As a landlord, your lease agreement is your golden ticket. A well-written lease agreement should disclose everything your tenants need to know about renting your property, from pet policies to rent payments to contract termination rules. It is the ultimate handbook. While writing this document does take time, it is a critical element of any successful landlord-tenant relationship. Follow this guide showing you how to craft your very own.

In this article:

What Is a Lease Agreement?

A lease agreement is the most important legal document that binds you and your tenants together. It describes the terms and conditions that a tenant (lessee) must abide by if they want to rent out your property for a fixed period. But this written agreement isn’t just for your occupants. As the landlord (lessor), you too are obligated to follow the contract rules. In general, a lease agreement will include these key elements.

Key Elements of a Lease Agreement:

  • Monthly Rental Costs: This specifies the amount of rent the tenant is obligated to pay each month.

  • Property Description: This details the specifics of the property being rented, including its size, location, and any included amenities.

  • Duration of the Lease: This defines the timeframe for which the tenant has the right to occupy the property, typically ranging from six months to one year.

  • Rules and Regulations: This section outlines the expectations for the tenant's behavior and use of the property, covering aspects like subletting, pets, maintenance responsibilities, and noise levels.

  • Non-Payment and Rule-Breaking Penalties: This clarifies the consequences for violating the terms of the agreement, such as late rent payments or disregarding the established rules.

Most leases last one year at a time, which your tenant can then renew once the lease period expires (if you approve the renewal). However, the exact parameters of a lease agreement can vary widely depending on the needs and expectations of you and your tenants. You can even change the specific details of this contract before you both sign it.

Why a Lease Agreement Is Essential for Landlords

You need to create a lease agreement because it lays out the responsibilities and obligations for you and your tenants. It’s like your playbook for managing renters. When in doubt, refer to the lease agreement for guidance. Here are some other reasons why you need this key document:

Helps you manage critical issues 

Landlords have a diverse range of issues they must manage, from pet-related property damages to late rent payments. Expect the unexpected because anything can happen. But that’s where the lease agreement comes in. It helps you address and manage critical issues more effectively since the rules and consequences are clearly defined.  Acting quickly on problems creates a more stable and cooperative relationship between you and your tenants.  

Ensures that you adhere to state and local laws

While landlords have a great deal of autonomy over managing their properties, they still must operate within local and state laws, which means avoiding actions like: 

  • performing self-help evictions

  • charging tenants more rent during an ongoing lease agreement

  • denying apartment hunters with service animals

A properly written lease agreement is your best friend and will help you stay out of legal trouble. 

Helps you avoid disputes 

It’s not against the law to not have a lease agreement, but it can backfire if you get into a dispute with your tenant and don’t have documentation to back you up. Renters can try to dispute anything, from late fees to unit damages to property repairs. They can take you to court, and it’s just a matter of he-said-she-said. This is the kind of situation you want to steer clear of because legal disputes can be stressful, time-consuming, and costly. There's no confusion with a lease agreement, helping you avoid conflicts altogether.

Guarantees your ability to collect and use a security deposit

Think of your security deposit as a safety net. You must collect this payment because it allows you to cover unpaid rent or costly tenant-related damages. A written lease agreement outlines the parameters of the security deposit and describes how much it costs, how the tenant can transfer the money, and when it’s due. Without the agreement to verify this mandatory payment, you risk another legal dispute with the tenant. Have this document on hand, and you should be good to go.

What Do I Need to Complete Before Writing the Lease

Before you create the lease agreement, here are a few items you need to mark off your to-do list first:

  • Review the landlord-tenant laws in your state: Rental laws can vary nationwide, regulating issues like rent, addendums, lease renewals, and eviction processes. You need to review the specific laws in your state to ensure you remain in compliance with them. 

  • Market your Rental Property: After understanding your state landlord-tenant laws, you’re ready to market your property online. You can easily add your property to Apartments.com to get the marketing ball rolling. 

  • Host an Open House: Once your rental property is on the market, you can host an open house to let interested renters view the property. Alternatively, you can use a staggered approach and have prospective tenants make an appointment for a private viewing.  Review your rental applications thoroughly: As your home gains more recognition, you can expect the rental applications to start flooding in. Review these applications thoroughly to ensure that you pick out the most viable candidates.

  • Run a Background and Credit Check: You’ve reviewed the applications and narrowed your selection to what you believe is the right candidate. Now you are ready to conduct a comprehensive background and credit check to verify that tenant has a history of reliability.

  • Contact References:  A legitimate contact, like a former landlord, can give you insight into the type of renter they are.

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Types of Lease Agreements

Lease agreements are as diverse as the tenants who sign them. Depending on your specific needs, here are the types of lease agreements you can create:

Fixed-term lease

A fixed-term lease is the most common agreement because it is effective and straightforward. Most contracts last six months to a year, and from there, you can either renew the lease or part ways with the tenant. This is usually the best option if you want consistency without feeling too bound to your renter.

