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Real Estate Law – Lease And Rental Agreement Terminology
The landlord and tenant branch of most local courts is often overloaded with cases, usually pertaining to some part of the lease or rental agreement between the two parties. The more specific the agreement, the easier it will be for each case to be decided or, better yet, worked out between the landlord and tenant. To that end, every lease or rental agreement should contain the following terms or provisions, or some derivative thereof.
Duration of the Lease:
The duration provision will define how long the lease or rental agreement will be enforceable. Most leases are for a defined period of time, generally six months or one year. Rental agreements are usually month-to-month, and they can be terminated upon the expiration of each month, as long as the tenant gives proper notice.
Deposit on Security:
The deposit on security, also known as a security deposit, protects the landlord in the event that the tenant does something damaging to the property. Generally, if the tenant takes good care of the property, and the only damage is normal wear-and-tear, the tenant will get the security deposit back at the end of the agreement's term. Many leases contain a provision whereby the security deposit is forfeited upon default by the tenant.
Rental Amount:
Rent is the reason landlords purchase the property in the first place. The paragraph that outlines the rent should include the amount of the rent, the manner in which the rent is supposed to be paid, the date by which the rent is to be paid, any grace period, and the amount of any late fee.
Utilities:
The lease or rental agreement should enumerate who pays what utilities. Utilities can be quite costly, especially those for electricity and/or gas. Often times, the utility payments are the "make-or-break" element of the agreement. Past utility payments should be utilized by the tenant to determine whether the cost of renting the property is affordable.
Terms of Use:
Both residential and commercial leases will generally contain certain restrictions on the use and occupancy of the property. An example of a use restriction would be if the tenant cannot have pets on the property. Additionally, most residential leases contain restrictions on loud noise or music. Finally, the lease may limit specific types of property or items. For example, the agreement may state that waterbeds are not allowed.
Right of Landlord to Enter the Premises:
In certain instances, the landlord will have the right to enter the property. Often times, with notice, the landlord will have the right to inspect the property or show the property to potential tenants. This provision should state the rights and obligations of both the landlord and the tenant in this regard.
Maintenance:
Maintenance of the property can be a big issue, especially when the building is old or contains expensive appliances. The maintenance provision should answer the questions of who will be responsible for maintenance and in what situations.
Remedies upon Default:
If either the landlord or the tenant fails in their duties under the lease, there needs to be a provision that delineates what actions the damaged party can take. Such a provision should include answers to the questions of what constitutes a default and what happens in the event of a default, as well as what types of notice each party must give to the other prior to taking any action.
Generally speaking, the above provisions must be included in every lease or rental agreement. However, they aren't the only provisions that must be included in the agreement. What each agreement contains will depend on the facts and circumstances of the particular parties and the property in question, but it is important to know the basics of where to start.
Learn more about Virginia and Maryland real estate law from a Virginia real estate attorney or a Maryland real estate attorney.