A lease agreement is a legally binding document that outlines the rental terms for a commercial or residential property. It is signed between a landlord (the lessor) and the renter known as the tenant (or lessee).
Creating a thorough and effective lease is very important since it protects all the parties involved. Usually, a lease is negotiable, and it is essential to ensure you are getting the best deal.
What needs to go into a lease
Leases are usually different depending on their purpose. Some essential elements include:
- Information about parties to the lease
- The subject matter of lease, which must be immovable property
- The duration of the lease for a specified or implied period
- The consideration which includes details about rent payable to the landlord
- Sub-lease defines whether the tenant can transfer the whole or part of the property to a third party
- Dispute resolution clauses provide direction in case a dispute arises
- Utility payments, maintenance, and repairs responsibilities
Additional documentation can take the form of disclosures and addenda. Disclosures are legally required to make sure renters are aware of the property’s condition. At the same time, addenda are additions to the lease meant to provide information that the original lease does not, such as a change in one of the renters.
Understand your lease agreement clearly
For whatever reason you are planning on leasing a property, it is necessary to understand the terms and conditions of the lease agreement clearly. You might be overwhelmed by the legal jargon and the fine print, but it is in your best interests that you understand what you are getting yourself into.
Like any other contract, there are consequences for breaching a signed and valid lease agreement. As such, you should consider getting legal guidance so you can make informed decisions about your lease.