How Does a Lease Work?

Why people lease

A lease is an agreement between a property owner and a person or group of people to use the property for an agreed amount of time. There are important points that must be made in a lease to ensure that everyone knows his responsibilities. Commonly people rent homes when they can't afford a down payment on their own home, don't have good enough credit for financing or they don't know if they will be in the area for a long period of time. Sometimes people just don't want the responsibilities of ownership and choose to lease instead.

Requirements to make a lease legal

First you must have the legal names of everyone involved in the lease. This includes the property owner and tenant or tenants. The tenants must be of legal age and must be able to understand the verbiage of the lease. The lease must include the address of the property being rented and the amount of the rent. The term of the lease must be stated, but there is no minimum time required. You can write a lease from one year to 20 years as long as it is spelled out. The use of the property must be spelled out, such as if it is a single family residence. Who is responsible for what must be included and much disagreement can be avoided by being very specific. An example would be: The tenant is responsible for cutting and maintaining the yard and paying for garbage removal. If these things are not considered before signing the lease, there will be problems later on. Any lease that is for a year or more must be in writing and signed by all parties. Lease forms are pretty standard in most states. and you can purchase them at an office supply store. They will be written with your state's language and you will just fill in the blanks. If there is anything special about the property or circumstances, it can be written in at the end.

Handling disputes

Maintenance and other issuest should be spelled out in the lease. However, if it is not try your best to work it out. If the landlord refuses to fix something that could potentially be dangerous, you have the right to escrow the rent until it is fixed. You can not just stop paying your rent, you must put it in an escrow account at the time it is due the landlord. Every state has a landlord tenant act and you should receive a booklet explaining your rights and responsibilities. If the landlord does not give you one, ask him for it. If you are required to give the landlord a deposit, they must put it in an escrow account and give you a letter stating where it is. Each state has different regulations on the escrow accounts, but if you feel your deposit is being mishandled ask for an accounting. If the landlord cannot account for it you can call your state's real estate commission. The best way to handle disputes is to never have them. If everything is considered before the lease is signed there should be no problem.