by Tim Taggett

Created on: January 14, 2007   Last Updated: April 13, 2007

Understanding leases

In this brief chapter we are going to discuss conventional lease contracts because it is a very important part of putting together a lease option. Most authors, teachers and mentors of lease options expect the people that are considering lease options as a possible strategy to already understand leases however only the exact opposite could be true. Understand that almost everyone in the world has rented a lease one place in their life time most people don't actually pay attention to the information contained in one and that the reason for this section.

Unless you have either read the complete lease word for word when you signed one, you have been a landlord or property manager you may want to pay close attention to some of the basic things covered in all leases throughout the United States and most likely even the world. There are many additional terms and restrictions that most experienced property owners and managers add to the traditional lease agreement however since you should never have any of those terms added to your lease agreement when dealing with lease options we're going to skip those details and just cover the basics. The reason that above statement was made is because most of the add-ins made by the owners and mangers of the properties are designed to prevent the tenants from making changes to the property that future other tenants may not like but since this intended to be the leaser's final property which they will own these terms aren't needed.

Below are the seven primary key points of a lease which we will breakdown one at a time.

1. Start date
2. End date
3. Deposit amount
4. Monthly rent
5. Rent due date
6. Late fees
7. Assignment and Subletting

Key 1: Start date real simply this is the date the contract begins which is normally the date the tenant will actual start to occupy the property.

Key 2: End date this is the date when the contract will end most of the time 3, 6, 9 or 12 months from when the lease began. Even though most state laws very from state to state, here in California a true lease must be for 12 months or greater or else it is simply referred to as a rental contract. Most of the time in this section of the lease it will also state what happens at the end of the lease such as if it will become month-to-month or if the tenant must leave on or before the actual expiration date (most commonly it becomes month-to-month).

Key 3: Deposit amount some States have stricter laws than others in regards to this. Within the state

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