“Knowing The 4 Types Of Residential Lease Agreement”
Did you know there is more than one type of residential lease agreement?
As the property manager, it is important to provide a written residential lease agreement with every tenant. The agreement should contain all of the important information about the tenancy and the terms and policies for renting the property.
However, the key is to select the right type of residential lease agreement. Certain clauses of an agreement may differ depending on the type of tenancy that the tenant has.
In this article, we’ll discuss the residential lease agreement and its contents. We’ll also go into depth about the different types of tenancy that may influence the type of residential lease agreement you use.
Understanding The Residential Lease Agreement
To be successful in a rental property business, it’s important to know everything that is related to your business. Knowledge of the basic aspects and how each document such as the residential lease agreement can be modified or customized is essential.
What Is Residential Lease Agreement
A residential lease agreement is an agreement that legally gives consent, or a contract for rental, of a property or rental unit from the landlord or the property manager to a tenant. It grants the tenant an exclusive possession of the real property for a specified period of time.
The residential lease agreement is a legal contract where the landlord or the property manager retains a reversionary interest in the property. They can rent or sublet the property for a period of time while still holding legal ownership of that property. The property is returned to the landlord or the property manager’s possession when the lease term ends. The residential lease agreement is a written agreement and is also known as a house lease agreement or residential rental contract.
Contents Of A Residential Lease Agreement
When running a property management company you need to be aware that not all rental lease agreements are the same. The terms and contents may differ depending on the type of the tenancy you decide are best for your rental property business.
However, all residential lease agreement contains various information about the tenant and the property. The information contained in each residential lease agreement can be the name, address, and contact information of the individuals that are involved in the tenancy as well as the identifying information of the property manager and the detailed description of the property…
Usage Of Residential Lease Agreement
The rental lease agreement when signed by all parties is a legally binding contract that can be used to inform the tenant about the terms of the rental, any background or tenant screening process, detailed policy and responsibilities of both parties to the contract.
In addition to defining the terms of the rental, the rental lease agreement is used to get a permission from the tenant to allow the property manager to conduct the necessary background checks on them. You will want to check with your local and State laws but normally a written consent from the tenant is required before conducting background and credit check. Normally the consent for background and credit checks is presented, explained and agreed to prior to the signing of the rental lease agreement.
We would highly recommend that any kind of agreement that involves a property should be written, signed, and agreed to in order to protect the property owner or manager, and the tenant. When signed and agreed to the rental lease agreement will define and hold the party responsible If either of them had violated the contents in the rental lease agreement, the agreement itself can be used by a court of law to testify that a term or policy had been violated by the actions of any party involved in the agreement.
4 Types Of Residential Lease Agreement
Not all residential lease agreement is the same.
In fact, there are 4 different types of residential leases that can be used when renting a property or developing a rental lease agreement. Each of the rental lease agreement contains different terms and policies and its length may also differ from each other.
The usual length of a residential lease agreement lasts up to 6 months to 1 year. But some renters extend their tenancy from a year or indefinite length of time if the property manager is happy allowing them to continue to rent the property.
To know and understand the differences between the 4 types of the rental lease we will detail all 4 in the sections below…
1. Term For Years
The first main difference in a rental lease agreement is the term for years. This type of residential lease agreement is terminated after a specified period of time. The tenancy will end automatically at the agreed end date even without the presence of a given notice from the landlord or property manager or the tenant.
2. Periodic Tenancy
The next different residential lease agreement is a periodic tenancy type of residential lease agreement. This type of lease agreement indicates a definite initial time but will be automatically renewable unless the agreement is terminated by either the landlord/property manager or the tenant
This type of residential lease tenancy will state that the tenant will stay in the property for a defined period of time and the payment of rent could either be weekly, monthly or yearly. The periodic tenancy agreement depends on the length and defined terms of the agreement between the property manager and the tenant.
3. Tenancy At Will
The third type of residential lease is a tenancy at will. In this type of residential lease agreement, the contract will continue to exist as long as it is agreed upon by both the landlord/property manager and the tenant. However, the tenancy can end in an instant if a notice is given by either the landlord or the tenant.
4. Tenancy At Sufferance
The fourth and final different residential lease agreement is the tenancy at sufferance. This type of tenancy is not a formal lease agreement but happens due to circumstances like eviction processes and will exist if a tenant stays occupying the property even after their lease agreement ends.
The tenancy at sufferance is unintentionally created and existed because of some circumstances. The landlord or property manager normally must follow the eviction process or meet with the tenant to discuss a buyout or way to remove them from the property. A buyout of the residential lease agreement often happens when the landlord does not want to wait for the eviction process of 6 months to 1 year to be completed and would rather pay for the tenant to move out immediately…
In a normal tenancy of sufferance the former renter is not considered a squatter but instead, they are staying on the property until all legal avenues have been explored while the landlord can evict the tenant for the continued possession of the property.
Final Thoughts About The Residential Lease Agreement
In this blog post we talked about the type of residential lease agreement. A residential lease agreement is a contract that includes almost all of the information about the tenant, property manager, and the rented property. It also contains the terms and policies for renting the property.
As we talked about, not every residential lease agreement is the same. The contents may vary depending on the type of the tenancy. Make sure to review the types of tenancy mentioned in this article before you made a residential lease agreement for your tenants.
Feel free to comment below with any questions you may have about the residential lease agreement.
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