What Is a Lease Agreement?

A lease agreement is a contract that rents a home to a tenant for a fixed term, such as 6 or 12 months, at a stated rent. Once you and the tenant sign, the tenant owes rent for the full term, and you cannot raise the rent, change the terms, or end the tenancy early unless the lease allows it, the tenant agrees in writing, or the tenant breaks the lease. State landlord-tenant law sits above the lease, so a clause that conflicts with it does not hold up.

A lease differs from a month-to-month rental agreement, which has no end date and renews with each rent payment. California's official tenant guide uses "rental agreement" for both, but the practical difference is the fixed term.

What makes a lease legally binding?

A lease is binding when you and the tenant agree on the core terms (who is renting, which unit, how much rent, and for how long) and each side accepts. Signatures are how you prove that acceptance.

Whether it must be in writing depends on the length of the term and your state:

• Leases longer than one year: California, New York, Texas, and many other states require them to be in writing and signed by the party being held to them. In California, this rule is in the statute of frauds, Civil Code section 1624.
• Leases of one year or less: usually enforceable even if oral, though an oral lease is hard to prove. Pennsylvania allows oral leases of up to three years. See whether a verbal rental agreement is legally binding for the state rules.

Some disclosures must be made before the tenant is bound. For housing built before 1978, federal rules require you to give the tenant the EPA lead pamphlet, disclose known lead-based paint and hazards, and attach or insert a Lead Warning Statement in the lease before it takes effect. Before the tenant signs, also provide all available records and reports on lead-based paint and hazards, including reports for common areas and other units from building-wide evaluations. You keep the signed disclosure for 3 years. California also requires the owner to give the tenant a signed copy of the lease within 15 days.

What terms does a lease need to state?

At a minimum, a lease should name these items so neither side has to guess later:

Some states add required content. California, for example, requires the lease to name the person authorized to manage the property and to receive legal notices, the person who collects rent, and the accepted forms of payment.

For a fuller list with sample language, see the terms usually included in a rental agreement or lease.

Can you change a lease in the middle of the term?

Not on your own. A lease is a contract, so its terms bind you as well as the tenant. The California Department of Real Estate's tenant guide states the rule: during a fixed term, the landlord cannot raise the rent unless the lease expressly allows increases. The same goes for new rules or fees the tenant did not agree to.

To change a lease mid-term, use a written addendum:

1. Write the change, the date it takes effect, and a reference to the original lease (date, address, and parties).
2. Have you and every tenant who signed the lease sign and date it.
3. Give each tenant a copy and keep the original with the lease.

A tenant can refuse to sign. If they do, the original terms stay in place until the lease ends.

If your lease includes a rent increase clause, state limits still apply. In California, covered units cannot go up more than 5 percent plus inflation, or 10 percent, whichever is lower, over any 12 months, even if the lease allows a larger increase. Units with a certificate of occupancy issued within the past 15 years are exempt. Single-family homes and condos owned by individuals qualify for an exemption only if tenants receive the written exemption notice prescribed by Civil Code section 1947.12. For tenancies begun or renewed on or after July 1, 2020, that notice must be in the rental agreement.

Who is bound by the lease?

• You and any co-owner who signs. An authorized agent signing as the representative of an owner named in the lease generally binds the owner without becoming personally responsible for performing the lease. Selling the property does not cancel the lease. In California, a tenant with a lease has the right to stay through the end of the term on the same terms after a sale.
• Every tenant who signs. Each signer is a co-tenant with an equal right to the whole unit. A joint and several liability clause makes each co-tenant responsible for the full rent and any damage, rather than a per-person share. See signing a lease with more than one person.
• Not occupants who did not sign. A child or partner listed as an occupant has no rent obligation to you under the lease.
• Subtenants. If the tenant sublets, the original lease stays in force and the original tenant remains responsible to you for the rent.

How does a lease end?

At the end of the term

A fixed-term lease expires on its end date unless it says otherwise. Unless the lease or a state or local law requires notice, neither side has to give any, and the tenant either signs a renewal or moves out.

That changes where just-cause eviction laws apply. In California, once a tenant has lived in a covered unit for 12 months, the tenancy continues month to month after the lease ends, and you need a reason listed in the Tenant Protection Act to end it. In New Jersey, a landlord cannot refuse to renew a lease, written or oral, without one of the statute's good causes, unless the building is owner-occupied with no more than 2 rental units. For how these rules affect the choice between a lease and a monthly agreement, see the advantages and disadvantages of leases and rental agreements.

Holdover after the term

If the tenant stays after the lease ends and you accept rent, you have created a new tenancy. Under California Civil Code section 1945, the lease is presumed renewed on the same terms, month to month when rent is paid monthly, and never for more than one year. Every other term of the old lease carries over. If you do not want the tenant to stay, do not accept rent after the end date, and follow your state's eviction process.

Before the term ends

A lease can end early in a few ways:

• Mutual agreement. You and the tenant sign a written termination with a move-out date and how rent and the deposit will be settled.
• Tenant breach. For unpaid rent or a serious lease violation, you serve the notice your state requires and, if the tenant does not cure or leave, file an eviction case. Only a court can order the tenant out.
• Tenant leaves early. The tenant can owe rent for the rest of the term or until you re-rent the unit. In California, your claim is reduced by any rent loss the tenant proves you could reasonably have avoided, so advertise the unit promptly. The steps for re-renting and recovering rent are in our guide to a tenant breaking the lease early.
• Legal early termination rights. Under the Servicemembers Civil Relief Act, servicemembers can end a lease after entering military service, or after receiving orders for a permanent change of station or a deployment of at least 90 days. They must deliver written notice to the landlord or agent with a copy of their military orders or verification from their commanding officer of their current or future duty status. In these cases, for a lease with monthly rent, termination takes effect 30 days after the next rent due date following delivery. Rent owed before termination must be paid, prorated as needed.

Where does state law override the lease?

A clause that conflicts with state or local law is unenforceable, even if the tenant signed it. California Civil Code section 1953 makes void any lease clause that waives the tenant's security deposit rights, the limits on landlord entry, the right to notice and a hearing, or your duty of care to prevent injury or property damage.

Other rules apply whatever the lease says:

• Eviction procedure: you cannot lock a tenant out or use other self-help to remove them. You must go through the court eviction process, even if the lease claims to allow a lockout.
• Rent and termination limits: statewide rent caps and just-cause rules, such as California's Tenant Protection Act, and city rent control ordinances apply to covered units regardless of lease wording.
• Lead disclosure: the federal disclosure for pre-1978 housing is required even if the lease is silent about it.

Before you use a lease form, check it against your state's landlord-tenant statute and any city ordinance, and remove clauses your state does not allow.