A Residential Lease Agreement: What Is It?
A residential lease agreement in Georgia is a legal document between the property owner or landlord and the tenant which outlines their relationship for the purpose of renting a residential dwelling. This legally binding contract defines all aspects of the tenancy from financial obligations to the responsibilities of both parties. Under Georgia law, including in the Georgia Code Annotated Section 44-7-1 et seq., both the landlord and tenant are bound to the stipulations of the agreement, or else face legal consequences and possible civil penalties.
Other types of real estate leases or agreements may exist, but generally these are used in a business context for commercial real estate . The laws governing a lease for a commercial property can be much different. Likewise, tenancy for an apartment, condo, or other residence may also be generally governed by Georgia law, but can also be subject to other laws such as those governing condominiums or cooperatives.
The key difference between a residential lease and other types of agreements is the intent and use of the property after the transaction. A residential lease is used for a residential property that will be occupied and lived in for a term in exchange for a payment or rent. It is not an agreement for sale or purchase of real estate.
Key Features of a Georgia Lease Agreement
There are certain elements that must be included in any residential lease agreement in Georgia. A residential lease agreement is a contract between the landlord and tenant. Like all contracts, a lease agreement must contain certain elements to be enforceable. Without these elements, it may have to be reformed (rewritten) to be enforceable.
The parties to the lease agreement must be clearly designated by name in the agreement. If a company is a party to the lease, the corporate name, not an individual’s name, should be listed as a party to the lease. The landlord is the owner of the property and the tenant is the tenant. All of their names should be set forth in the opening paragraph of the lease agreement.
The lease agreement should identify the property to be rented by the same name the owner would use to identify the property. Therefore, if the owner has named the property by address in the sale of the property or listing agreement, it should be referred to by that name in the lease agreement. It is not uncommon to see a street or other name given to the property that would be confusing.
The lease agreement should also identify the rent. The amount of rent should be clearly stated and the currency should be set forth, e.g., dollars or another currency. In the event of a default in the payment of rent, the currency should be clearly stated so there can be no dispute as to what dollars mean. We typically state "dollars, lawful money of the United States of America". Other currencies become complex when there are different exchange rates.
The lease agreement should state the time period for each lease period. The lease period starts when the first rent payment is due and ends when the second rent payment is due. The lease agreement should clearly state what the rent payment period is. A month is not a definition of a lease period and can create ambiguity. The lease period could be 30 days, the second Wednesday of the month or some other period.
The lease should state when the rent payment is due. Typically, the rent is due in advance. Specifying when the rent is due is critical in a commercial lease where the commencement date is set in advance. Under Georgia law a lease agreement for a year or longer is deemed to be a lease for one year. The parties can overcome this statute by specifying when rent is due and that the lease is for that period.
A late charge for rent must be specified. Under Georgia law, a tenant is deemed to have a period of five days to make this payment. The rent is late after five days with the late charge applying after that date. State law does not allow a tenant to waive the five day period or by contract agree that rent is late when it is ten days late.
The lease should state the time period covered by the lease agreement. Just because the contract states the term of the lease does not necessarily mean the lease is for that period of time. If the only rent payment due is the final rent payment, the date of the last payment will determine the extent of the term.
Georgia Lease Agreement State Statutes
Residential lease agreements in Georgia are governed by state law. One of the key statutes governing lease agreements in Georgia is the Georgia Landlord and Tenant Act, O.C.G.A. ยง 44-7-1. Under Georgia law, written residential lease agreements must be for a minimum of one year. In addition, there are restrictions on how much rent may be increased by a landlord, as it may not exceed 10% of the current rental amount more than twice within a twelve month period. Deductions for damages to the property are also strictly prohibited (unless the damage is the result of negligence or intentional misconduct of the tenant) and any such deductions must be explained in writing to the tenant within three business days after the tenant vacates the property.