Month-to-month lease

A month-to-month lease provides flexibility, whereby the lease automatically renews every month. Only when both parties decide to terminate the agreement will it end. It can be convenient for a tenant who only needs a place to stay for a short period.

How to Write a Lease Agreement in 17 Steps

Your lease agreement should serve as a resource that you can refer to at a moment's notice. While every lease agreement will have some differences, making your document as comprehensive as possible ensures that it is a reliable source of information for you and your tenants. Here are 16 steps on how to make a lease agreement: 

1. Include the contact information of both parties

Including contact information from the lessor (landlord) and lessee (renter) is vital, so you both have several ways to communicate. Include the following details from each signer (plus any cosigners, co-owners, or managing agents if applicable):

  • Physical address
  • P.O. Box (if applicable)
  • Phone number(s)
  • Email address

You should identify each party by their name and role in the lease—either as the landlord or tenant. Instead of names, you can refer to yourself and the renter as “landlord” and “tenant” throughout the document. For your records, include other occupants living in the rental property, even if they are not paying any rent (like children or extended family).

2. Include property details 

The next step is to include the important details about the rental property. The more detailed you are, the better. But in general, you want to describe the following elements: 

  • Property type: Single-family home, multi-family home, apartment, townhouse, condominium, duplex, etc.

  • Property address

  • Property damages or defects

  • Appliances, fixtures, and furniture included with the rental

  • Condo or homeowners' association (if applicable)

3. Outline property utilities and services 

When you include an outline of the utilities, specify which ones are included in the rent  (if any). If the tenant must cover some or all the utilities, you’ll want to disclose which ones and the payment due date. Here are the essential utilities you should mention: 

  • Natural gas

  • Electricity

  • Water

  • Sewer

  • HVAC (heating and cooling)

  • Trash removal

  • Snow removal (if applicable)

  • Internet and cable

4. Define the lease term 

This information clearly describes the official start date of the lease and the official date that it ends. You’ll also want to clarify term conditions, like whether the tenant can continue on a month-to-month basis. You should also specify the lease renewal policy. 

5. Disclose the monthly rent amount and due date

More than anything else, you need to explicitly state how much the rent is each month and when it is due. You can negotiate with the tenant about the due date, but once a price is locked in, you cannot change it unless you use a referendum, or the lease expires. You can reference the rent cost in the lease agreement if your tenant suddenly disputes it. Include the following information: 

  • First rent payment due date

  • Total amount of rent due every month

  • Monthly rent due date

6. Detail the penalties and late fees 

A tenant should be able to look at the lease agreement and see how much they owe if they don’t pay their rent on time. If the tenant is footing the utility bills, they should also understand the ramifications. You’ll want to include these crucial details in the lease: 

  • Late fees

  • Late rent payment penalties

  • Late utilities payment penalties

7. Describe any additional or services fees

If there are fees for special services, you’ll want to include them. This part of the lease agreement may vary depending on what the property offers. For example, some additional or service fees you might include are: 

  • Insufficient fund fees

  • Shared reserve fund

  • Pool services

  • Playgrounds, parks, and tennis courts

  • Concierge

  • Landscaping

  • Security

  • Insurance

  • Common or shared areas: entertainment room, library, etc.

8. Define the applicable payment methods 

There are many ways that landlords can accept rent payments from their tenants in the modern era. You can negotiate with the renter on which payment method works best for you both. In general, here are some of the ways you can collect rent. Just include the ones that apply to your unique situation.

  • Online payments portal or services

  • Cash

  • Mail check

  • Dropbox payments

  • ACH debit payments

  • Mobile payment apps

  • Via the property manager

  • Direct bank electronic transfer

9. Explain both parties’ responsibilities

When you and your tenant sign the lease agreement, you agree to follow the terms and conditions specified. To avoid any confusion, you want to be clear about those responsibilities. Here are some common tenant obligations: 

  • Notifying the landlord of critical repairs

  • Being respectful of other tenants

  • Complying with all rules and regulations

  • Covering renter-caused damage

  • Maintaining a clean and sanitary rental

  • Setting up priority utilities before the move-in date

  • Not using the rental for commercial purposes

Here are some typical obligations for landlords:

  • Scheduling critical repairs quickly

  • Not encroaching on the tenant’s privacy or space

  • Not entering the tenant’s unit uninvited (except during emergencies)

  • Maintaining the apartment building, grounds, and common areas

  • Replying to concerns and queries from tenants in a timely manner

  • Providing utilities and services legally required or specified in the lease

10. Determine if renters insurance is mandatory 

Renters insurance, also called tenant insurance, helps tenants cover the costs of unexpected events, like break-ins, property theft, or visitor injuries. If your tenants are required to get this insurance, you’ll need to specify that in the lease agreement.

