Lease agreements and rental agreements can be easily confused with one another and frequently get used interchangeably. Rental agreements, commonly known as “month-to-month agreement”, is for an indefinite period of time, with rent typically payable on a monthly basis. The tenancy is automatically renewed at the end of this period unless either the landlord or tenant gives proper notice (usually 30 day advance notice) to end it. With a month-to-month rental agreement, the landlord can change the terms and rules or raise the rent with proper notice for the tenant. This arrangement provides significant flexibility to both landlord and tenant, as either is free to change the situation on a month-by-month basis. On the flip side, however, this means that neither party has very much security; the landlord might have to find a new tenant on a month’s notice if the tenant decides to move out, and the tenant may have to find a new residence if the landlord decides to raise the rent.

A lease agreement, on the other hand is signed for a set term (often six months, a year or longer). Unlike a rental agreement, the landlord cannot change the terms of tenancy or raise the rent without both parties’ agreement. A lease agreement contains mutual covenants, i.e promises that must be fulfilled by both parties, such as the landlord’s promise to deliver quiet enjoyment of the premises in return for the tenant’s promise to pay rent timely. Also, in a lease agreement the lease is not typically renewed when it expires. While this arrangment provides lfor ess flexibility, it also provides greater security to both landlord and tenant. With the assurance of a signed, written lease agreement, both parties can rest easy knowing they have continuing rights in the premises that can be protected and enforced by the law.

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Residential Lease Agreements are necessary when a landlord rents out a property, because a Court will not enforce an agreement regarding property without a writing. This Residential Lease Agreement should be used to notify a tenant of all of the terms and conditions of the rental so that all parties know their respective responsibilities. For attorneys who are asked to supervise, review, edit, or draft a lease agreement for a friend, family member, or client, there are some key components essential to every enforceable agreement. Very often questions arise as to the legality of certain provisions that seem to favor the landlord, such as an exculpatory clause limiting the landlord’s liability to third parties, and a clause restricting a tenant’s right to sublease or assign the property without the landlord’s consent.

Unfortunately for a tenant, in California, as in most other states, a general exculpatory clause in a standard residential apartment lease exempting the landlord from liability for any injury to person or loss of or damage to property from any cause is valid and enforceable. This means it is the tenant’s duty to inspect the premises and look for possible hazards, be it a broken light, unfinished tiling, or exposed electrical wiring. The tenant will most often take the premises “as is”. If repairs are needed at the outset, clearly it is the landlord’s duty to make repairs prior to the commencement of the lease. As for repairs to the property once the lease period begins, The lease should state who is responsible for repairing the property (landlord or tenant), and also when and how repairs to the property are to be made.

Often included by the landlord in a residential lease agreement is a provision prohibiting the sublease or assignment of the property during the term of the lease without the landlord’s consent. While these provisions clearly serve as a restraint on free alienability of property, they are valid and enforceable in California, however the landlord can only withhold his consent in a “reasonable” manner. See Kendall v. Ernest Pestana, Inc., (CA, 1986) As any lawyer knows, “reasonableness” is a murky legal standard, often litigated with no clear result. Thus, a savvy tenant’s attorney may wish to attempt to clarify this generic language to limit the landlord’s ability to object to a reasonable sublease or assignment, for instance, to only times where the potential subleasor has poor credit, a spotty work history, or a shortage of good references.
Finally, a savvy tenant’s attorney an option to renew the lease may be included as well. This option provision will give the tenant a right to renew the lease upon proper notice to the landlord; thirty days in most case. By law, a tenant becomes a periodic tenant after the expiration of the lease, if no further legal rights in the premises were delineated. A savvy tenant’s attorney could attempt to negotiate a tenant’s option for a flexible (3) month, (6) month, or (1) year renewal lease term. This would allow the tenant to weigh her options towards the end of the lease and make the best decision for her or her family.

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SmartRules provides step by step guides to local rules and civil procedure for state courts & federal courts throughout the country.

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