond month-to-month must be writing in most states, so both the landlord and tenant can know when the lease expires.
Subleases: A sublease is just a lease between the main tenant (the one renting from the landlord) and a subtenant (someone renting from the main tenant). If you are renting an apartment, then take in a roommate to help pay the rent, the agreement between you and your roommate is a sublease. Or if you rent a house, then rent it out to someone else while you have to relocate for work, the agreement between you and that second person is a sublease, too.
Subleases follow the same principals as leases: whatever is in them is what the parties must do.
Another thing that’s important to bear in mind for leases, subleases, or any contracts: they only bind or obligate the persons who sign them. So if you sublease your apartment to someone else while you physically live elsewhere and your subtenant does not pay the rent, it is you the landlord will evict and/or sue. Because the sublease is between you and your subtenant, the landlord has no right to take action against the subtenant and the subtenant has no obligations to the landlord. You, however, are still obligated to the landlord under your lease for the space. So long as your subtenant pays rent on the unexpired portion of YOUR lease with the landlord, you have not defaulted on your obligation to pay the rent under the lease—it doesn’t matter to the landlord who pays him or her, or where the money comes from, as long as the landlord gets his rent.