What is a Lease Agreement?

A lease agreement is a legal contract used when a party conveys land or personal property (apartment unit/Home) to another party for a specific amount of time in return for payment. The lease agreement outlines all of the aspects of the lease arrangement so that each party understands his rights and obligations under the lease. Formal lease agreements are legally binding on both parties, and breach of the agreement, or failure to uphold the provisions of the agreement, has legal consequences.

If the tenant fails to abide by the terms of this lease agreement, the landlord can legally end the lease and evict the tenant. If this occurs, the tenant can be ordered to pay the remaining months on the lease, as well as an additional amount for breaching the lease. If the lease ends under normal circumstances, the tenant must notify the landlord ahead of time of the intent to move out 60 days before the lease ends. If the tenant fails to do so, the monthly payments may be automatically renewed on a month-to-month basis, as the landlord cannot simply lease the residence to a new tenant before the old tenant leaves.

A good example of lease agreement terms pertains to rental property. When John leases a house from David, he signs a lease agreement that specifies the location of the home, the monthly payment amount, the duration of the lease, and any other requirements of the parties, such as a ban on pets. The lease is legally binding, so if John moves out early, he may be held liable to pay for the entire length of the lease, even though he was no longer living there.

See an Example Lease Agreement

Terms Commonly included in a Lease Agreement:

• Duration– How long the lease agreement is in effect.
• Rent– The amount of rent that will be paid to the owner each month, and the consequences for failing to pay the agreed-upon amount by the due date.
• Deposits– The amount of any deposits required, and the purpose of each deposit, and conditions for return of any deposit at the end of the lease.
• Occupancy– The maximum number of occupants permitted in the building. When referring to a car, it may list the people allowed to drive it.
• Terms of Use– The purpose for which the property is to be used, and other issues, such as illegal acts committed on the property, or with the item leased.
• Utilities– Which utilities are included in the rent, and which utilities the tenant is responsible for.
• Insurance– Whether the lessee is required to maintain insurance on the property. This is most often used in commercial rental agreements.
• Repairs and Maintenance– Who is responsible for repairs and maintenance to the property.

Breach of a Lease Agreement

When a tenant is in breach of a lease agreement, the landlord can legally terminate the lease. The most common breach of a lease agreement occurs when a tenant fails to pay rent in a timely manner, though failure to adhere to other provisions of the lease also constitute a breach. Blackstone Management is willing to work through a variety of problems when it comes to tenants not fulfilling their leases, before evicting the tenant and going through the process of obtaining a new tenant. Even when Blackstone Management makes such allowances or attempts at working out issues, we retain the right to evict the tenant who has breached the lease.