Leases and Rental Agreements

When an individual agrees to rent or lease real estate property the tenant signs either a lease or a rental agreement with the owner of the property outlining the terms of the agreement. The difference between rentals and leases is that the terms of leases are generally for at least one year, though lease payments are usually paid by the month. Terms for rentals are generally month-to-month, although they are occasionally paid on a weekly term. Virtually all states recognize that at the end of a lease, the term converts to a month-to-month rental unless a new lease is signed and the landlord continues to accept monthly payments.

Many states have imposed limits on the size of security deposits safeguarding against damage to the property that may be collected by landlords. The highest deposit stated in a statute is three months’ rent for a furnished property, but generally the limit is one month’s rent. A number of states require landlords holding deposits to add interest when it is returned. Landlords are also required by most states to itemize any deductions taken from deposits and return them within set time periods after the lease is terminated.

Most states have statutes limiting discrimination by landlords. Under these statutes, landlords are prohibited from not renting to certain classes of people, for example, those with young children and pets. New classes are also finding their way into the law books. Since 1993 several states have added sexual orientation, familial status, and national origin to the list of prohibited bases for discrimination by landlords. State legislatures generally ensure equal access to housing to the broadest range of citizens.

Inside Leases and Rental Agreements