Saturday, July 11, 2009

Essential elements of a lease

As with any valid contract, parties to a lease must be legally competent, the objective of the lease must be legal, there must be mutual agreement between the tenant and landlord to enter into the lease agreement, and something of value (i.e., consideration) must be given or promised by both parties. The promise to pay rent constitutes the tenant's consideration. Allowing the tenant to occupy the space or property constitutes the landlord's consideration.
Valid and enforceable leases also must include the following elements:
1-The name of landlord and tenant.
2-An adequate description of the leased premises.
3-An agreement to transfer possession of the property from the landlord to the tenant
4-The start and end dates of the agreements
5-A description of the rental payment
6-The agreement must be in writing
7-The agreement must be signed by all parties
The start end dates of the lease agreement and the agreed upon rental payments are both negotiated items, which we discus in detail below. The type of description required depends upon the nature of the property, but must be precise about the physical premises being leased. For residential and small commercial properties, a street address and\or apartment number is usually adequate. Descriptions for larger office and retail properties are more detailed and may include items such as floor plans, the total square footage of the leased premises, and description of parking areas.

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