Leases and Rental Agreements for Residential Rental Property

Authored By: Lagniappe Law Lab

How a Lease Works

How a Lease Works

What is a lease? - A lease is a contract by which the lessor, the landlord gives the use of a thing for a term to the lessee, the tenant. The tenant returns rent in exchange for the use of the thing i.e. rental property. Generally, a lease is valid whether it is oral or written. A written lease contract should contain:

  • Names, addresses, and signature of parties

  • The date of execution

  • A brief description of the leased property

  • The term

  • Any renewal or purchasing options

  • Reference to an option, right of first refusal, or other agreement. This reference relates to the tenant's option to transfer the leased property.

Review Your Lease Agreement

The term of a lease is the length of time you are renting the property. Typical lease agreements have a term of 3, 6, or 12 months. There are also month-to-month leases. Your lease may be different. Check what the terms say about the length of time you are renting the property for.

Generally, a lease is valid and the rights of the landlord and tenant exist whether the lease is an oral contract or written agreement

  • Notice refers to the method of communication about the property you rent. You and your landlord agree to the type of notice needed when you need to communicate about the property.

  • Check your lease agreement if you have any type of written notice related to repairs. Your lease may have a type of special process to follow to give notice to your landlord. You must follow the process and notice requirements in the lease agreement.

The terms and conditions of the lease are usually regulated by the lease agreement.

Some lease agreements allow for a landlord to charge a fee for the late payment of rent. The landlord must include the term or condition in the writing of the lease agreement. If no lease is in writing and is oral, then the landlord cannot charge late fees.

Links to the Law

Landlord Rights + Responsibilities

Landlord Rights and Responsibilities

Tenant Rights + Responsibilities

Tenant Rights and Responsibilities

  • A lessee or a tenant must pay rent according to the purpose of the lease or rental agreement.
  • A tenant must return the property in the same condition as leased, except for normal wear and tear.
  • A tenant must act as a "prudent administrator" during the lease and use the property for the purposes of the lease. 

Changing the Use or Misusing Rental Property

The landlord can get injunctive relief, dissolve the lease, or recover damages. This can happen when the tenant violates one of their duties.

Paying Rent 

A lessee must pay rent when due. When a lessee does not pay rent, the landlord has the right to sue to dissolve the lease and regain possession. The landlord can also demand specific performance of the lease. The landlord may recover accrued rent.

  • If the landlord dissolves the lease, the landlord may not collect rent that has not yet become due in the lease.
  • The landlord has the right to retake possession of the premises if a lessee abandons the lease. If this occurs, the lease is not terminated and the lessee is still not relieved of their duties i.e. pay rent.

Lessee's Right to Sublease, Assign or Encumber

A tenant can sublease the leased property or assign or encumber their rights under the lease. This is the case unless the lease has specific language which prohibits this.

Assignment vs. Sublease 

An assignment is when the lessee assigns their rights under the lease to fulfill their lease. This includes paying the rent to the lessor. After an assignment, both the original lessee and the new lessee  still promise to pay the lessor. The lessor is the 3rd party beneficiary to the assignment.

A sublease is the transfer of a lessee's right of occupancy. The sublessee does not promise to pay rent to the lessor. The sublessee must pay the original lessee. The original lessee is still bound to pay the lessor.

Whether a lessee assigns or subleases a property, they are still liable to the lessor to pay rent. This can only change by agreement with the lessor to release a lessee from liability to pay rent.

Lessee's Right to Improvements 

When the lessee makes improvements to the leased property, the lessee can:

  • Remove all improvements the property and restore the property to its original condition;

If the lessee, does not remove the improvement(s), the lessor can:

  • Appropriate ownership of improvement(s) with payment to the lessee for the enhanced value
  • Demand the lessee remove the improvement(s)
  • Remove the improvement(s) at the lessee's expense
  • Appropriate Ownership of improvement(s) without any payment

Landlord-Tenant Lease Issues

Responsibilities for Vices and Defects

  • When the tenant is not able to use a property as intended for under the lease, the lessor is liable for the vice or defect.
  • The landlord is liable for defects and vices which prevent the lessee to use the property as agreed. It does not matter whether the landlord knew about the existence of the vice or defect before the lease. It does not matter if the defect or vice happened after the lease went into effect.
    • A waiver of the warranty for vices and defects may get waived with clear and unambiguous language that is brought to the attention of the lessee.
    • A waiver of warranty is ineffective when the vices or defects seriously affect health or safety
    • The defects and vices must not be the fault of the tenant or the tenant's guest(s).

For specific details, refer to the lease agreement between the landlord and the tenant. 

Last Review and Update: Jun 29, 2022
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