Lease Agreement
A legally binding contract between a landlord and tenant that defines the terms and conditions of a rental arrangement for a specified period.
What is Lease Agreement?
A lease agreement (also called a rental agreement or tenancy agreement) is a legally binding contract that establishes the terms and conditions under which a landlord rents property to a tenant. A well-drafted lease specifies the parties involved, the property address, the lease term (start and end dates or month-to-month duration), the monthly rent amount and due date, security deposit amount and conditions for return, acceptable use of the property, maintenance responsibilities, pet policies, guest policies, subletting restrictions, procedures for lease renewal or termination, and consequences of breach. Leases are governed by state and local landlord-tenant law, which establishes minimum standards for habitability, security deposit limits, notice requirements, and eviction procedures—landlords cannot contract around these statutory protections. Fixed-term leases (commonly 12 months) provide stability for both parties; month-to-month agreements offer more flexibility but less security. Digital lease agreements are legally enforceable in most US jurisdictions under the federal E-SIGN Act when both parties sign electronically.
Example
A tenant signs a 12-month lease for a $1,450/month apartment starting June 1. The lease specifies: first and last month's rent plus a $1,450 security deposit due at signing ($4,350 total), rent due on the first of each month with a 5-day grace period, a $50/day late fee thereafter, no pets over 25 pounds, no subletting without written landlord consent, and 60-day written notice required from either party to terminate at the end of the lease term. State law caps the security deposit at 2 months' rent and requires its return within 21 days of move-out with an itemized deduction statement.
Source: Consumer Financial Protection Bureau — Renting a Home