11. Describe property rules 

All tenants must follow the property rules to uphold their tenancy. As the landlord, the rules you set are up to your discretion. There is no right or wrong—include property rules that are best for your tenants and the rental property. Here are some of the most essential rules to describe: 

  • Safety rules: These are rules related to balcony weight restrictions, fire and electricity safety, etc.

  • Association rules: These are rules related to homeowners, neighborhood, or condo associations.

  • Maintenance rules: These rules specify maintenance needs, like who is responsible for lawn mowing, snow shoveling, and trash disposal.

  • Key rules: These rules describe what to do if the tenant loses the key or who to give it to before moving out.

  • Consent rules: These rules describe what changes or modifications to the apartment require written consent from the landlord.

  • Smoking rules: These rules explain whether tenants and guests can smoke on the property.

  • Storage rules: These rules disclose if there is on-site storage, how much is available, and how much it will cost tenants to use it.

  • Guest policy: This policy describes who is considered a guest and sets a time limit for how long a guest who is not on the lease can stay in your rental property. A standard rule is a maximum of 14 days in any six-month period.

  • Parking rules: These are rules that describe whether parking is available. It also discloses the costs of any assigned parking or valet.

  • Courtesy rules: These rules refer to respectful living expectations and rights afforded to tenants, like quiet hours, privacy, cleanliness of common areas, etc.

12. Include a lead paint disclosure

One important thing to include in your lease if your property was built before 1978 is a lead paint disclosure. Why? Exposure to lead-based paint can lead to severe health problems, such as neurological damage and developmental delays in children. Your lead paint disclosure should detail any known information about the presence of lead-based paint or lead-based paint hazards in the property. Including a lead paint disclosure in your lease agreement is a clear demonstration of your commitment to your tenants' health and safety.

13. Define pet policies

Pet owners make up a large part of prospective tenants, so you’ll need to include policies that specify pet rules and costs. Include details like:

  • Whether pets are allowed

  • Pet restrictions (weight, size, breed, etc.)

  • Pet limitations (types of pets, how many pets, etc.)

  • Pet fees

  • Pet rent

  • Pet deposit

Please note that service animals (and sometimes emotional support animals) are not considered pets and do not apply to any pet-related regulations. Refer to the U.S. Department of Housing and Urban Development for more information about your obligations as a housing provider to prospective tenants with assistance animals. 

14. Include occupancy and subletting policies

From short-term family visits to extended friend stays, you’ll need to disclose who is allowed on the property and for how long. You should also describe the subletting policies, stating whether a tenant can sublease or rent the apartment to another tenant.

15. Explain the termination or eviction policies

There are many reasons why you, as a landlord, might terminate or evict a tenant from your property. You’ll need to disclose these reasons in the lease so tenants understand what actions are impermissible. For example, you may be justified to evict or terminate a lease contract before it expires when:

  • A tenant does not pay their rent

  • A tenant breaks a law while on your property

  • A tenant consistently late with  their rent

  • A tenant causes severe property damage

However, sometimes tenants want to end a lease agreement before the expiration date. For these circumstances, the lease agreement should cover: 

  • When a tenant can end their contract early

  • What fees tenants must pay for early contract terminations

  • What penalties tenants will incur

  • Any alternative termination options

16. Detail the governing laws

To legitimize the lease agreement, make sure you cover the governing laws that your document follows. Include any relevant local and state legislation that your tenant needs to know and clarify that the law supersedes the lease.

17. Create a section for signatures

Once you have all the essential details of your lease agreement written, you should include a section for you and your applicant’s signature. Make sure also to include the date. You need these signatures to make the contract legal.

Additional Questions

What is an addendum?

An addendum is a provision you include in a lease agreement that allows you to change the contract before it expires.

Can I write my lease agreement?

Yes, you can write your lease agreement. There are also pre-made templates you can use, or you can automate the creation of your lease with an online service such as Apartments.com Rental Tools. Be sure to craft a lease agreement that includes clauses relevant to you and your tenants.

Creating a comprehensive, legally sound lease agreement may seem like a daunting task. But with the right knowledge and tools at your disposal, it becomes less of a challenge and more of an opportunity to showcase your professionalism as a property owner. By detailing key elements such as rental costs, property descriptions, lease durations, rules and regulations, and penalties for non-compliance, a lease agreement sets clear expectations and fosters a sense of accountability for all tenants. Moreover, it ensures compliance with state and local laws, safeguarding you from future legal issues.

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Oleander Johnson

Oleander Johnson

Hi there! I’m Oleander, a content writer for Apartments.com. With a passion for writing and understanding, I hope to bring clarity to the confusing world of being a renter. Think of me as a close friend, someone to guide you through your rental journey and answer all your most burning questions.