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Renting A Home:
Rental Contracts

Objectives for this Lesson:

* Include in partcipant's packet.

Resources for this Lesson:
Key Points For Educator: What to Say For Learner:
Slide #1: Making Your Money Work:
Determining What is Important to You. Introduce yourself Participant Introductions
Slide #2: Objective:
  • Define the Types of Rental Contracts
  • Discuss Deposit, Rent Payment and Late Fee Requirements
  • Determine Landlord Responsibilities and Tenant Obligations
  • Explain Legal Requirements for Eviction and Termination
 Explain: By the end of this session you will be able to define the types of rental contracts, discuss deposit, rent payment and late fee requirements, determine landlord responsibilities and tenant obligations and explain the legal requirements for eviction and termination.
Slide #3: Types of Rental Agreements
Explain: When you have decided on an apartment, you most likely will be presented with a lease or written agreement. An oral agreement is another way apartments are rented.

Let's begin by defining these three agreements, beginning with a lease.

A lease is a written and dated legal document that records the contract between the owner and the renter. It is different from a written agreement in that it is much more detailed and provides both the renter and owner details that often are not outlined in a written agreement. A written agreement is somewhat shorter and more informal than a lease, but is still considered a legal document. It often permits month-to-month tenancy and allows the landlord to write in restrictions. A written agreement also might permit the landlord to change rent prices at his discretion. The tenant may add or subtract provisions to or from the agreement; however, both parties should initial all changes, and sign and date the agreement.

An oral agreement is another way apartments are rented. Such an agreement offers little protection to the renter should the landlord fail to live up to the oral commitments. Oral agreements are not recommended.

Transition Statement: The most common of these three agreements is a lease, which we will now discuss in detail.
Slide #4: Lease
Activity: To begin, let's take a look at the lease contract.

Explain: As you can see, there are several items included in this document. Some of these items are very important and should be included in every lease agreement you consider signing. Let's highlight these items.

Instructor's Note: Highlight the items listed on Slides #4, #5 and #6. Numbers on the slides indicate where they are located on the lease sample. 		Activity: Distribute the Rental Agreement/Lease Sample.
Slide #5: Lease
A lease should include:

  • Dollar amount of security or damage deposit and conditions under which the deposit will not be returned (#4)
  • Keys and furniture that will be provided (#5)
  • The amount and due date of rent, where it is to be paid and penalty for late payment (#6)
  • Person responsible for utility bills (#7)
Slide #6: Lease (Continued)
A lease should include:

  • The extent of the landlord's obligation to repair or maintain the rental unit (#25 & #26)
  • Responsibility for maintenance (#25 and #26)
  • Description of the rental unit before occupancy (usually an attachment, not included in this sample)
 Instructor's Note: The description of the rental unit before occupancy will be discussed more in the last lesson in the Section, “Moving In.”

Explain: A good lease protects the renter as well as the landlord. As you read the entire contract, make sure all of these items are outlined in the document and you understand the consequences of all the terms before you sign.

Verbal assurances, such as “well, we never enforce that part,” or “that will be fixed next month,” do not count. Only what is written counts if there is a disagreement.
Question: If there is something in the rental agreement you do not understand, where can you go for clarification?

Explain: Although many people can help you understand your lease agreement, including family, friends and even the landlord, the best person to consult, is your lawyer. You should NOT sign the agreement unless you fully understand all the terms and conditions. 		Participant discussion.
Slide #7: Lease Agreements
Explain: As you are reading the lease, there are several items to clarify with the landlord and make sure are included in the written agreement.

If you are renting a single family dwelling, taking care of landscaping may be your responsibility. If you think the landlord is responsible, make sure it is stated in your lease.

Also, check on garbage removal. Find out if service is provided to the housing site or if you must make arrangements. References in the lease to sanitary fees are for the sewer system, NOT for garbage pick up.

If the house is on a septic system, you need to make sure the lease states who is responsible for providing service, including emergency service to the septic system.
Question: What other things might need to be clarified with the landlord and included in the written agreement? Participant discussion.
Slide #8: Lease Agreements
Don't make assumptions. Get everything in writing.

  • Is the garage, workshop or storage shed included?
  • How many livable bedrooms are in the rental unit?
  • What appliances will remain in good working order?
  • What are the landlord's responsibilities for maintenance repairs?
 Explain: It is important not to assume anything about the property. For example, do not assume the garage comes with the house. Make sure the lease states you are renting the house and garage. The same is true for any outbuildings, such as workshops or storage sheds. Also, if the house has no garage, make sure the lease says you and your guests may park in the driveway at no additional cost.

