Property management & leasing
Lease Agreement: Definition & Example
What Is a Lease Agreement?
A lease agreement is a contract between a landlord and tenant that sets the rent, the term, and the rules each side must follow while the tenant occupies the property.
What does lease agreement mean?
A residential lease typically names the parties, identifies the property, and states the rent, due date, and late fee policy. It also sets the lease term, the security deposit, who pays which utilities, maintenance responsibilities, pet and occupancy rules, and how either side can end the tenancy.
Most leases are fixed-term, commonly 12 months. When the term ends, the lease may renew, convert to a month-to-month tenancy, or end, depending on the lease language and local law.
State and local landlord-tenant laws override lease terms that conflict with them. A clause that waives a tenant’s legal rights, such as the right to a habitable home, is generally unenforceable.
Lease agreement example
A tenant signs a 12-month lease starting June 1 at $1,450 per month, due on the first with a $50 late fee after the fifth. The lease requires a $1,450 security deposit, makes the tenant responsible for electricity, and allows one cat with $35 per month in pet rent.
Related terms
- Month-to-Month TenancyA month-to-month tenancy is a rental arrangement with no fixed end date that renews automatically each month until the landlord or tenant gives proper notice to end it.
- Lease RenewalA lease renewal is an agreement between a landlord and a current tenant to extend the tenancy for another term, often with updated rent or conditions.
- SubleaseA sublease is an arrangement where a current tenant rents all or part of their unit to another person, the subtenant, while remaining responsible to the landlord under the original lease.
- Security DepositA security deposit is money a tenant pays a landlord at the start of a lease, held to cover unpaid rent or damage beyond normal wear and tear when the tenant moves out.
- Late FeeA late fee is a charge added when rent or another payment is not received by the due date or the end of any grace period stated in the lease.
Lease agreement FAQ
- Is a lease the same as a rental agreement?
- People use the terms loosely. Often "lease" means a fixed-term contract, such as 12 months, and "rental agreement" means a month-to-month arrangement.
- Can a landlord change a lease mid-term?
- Generally not without the tenant’s agreement. Changes to a fixed-term lease usually take effect only at renewal or through a signed amendment.
