Whether you are the lessor or the lessee, a residential lease in Tennessee locks you into the terms and conditions of an agreement. When a problem arises, you must look to the agreement to determine how to solve it. This matters because for the lessor, the profit obtained from the lease constitutes part of your livelihood, and for the lessee, the residential space you lease is your home even if temporary. That's why ensuring the residential lease is fair and, better yet, works in your favor, is important.
At Legal Freedom Law Office, our tenant-landlord attorney in Chattanooga/Hamilton County will draft, assess, and review residential leases to ensure they comply with the law and are fair. We can also handle most other matters related to landlord-tenant law. Contact us today at 423-243-3757 to schedule a Phone Consultation and to learn more.
Lease Agreements v. Rental Agreements: Does It Matter?
Lease agreements are not the same as rental agreements. So, whether you are drafting or signing one, you need to make sure which it is and that it suits your needs. Keep in mind these differences are generalizations, and specifics will vary from state to state.
Length of Tenancy
Generally speaking, rental agreements can be for a very short period of time – even for only a few days. Most often they are for six months or less or month-to-month. Lease agreements, on the other hand, are typically for a much longer period of time. It is common for a lease to be for a period of 12 months, but it can also be for many years.
Rental agreements are preferred by landlords when they may want to use the space for themselves (or for another reason) sooner rather than later, or they want the ability to increase the rent without having to wait for a longer lease period to expire. Renters like rental agreements when they will not need the space for a long period of time and/or want the flexibility to leave sooner than later.
On the other hand, lease agreements are preferred when landlords want to lock a tenant in and not have to worry about leasing a space for a while – they are guaranteed to have that income on a consistent basis. Likewise, tenants prefer lease agreements when they know they will need the space for a longer period of time and want to lock in the price so that the landlord cannot raise the rent.
Changes In Agreement
It is generally much easier for a landlord to change the terms of a rental agreement. With proper notice, landlords can change the rental agreement terms, including the amount of the rent and rental time period. The tenant must agree to and sign off on the change. It is much more difficult for a landlord to change the terms of a lease agreement – in fact, in most situations they cannot change the terms and conditions without the consent of the lessee and have those changes properly and timely executed.
In most cases, a rental agreement will automatically renew when the term agreed to in the rental agreement expires. The length of the rental will remain the same. In other words, if the rental was for six months, then it renews for another six months. When it comes to a lease, however, the ability to renew may neither be automatic nor as easy, much of it is dependent on the current lease agreement. Sometimes, you may be able to have the lease automatically renewed, or you may have to negotiate a new lease agreement.
In most rental agreements, the landlord is responsible for the general maintenance of the rental property. Lessors, however, are generally not responsible for the general maintenance of the property being leased – the lease may be particular about who maintains what. In a lease agreement, the parties can also negotiate it. In most scenarios, this means the lessor is responsible for normal wear and tear, but the lessee is responsible for any issues that arise unrelated to normal maintenance.
For example, the garage door was just replaced prior to the lessee's move-in date. The lessee used the garage door more than what is normal and the wire snapped, requiring a fix. The lessee would be responsible for the repair.
Why Does It Matter if You Choose a Rental or Lease Agreement?
Tenants and landlords are sometimes at odds with each other, and that is why it matters which agreement is used. Some of the most basic problems landlords and tenants encounter are best addressed by a lease agreement. If you chose a rental agreement, you may not have the legal tools you need to address the problem adequately.
Important Parts of a Residential Lease Agreement in Tennessee
When leasing a residential property, it is important that the lessor and lessee understand the terms of the agreement into which they are entering. Consider the top five most common problems that landlords and tenant face:
- Long-term guests
- Unauthorized pets
- Unpaid rent
- Property damages
- Commercial use of property – where the tenant treats the property more like a business than a home
These are all addressed (or should be) in the lease agreement. While important parts of any lease agreement vary from state to state, most jurisdictions recognize the following as parts of a residential lease agreement.
Names of the Lessee and Lessor
While this may seem a simple matter, it is important that the lease agreement contains the proper names of all parties involved in the lease. If more than one adult is renting the property, it will typically be expected that all adults will be on the agreement. This also means each adult is on the hook for ensuring that the terms of the agreement are met.
For example, if rent goes unpaid, all adults on the lease are responsible for it. This gives the landlord more flexibility and resources to obtain the unpaid rent. It also ensures that tenants are equally responsible to each other as well as the landlord.
Description of Rental Property
The lease agreement should have a full and complete description of the property that is being included as part of the lease. It should also state any part of the property that is not included as a part of the lease.
For example, if a barn is located on the property to be leased but is not included in the lease agreement, the agreement should explicitly state the same.
Rent Amount, Security Deposit, and Fees
The lease agreement should state the amount of the rent, when it is due, whether or not there is a grace period for late payment, and any late penalties that will be accessed. When a lessor collects a security deposit, they need to specify what the deposit is for and if/when it will be refunded. The rental agreement should also state if any fees can be accessed, what they can be accessed for, and the amount for which they may be accessed.
These parts of the tenancy agreement ensure clarity and compliance with the law. For example, most states specify how much a security deposit can be or caps the security deposit at a certain point. Having the security deposit clearly outlined in the tenancy agreement ensures compliance.
If there are any specific rules which the lessor expects the lessee to adhere to, these rules should be spelled out in the lease agreement.
Examples include but are not limited to:
- Whether or not smoking is allowed on the property
- Whether or not swimming in a pool is allowed at night
- Whether or not pets are allowed in the common areas
- Whether or not the lessee can operate a business at/from the leased property
Lessors should be clear in the rental agreement whether they allow pets in/on the rental property. If they do, they need to clarify the types of pet(s) allowed, the number of pets allowed, and whether or not any security deposit is required for the pet(s).
Number of Occupancies and Overnight Guests
State law often limits the number of occupants living in a certain space. Lessors should be clear about how many people are allowed to live in any given leasing space, which should also include children. The Federal Fair Housing Act places an occupancy limitation of two people per bedroom in a rented apartment.
Lessors should also be specific regarding whether or not overnight guests are allowed on the property, and whether or not there is a limit to how long guests may stay.
Common Residential Lease Mistakes in Tennessee
Despite having all of the above parts of a residential lease in place, mistakes still happen. Primarily, it is because:
- The landlord uses a generic lease agreement and fails to personalize the lease to account for specific details, concerns, or other issues either related to the property or the specific tenant; or
- The landlord provides lease terms that break the law; and
- The landlord (or tenant) fails to retain a lawyer to draft and review the lease agreement to ensure it benefits the respective parties, is clear, addresses proactively any potential future issues, and complies with the law.
By having an inclusive, well-thought-out residential lease agreement in place, both the lessee and lessor can be spared misunderstandings and contention down the road.
Hire a Landlord-Tenant Attorney in Chattanooga/Hamilton County Today
Residential leases in Tennessee are typically not a topic of dispute until a problem arises. Unfortunately, problems between landlords and tenants occur often. It is always in your best interest to ensure any long-term lease agreement you sign is clear, in your favor, and in compliance with the law. Contact Legal Freedom Law Office at 423-243-3757 or by filling out the online form to schedule a Phone Consultation with our landlord-tenant attorney in Chattanooga/Hamilton County today. We want to make sure you can enjoy your livelihood or your home for months or years to come.