Be sure the lease states the number of bedrooms in the house, especially those located in a basement or attic. If an area containing bedrooms becomes unfit for living while the rest of the house is still habitable, you will be in a better bargaining position with your landlord if you can prove that the uninhabitable space was leased to you for living and sleeping purposes.

Make sure your lease includes a list of all appliances that the landlord will provide and maintain in good working order. Do not assume a washer, dryer or any other appliance will be repaired at the landlord's expense.

Also, include a statement of landlord responsibility for the maintenance and repair of heating, air conditioning, plumbing and electrical systems, as well as repair of weather damage to roof, walls, windows and other parts of the structure.
Question: What other assumptions might you make that should be included in the lease agreement? Participant discussion.
Slide #9: Deposit Money
Usually equal to about one month's rent.
  • Can be applied to unpaid rent payments, damages repair or unpaid utilities bills.
  • Cannot be kept to cover normal wear and tear.
  • The landlord must provide an itemized written list of deductions and return the balance of the deposit within 30 days of the date the rental agreement ends or you move out.
 Transition Statement: After you have read the lease agreement and understand the obligations included in the document, you will have to sign the form and provide your deposit money before you can move into the unit.

Explain: Most landlords require a reasonable deposit to cover damages caused by a tenant. The amount of a damage deposit varies, but is generally equal to one month's rent.

The landlord can apply the deposit money to unpaid rent. Part of the deposit can be kept for nonpayment or utilities, repair work or other legitimate damages. Personal property that you leave in the rental unit also can be sold and used to cover these costs.

Deposit money cannot be kept to cover normal wear and tear. If the landlord keeps any part of the deposit, he must give you an itemized written list of deductions and return the balance of the deposit within 30 days of the date the rental agreement ends or you move out. A landlord who fails to do this may be liable for a civil penalty of $250 and for your court costs and attorney fees if you go to court for the return of your security deposit.
Slide #10: Payment of Rent
  • Payment is expected at the time and place agreed upon.
  • Rent can be increased at the end of the lease's term.
  • You cannot be charged additional fees for having guests in your rental unit. However, you may be charged if guests use facilities outside the unit.
 Transition Statement: After paying your deposit money and signing your lease, you can move into the rental unit on the date stated in the contract, and will be expected to begin paying your rent.

Explain: You are expected to pay your rent, without being asked or reminded, at the time and place agreed upon. Rent is usually paid in monthly installments at the beginning of the month. A date in one month to the same date in the following month is the legal definition of a month.

At the end of your lease term (usually one month, six months or a year), the landlord may increase the rent by providing you a written notice at least 30 days prior to the rental date specified in the lease.

Your landlord cannot charge you a fee for having a reasonable number of guests for a reasonable length of time in your rental unit. This does not preclude charges for guests' use of premises or facilities other than the rental unit. For instance, there could be a fee for your guests to use a swimming pool, exercise room or clubroom.

Transition Statement: Your landlord will expect you to pay your rent on time. If you do not pay rent on time, the landlord may charge you a late fee as written in your rental agreement.
Slide #11: Late Fees
Late fees cannot exceed 10% of the total rent payment.

Example:

1st Month 2nd Month
Monthly Rent $450.00 $900.00
Late Fee $45.00 $135.00
Total Due $495.00 $1,035.00
Explain: In New Mexico, the late fee cannot exceed 10% of the total rent payment. If you haven't paid the rent and late fee by the month due date, and you are late with the current month's rent, you will owe the original 10% penalty plus 10% of the new balance.

Example: In this example, you would be assessed $45 fee for the first late month (10% x $450). The second month, you would be charged $90 (10% x $900), plus the $45 fee from the previous month.

Explain: If you are having difficulty making rent payments, you should talk with the landlord and see what you can work out. You may be able to negotiate the late fee if you can make a partial payment, or, if you can make the complete payment just a few days after the required time.

Also, check with local non-profit agencies or churches to see if they can provide emergency help with rent or utility bills.

Transition Statement: In addition to paying your rent on time, you are also obligated to the other tenant responsibilities outlined in your contract.
Slide #12: Tenant Responsibilities
  • Disposing of all ashes, rubbish, garbage and other waste from the unit in a clean and safe manner.
  • Keeping all plumbing fixtures in the dwelling or used by the residents as clean as possible.
  • Using all electrical, plumbing, sanitary, heating, ventilation, air conditioning and other facilities and appliances in a reasonable manner.
  • Not defacing, damaging, impairing or removing any part of the unit or knowingly allowing any person to do so.
 Explain: Tenants are required to comply with housing codes that keep the rental property clean and safe. When you move out, the rental unit should be as clean as when you moved in, except for ordinary wear and tear.
Question: As a tenant, what other responsibilities do you have that we have not already discussed?

Instructor's Note: Refer to Slides #12 and #13 for discussion suggestions. The bulleted points will appear upon a second mouse click.

