How to Write a Lease Agreement

As a new landlord, a lease agreement is one of the most critical documents you’ll create. This legally binding contract sets the rules, expectations, and responsibilities for both you and your renter, providing clarity and safeguarding your rights. 

Writing a lease agreement can feel daunting, but with the right help, you can design a reliable document that protects your rental property and encourages a positive landlord-tenant relationship. 

In this blog, we explain how to write a lease agreement step-by-step, offer a sample template, and share some valuable resources to help you get started.

Understanding the Basics of a Lease Agreement

A lease agreement is a legally binding contract between a landlord and a tenant that summarizes the terms and conditions under which the renter may occupy and use the landlord’s property. In other words, it serves as a written document reflecting both parties’ agreed-upon rules, responsibilities, and expectations during the rental period.

Before drafting your lease agreement, educate yourself about the landlord-tenant laws in your state. These laws regulate security deposit limits, eviction procedures, and more. Key areas to delve into include: 

Fair Housing Laws. Ensure your agreement complies with anti-discrimination regulations.

Security Deposit Rules. Check the maximum allowable deposit, how it should be stored and deadlines for returning it.

Notice Periods. Know how much notice is required to end the lease or enter the property.

Prohibited Clauses. Certain clauses, like waiving a tenant’s right to a habitable home, are illegal in many jurisdictions.

If this is your first time creating a lease agreement, we recommend consulting your lawyer to ensure it meets all legal requirements. It’s also important to stay informed about any changes or updates to landlord-tenant laws in your state.

Essential Elements of a Lease Agreement

Before drafting your lease, gather the essential details you need to include in the agreement, including:

• Landlord and tenant names
• Property address
• Lease term (Note: always specify whether it’s a fixed-term lease, such as 12 months or month-to-month)
• Rent amount and due date
• Security deposit details

It’s important to always use clear, simple language. Legal terminology can confuse renters. Use straightforward language while making sure the lease is legally sound. For instance, instead of writing something like, “The lessor hereby agrees…,” write: “The landlord agrees…” This approach will ensure both parties understand their rights and responsibilities.

Specific Clauses to Include

Here are the must-have sections to include in your lease agreement: 

Lease Term

State the lease’s start and end dates. For monthly agreements, define the notice period required to terminate. 

Example: The lease begins on January 1, 2025, and ends on December 31, 2025. Either party may terminate the agreement with 30 days written notice. 

Rent Details

Specify:

• Rent amount and due date
• Accepted payment methods –bank transfer, check, online platforms, etc.
• Grace periods and any late fees

Example: Rent of $1,200 is due on the 1st of each month. A late fee of $75 will be charged if rent is not received by the 10th of the month. 

Security Deposit

Highlight how much money is required, what it covers, and when it will be returned.

Example: A security deposit of $1,200 is required upon signing the lease. It will be returned within 30 days of move-out, minus any deductions for damages beyond normal wear and tear.

Occupants and Guests

Restrict who can live in the rental, and the duration of guest stays.

Example: Only the tenant and listed occupants may reside in the rental unit. Guests staying longer than 20 consecutive days require written consent.

Maintenance and Repairs

Detail the steps for responsibilities for repairs and upkeep.

Example: Renters are responsible for routine maintenance, like replacing light bulbs. Landlords will deal with major repairs, such as plumbing or electrical issues, within 48 hours of notification. 

Utilities

Identify who pays for utilities, including water, electricity, and internet services.

Example: The landlord pays for water and trash removal. The tenant is responsible for electricity and internet.

Rules and Restrictions

Spell out any property-specific rules. For example, no smoking or pets, noise restrictions, or specific parking rules. 

Termination Clause

Make clear the specific conditions under which the lease can be terminated prematurely, such as property damage or non-payment of rent.

Signatures

It’s important to understand that the agreement is only binding when both parties officially sign. 

Legal Considerations and Disclosures

When drafting a lease agreement, it’s critical to include the legal essentials that protect both you and your renters. Legal considerations are important to keeping your lease sound.

Start with required disclosures, which can vary by state or locality. These disclosures may include details about lead-based paint, flood zones, or any known hazards in the rental unit. It’s worth researching to ensure you’re checking off all the legal boxes in your area.

Additionally, focus on legal clauses that set the tone for resolving possible issues. Include a governing law clause specifying which state’s laws apply and outline clear procedures for handling disputes. Remember to include eviction procedures, such as the grounds for lease termination, so everyone knows where they stand. 

Lastly, indemnification and liability clauses can help clarify who’s responsible for legal claims or property damages, providing an extra layer of protection.

Finalizing and Signing the Lease Agreement

Before finalizing, take time to review the lease carefully. If necessary, consider having a legal professional or experienced property manager review it to ensure compliance with local laws. 

After signing and the ink has dried, give your renter a copy of the lease. Always keep your copy secure, in a safe location, or digitally.

Example Resources

Here is a sample residential lease agreement template: 

This Lease Agreement is made on [date] between [Landlord’s Full Name] (“Landlord”) and [Tenant’s Full Name] (“Tenant”).

Property Address

[Full Property Address]

Lease Term

Start Date: [MM/DD/YYYY]
End Date: [MM/DD/YYYY]

Rent

Amount: $[Rent Amount] per month
Due Date: 1st of each month
Late Fee: $[Late Fee] if rent is not received by [Grace Period Date]

Security Deposit

Amount: $[Security Deposit Amount]
Return: Within XX days of move-out.

Utilities

Landlord Pays: [List utilities]
Tenant Pays: [List utilities]

Occupants

The property may only be occupied by: [List tenants and authorized occupants].

Maintenance

Tenant Responsibilities: [List responsibilities]
Landlord Responsibilities: [List responsibilities] 

Rules

[Customize rules, e.g., no smoking, pet policy, etc.]

Termination

[Outline early termination conditions]

Signatures

Landlord: _______________________ Date: __________
Tenant: ________________________ Date: __________ 

Below are just a few customizable clauses for different scenarios that you can include in your lease agreement: 

Pet policy – Tenant may keep up to two dogs on the premises with a non-refundable pet fee of $150 and an additional $50 monthly rent per pet.

Maintenance & repairs – Tenant is responsible for minor repairs under $150, like clogged drains. Landlord will handle major repairs within 5-7 days of notification.

Sub-leasing – Subleasing is prohibited without advanced written permission from the landlord. Approved subleases require a $75 processing fee.

Smoking – This is a non-smoking rental unit. Smoking is only permitted in designated outdoor areas.

Decorations/alterations – Renter may not paint walls or install permanent fixtures without the landlord’s prior written consent.

Additional Resources

To streamline the lease writing process, you may want to consider using the wealth of digital tools and resources available online, such as: 

Legal Templates – LegalTemplates.net offers customizable lease templates

DocuSign – For electronic signatures, consider this helpful tool, DocuSign

Tenant Screening – Tools like Snappt and TurboTenant can help screen renters and offer lease templates

The Bottom Line

Writing a lease agreement doesn’t have to be daunting.

By following the steps above and customizing your lease to your rental unit and local laws, you’ll develop a clear, thorough, and professional agreement. This strategy protects your investment and also sets the foundation for a successful, long-term landlord-tenant relationship.