Georgia law also establishes restrictions on how a landlord may terminate a lease agreement. For example, a residential lease agreement for longer than one year may authorize the landlord to end the lease by giving at least six months written notice to the tenant. If the lease agreement does not specify a period, then the landlord may change the terms of the lease by giving the tenant at least 60 days written notice. For month-to-month leases, depending on whether the tenant pays the rent weekly, bi-weekly, monthly, or yearly, the time needed to terminate the lease agreement varies. If a residential lease agreement runs for less than a month, then the landlord must give the tenant at least seven days notice. If a residential lease agreement runs for at least one but less than four months, then the landlord must give the tenant at least 30 days notice. A residential lease for a term of one year or longer requires 60 days notice from the landlord to the tenant. A lease that runs for at least one year may allow the tenant to terminate the lease after the first year by giving at least 30 days notice.
Typical Provisions of a Georgia Rental Lease
There are a number of common clauses that can be found in a residential lease agreement in Georgia. Many of these, such as rent amount and security deposits, are likely to be adjusted over time, but some clauses are likely to remain the same regardless of the length of the lease.
Maintenance Responsibilities
Most leases provide language regarding maintenance responsibilities, and for Georgia residential leases these clauses can be confusing. A typical clause might read:
"In the event that any plumbing or electrical issues arise, Landlord shall provide all required maintenance within a reasonable period of time. Tenant shall be responsible for lawn care, pest control, and the care of the swimming pool, provided Landlord at his or her option, does not at any time perform any of the above tasks."
In this example, the landlord is still legally responsible for the plumbing and electrical aspects of the property, even though the clause states otherwise. The Georgia Department of Community Affairs enforces Section M of the Georgia Property Maintenance Code, which regulates occupancy sources and duties of the landlords and tenants. Regardless of the wording of the assigned responsibilities, the landlord has a duty to keep the property safe and eliminate any health and safety risks.
If the landlord fails to make repairs in a timely manner, the tenant can terminate the lease agreement without penalty. The tenant may also recover any damages and may be able to suspend rent until the repairs are made. The tenant could also pursue an action in court to have the landlord replaced or even require a reduction in rent until the repairs are made. Even though these provisions have been ruled unenforceable due to being unconscionable, meaning there was an unequal bargaining power at the time of entering into the lease, they can be useful to the landlord. They can limit the liability of the landlord and help tenants understand their responsibilities at the same time.
Pets and Security Deposits
It’s very common for the lease agreement to articulate details of the pet policy for the property. If pets are allowed, the lease will usually state that tenants can only keep the permitted pet(s) on the property, and require tenants to pay a nonrefundable deposit of $300-$500. However, please note that a pet deposit is never used to cover the security deposit that is required by Georgia law. Tenants are expected to pay a separate security deposit and must be returned at the end of the lease term.
Security can be delivered in different forms, including cash, certified checks, ACH, credit cards, or other methods agreed upon by the landlord and the tenant. If you do decide to use ACH, credit cards, or wire transfers, be sure to check the lease agreement to see whether the following items will also be charged:
If you use these payment methods and the lease does not specifically list these charges, proceed with caution. A court could rule that the lease is not enforceable, and could even rule that the bank is permitted to withdraw anything it chooses to cover unpaid rent and other charges. Always ensure that the lease is clear on which charges will be added to credit cards, ACH and wire transfers.
Preparing a Georgia Lease Agreement
When it comes to drafting a residential lease agreement in Georgia, there are several key steps that can help ensure the process is smooth and compliant with state law. A lease agreement is a legally binding contract between the landlord and tenant and must be carefully worded to protect each party’s rights and interests.
The first step in the drafting process is to choose a template that includes all the necessary provisions required by Georgia law. For example, any lease agreement for a rental period of one year or longer must be signed in order to be considered valid and enforceable. If the lease is for a rental term of one month to 11 months, then it does not have to be in writing. However, it is always advisable to have any lease agreement in writing regardless of the rental term to protect both the landlord and the tenant.
Once you have chosen your template, you will need to fill in the relevant information such as the name and contact information for both the landlord and tenant, the rental property address, and the monthly rent due. Other important provisions to include in your residential lease agreement may be details about security deposits, late fees, maintenance responsibilities, and restrictions on pets or smoking in the unit .