Instructor's Note: Highlight the tenant responsibilities on Slides #12 and #13.
Slide #13: Tenant Responsibilities
  • Behaving and requiring guests to conduct themselves in a manner that will not disturb the neighbors.
  • Abiding by all bylaws, covenants, rules or regulations of any applicable cooperative housing agreement or neighborhood association.
  • Not knowingly committing or consenting to any other person violating the rules or regulations.
Slide #14: Landlord Obligations
  • Making repairs and doing whatever necessary to keep your unit in safe condition.
  • Keeping common areas in a safe condition.
  • Maintaining the electrical, plumbing, sanitary, heating, ventilating, air conditioning and other facilities and appliances, including elevators, in good and safe working order and condition.
 Transition Statement: Not only do you as a tenant have responsibilities. Your landlord also has obligations to you as a renter. In general, your landlord is responsible for complying with housing codes that affect health and safety.
Question: What obligations does the landlord have?

Instructor's Note: Refer to Slides #14 and #15 for discussion suggestions. The bulleted points will appear upon a second mouse click. 		Participant discussion.
Slide #15: Landlord Obligations
  • Providing and maintaining appropriate containers for the removal of ashes, garbage, rubbish and other waste and arranging for removal.
  • Supplying running water at all times, a reasonable amount of hot water and reasonable heat (except when the heat or hot water is generated by an installation within the exclusive control of the resident and supplied by a direct public utility connection).
Slide #16: Termination
Legally moving out of the rental property before the term ends.

  • Provide written notice to the landlord stating the acts and omissions constituting the violation and the date you will move out. You must give the landlord at least seven days to make a reasonable attempt to remedy the violation.
  • If your landlord makes a reasonable attempt to fix the problem before the date stated in the notice, the rental agreement is not terminated.
  • If the rental agreement is terminated, you are entitled to the return of the balance of your prepaid rent and security deposit.
Transition Statement: If you or your landlord do not meet the terms of your rental contract an eviction or termination can take place. Eviction occurs if the tenant does not meet the terms of the contract and termination occurs if the landlord fails to meet the terms of the contract.

Explain: You can give notice of termination if your landlord fails to perform the obligations required by the rental agreement. You must deliver a written notice to the landlord stating the acts and omissions constituting the violation and give the date upon which the agreement will end. However, the date must allow seven days after receipt of the notice for the landlord to make a reasonable attempt to remedy the violation.

If your landlord makes a reasonable attempt to fix the problem before the date stated in the notice, the rental agreement is not terminated. If the rental agreement is terminated, you are entitled to the return of the balance of your prepaid rent and security deposit.
Slide #17: Eviction
Legally being removed from the rental property.
  • Written notice including the dates and specific facts describing the violation and the date the rental agreement will end if the violation is not fixed in seven days.
 Explain: On the other hand, you can be evicted if you do not meet the terms in the rental contract. Eviction means being legally removed from the rental property. Your landlord must give you written notice of the things you did or did not do that violated the contract. This notice will include the dates and specific facts describing the violation and the date the rental agreement will end. The landlord must give you seven days to correct the violation. Eviction can be for non-payment of rent or not meeting your other responsibilities as a tenant.
Slide #18: Moving Out
  • If you plan to move when the lease expires, you must notify the landlord before the lease ends, within the time limit stated in the contract.
  • If the landlord does not plan to renew your rental contract, you must be given notice according to the number of days stated in the contract.
  • Special cases include provisions made for military personnel.
 Explain: If you plan to move when the lease expires, you must notify the landlord before the lease ends. The number of days required to give notice should be clearly stated in your contract. A one-year lease usually requires a 60-day notice and a three or six-month lease may require a 30-day notice. Similarly, if the landlord does not plan to renew your rental contract, you must be given notice according to the number of days stated in the contract (usually 60 days). If you violate the contract, you may be entitled to less notice under New Mexico law.

There are other situations that affect ending a lease. One of these is the special case of military personnel or a person who plans to join the armed forces. You need to be aware of this if you are the roommate of such an individual. More information about this topic is in the Rental Contracts Content Guide on the Home of My Own Web site.
Slide #19: Summary
  • Defined the Types of Rental Contracts
  • Discussed Deposit, Rent Payment and Late Fee Requirements
  • Determined Landlord Responsibilities and Tenant Obligations
  • Explained Legal Requirements for Eviction and Termination
 Lesson Summary:

Congratulations! You have completed “Rental Contracts” in this Renting A Home series of classes.

Today we have defined the types of rental contracts, discussed deposit, rent payment and late fee requirements, determined landlord responsibilities and tenant obligations and explained legal requirements of eviction and termination.
Question: Are there any questions? Participant questions.

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