- A rental property lease is a written contract between the person who rents the property to someone, the lessor, and the person who does the actual renting, the lessee. It is a legally binding contract that may be enforced in court, if such an action is needed. It is vital to know how a rental property lease works, and your rights and responsibilities when signing one.
- It matters little if you rent an apartment or a car; a rental property lease identifies the legal entities who agree to be bound by the contract. If the rental property is a home, the lessor may be referred to as the landlord, while the lessee is known as the tenant. A lease will spell out the rights and responsibilities for both sides.
- The lessor stipulates what rights he will grant to the lessee for the duration of the lease. In the case of an apartment, this may include the use of on-site laundry facilities or a courtyard, while in the case of a car rental the lessor may include the use of the GPS system at no additional charge. Limitations may include the number of additional people who may use the rental property, where it may be used and who shall have keys to it.
- Rental property lease agreements convey to the lessee the right to inspect the property prior to signing the lease. This is the time that he may point out items that require repair or replacement. If the lessee fails to point out any unsatisfactory items, she is considered to have accepted the property as is, and she cannot later on demand recourse if something turns out to be broken.
- The parties to the lease agree on a finite amount of time that the ownership of the rental property will temporarily be transferred from lessor to lessee. In the case of an apartment, the landlord may ask for a six- or 12-month lease, while in the case of a car rental, the agent may specify a multi-day transfer.
- Rental property leases detail how much money the lessor expects to receive from the lessee. For example, an apartment lease may require the prepayment of the first and the last month's rent in addition to a security deposit. The lease also specifies the monthly rent payment the lessee is expected to make, and when the payment is due.
- The lessee is responsible for purchasing rental insurance for anything that is contained within the rental property. In the case of an apartment, the lessor is not required to offer such insurance and it is up to the lessee to go out and buy it. Car rental agencies, on the other hand, frequently offer the insurance in the office, and the lessee may choose to decline the offer if she already has comparable coverage.
- Both parties agree ahead of time who may terminate the rental agreement. They also decide how the termination shall take place, when the property must be returned to the lessor and what the penalties shall be if there is a breach of contract. Since both parties agree to these terms ahead of time, there should be little problem with the enforcement of the rental property lease agreement later on.