It is also essential to make sure you comply with Georgia’s specific disclosures requirements when drafting your residential lease agreement. Georgia law requires that all residential lease agreements include a statement that any lead-based paint hazards have been disclosed to the tenant if the property was built before 1978. Additionally, if the rental property is located within a flood zone, then this disclosure requirement must also be included in the lease agreement and should mirror the requirements under federal law.
After you have completed the drafting process of your residential lease agreement, it is best practice to have a qualified legal professional review the final document before presenting it to the tenant for execution. This will allow you to be sure there are no potential issues with the clause language or the overall agreement and ensure the final document is compliant with Georgia’s lease provisions and disclosure requirements.
Consulting an attorney is particularly important if you want to make changes to any of your template’s lease provisions or if there are unique circumstances related to a specific residential rental property that should be addressed in the lease agreement.
Lease Agreement Disputes and Their Resolutions
Disputes are an inevitable part of human existence. When it comes to residential lease agreements in Georgia, disputes can arise between landlords and tenants over issues such as maintenance and repair obligations, late rent payments, evictions, security deposits, noise disturbances, and parking issues. These disputes can escalate quickly and lead to legal disputes that can take up a significant amount of time and resources.
There are several methods for resolving these disputes without resorting to lengthy and costly court proceedings. First, landlords and tenants can negotiate with each other directly, either in person or in writing. Having clear communication and a written record of all agreements made can help facilitate this process. Second, mediation is a common form of alternative dispute resolution in Georgia. Mediation involves a neutral third-party mediator who works with both parties to try and reach a mutually acceptable resolution. This process is often more cost-effective and quicker than going to court. Third, arbitration may also be an option for certain disputes. Arbitration involves a neutral third-party arbitrator who reviews the evidence presented by both parties and makes a decision that will be legally binding on both parties. Lastly, if the dispute cannot be resolved through negotiation, mediation, or arbitration, then a lawsuit may be necessary.
It is important for both landlords and tenants to be aware of their legal rights and responsibilities under the lease agreement. They should also keep careful records of all correspondence and evidence relating to the dispute. Consulting with an experienced attorney who specializes in residential lease law in Georgia can also help landlords and tenants understand their legal options and provide guidance for resolving disputes amicably.
Instances and Samples
There are many resources available online from which an individual can find a variety of sample residential lease agreements for Georgia. There are templates for apartments, single family dwellings, and other types of rental properties. In addition, there are alternate template rental agreements for month to month tenants, college students, vacation rentals, and cohabitating unmarried individuals in an apartment. As you might imagine, these templates are usually more detailed than most Georgia residential lease agreements. For example, there may be provisions addressing potential sexual harassment, pest policies, recreational vehicle parking, roommate rules, etc. The point is that for most residential rental situations, a basic, simple, "cookie-cutter" agreement will met the needs of the landlord and tenant.
Again, in most situations, the best template will be consistent with Georgia law and typical of commercial lease agreements. While not legally required, this type of agreement will insure a well organized rental facility. For example, a rental agreement based on a commercial lease agreement should have a covenants and obligations section, a rent section, a deposits section, a utilities section, a default, breach, and remedies section, and an attorney’s fees section. A landlord can use this template as a starting point for other residential lease agreement provisions. Most residential tenants will expect water utility to be provided. Thus , for residential leases where a water line is not already connected to the property, the water company may be reluctant to provide service until a residential lease is signed and executed (i.e. the customer is set up in the water company’s system as a residential customer). Depending on the water company, there may be time requirements for having the water connected. Having a template lease agreement ready to go will simplify the process of leasing the property for both the landlord and resident. Sometimes, water companies will provide a discount when a resident uses a residential lease agreement form provided by the water company. If the water company will provide a discount for using a certain residential lease agreement form, it would be wise to use that form. However, these requirements should always be checked with the specific water company being used to avoid confusion.
The point is not that there is only one ("the") best residential lease agreement template. On the contrary, the best residential lease agreement template will vary from situation to situation. The best practice is to discuss the needs of the landlord and the potential tenants. Based on those discussions, a determination can be made as to whether the best option is to use an online template or create a custom residential lease agreement.