When it comes to signing a lease agreement between landlord and tenant, what is the standard process?
The rental lease agreement is a formal contract between a tenant and a property owner, or a representative of the owner, like a property manager, outlining the terms and conditions for living at a rental property in exchange for rent.
In order for a lease agreement to be valid, both parties must sign the contract. Depending on your state’s laws, if a property manager is representing an owner, the owner may or may not be listed on the lease agreement.
Verbal Lease Agreement
Often times, a verbal lease agreement is considered legal and binding for one year. If the tenant moves in and you accept the rent then you have a binding month to month tenancy. It is always a good idea to have a written rental agreement, even if you are having a relative stay with you for just a few months. Written agreements will serve you well, if the situation goes bad and you need the tenant to move out.
Signing a Written Lease Agreement
Here’s a look at the lease signing process, including who needs to sign the lease, who signs the lease first, who gets a copy of the lease, and who to refer to with questions about the lease.
The Lease Signing Process
Lease signing can take place in person or be completed online before you move into a new unit. If you sign the lease with your landlord or property manager present, they should go over all the important terms with you. Make sure you ask questions and understand these parts of the lease.
If you sign the rental lease online, with the help of electronic signatures, it will be up to you to read through the document and understand everything to which you are you are agreeing. Do NOT treat a rental lease signing like a ‘Terms of Service’ checkbox. Lease agreements are very important legal documents.
For managers and landlords who do not use electronic signatures, they may choose to mail a lease agreement to the tenants if they cannot meet to sign the lease in-person prior to move-in. If you mail a lease agreement, some managers might require the tenant to have the signature notarized. Alternatively, a lease might get emailed or texted to a tenant, the tenant can print out the lease, sign it, and then send it back to the manager or owner.
Who signs the lease?
The lease should be signed by all adults living on the property and by the property manager or landlord. If a co-signer is part of the rental agreement, they need to sign the lease along with the tenant.
Who signs the lease first?
It is a good idea to have the tenants sign the lease agreement first. This is especially important if the lease is getting signed without the owner or manager present.
Why is it so important for a tenant to sign the lease first?
Consider this anecdote from the Washington Post: an owner couple mailed a lease to potential tenants to sign. The owners mailed the lease after signing it themselves but encountered radio silence from the potential renters. Since they had already signed the lease, they were simply waiting for a response from the renters but heard nothing. During this time, they couldn’t just rent out the property to another applicant, because the original renters could show up with the signed original lease. While the couple waited, the property was left unoccupied and collecting zero rental income. If the couple had sent an unsigned copy, they could have rented the property to another party, since a lease would not be valid without the owners signature.
Here’s an overview of a good process for sending a lease agreement to a tenant:
- Owner or manager sends an unsigned lease agreement to an approved rental applicant.
- Applicant reviews the lease agreement, signs the lease, agreeing to the terms, and mails it back to the owner/manager. By returning a signed lease agreement, they are accepting the offer to rent the property.
- The owner/manager receives the signed rental contract and also signs the contract. At this time, when both parties have signed the lease, the contract is considered binding to terms outlined in the agreement.
- Both parties get a copy of the signed lease agreement.
Who gets a copy of the lease?
Everyone who signed the lease agreement should get a copy of the contract. Tenants should keep their copies in a safe place to reference throughout tenancy as needed. Some property managers or landlord may charge the tenant to get an additional copy of the lease.
With the help of property management software, copies of a rental lease can be stored online and shared with renters to access at any time in a tenant portal.
Managers and landlords should keep excellent copies of signed lease agreements. It is a good idea to copies of lease agreements for past tenants, at least until any statute of limitations expire on the tenancy.
Depending on the management agreement and any local laws, a property manager may or may not give a copy of the lease agreement to a property owner.
If you have questions about lease terms or the lease signing process, you should have your contract reviewed by a licensed attorney familiar with landlord-tenant laws in your state. Every state has different requirements about what can and cannot be included in a legal rental lease.
What is the difference between a rental agreement and a lease?
Find Law gives the following explanation regarding the difference between a rental agreement and a lease:
There is no strict legal difference between a rental agreement and a lease agreement, however in some instances a rental agreement, or a periodic tenancy, may refer to a short-term rental contract. The term can be for any amount of time, but month-to-month tenancies are the most common. Each month the tenancy automatically renews for a new term, unless the landlord or the renter ends the tenancy by giving a 30 day written notice. Changes to the terms of the rental agreement can be made by giving the appropriate written notice.
A lease agreement, also known as a fixed term agreement, allows the tenant to rent the property for a set term. Most lease agreements are for six months or a year. The terms are unalterable during the lease unless the tenant agrees to the changes. Unlike a rental agreement, a lease does not automatically renew upon termination. Instead, a lease becomes a month-to-month tenancy if the landlord allows the tenant to remain in the rental unit and pay rent after the lease ends.
*This article has been updated with current information as of July 2020.