What is a rental agreement?
A rental agreement is a legal contract between a property owner and a renter that outlines the rules, responsibilities and terms of renting the property
Why do you need a rental agreement?
A rental agreement can help protect both property owners and renters by having the terms of the contract in writing. Having those terms clearly documented helps ensure everyone understands their responsibilities and gives both parties something to reference if questions arise later.
When do you need one?
A rental agreement may be needed any time someone rents a property they do not own, whether it's a house, apartment, condo or room. Even in informal situations, like renting from a friend or family member.
Basic items included in a rental agreement
Most rental agreements include the following items:
Names
Property owner, renter
Contact info
Phone, email
Property info
Address, description
Rent info
Amount, due date, late fees
Deposit info
Amount, criteria for returning it
Responsibilities
Utilities, property upkeep
Additional clauses and protections
Here are some additional items that may be included in a rental agreement:
Insurance info
Rental property insurance, renters insurance
Modifications
Painting walls, hanging pictures
Inspections
Notifying the renter
Pets
Types, deposits, fees
Parking
Locations, maps
Legal info
Laws, ordinances
Insurance considerations for rental properties
Whether you're a property owner or a renter, insurance may help protect your finances in the event of a covered loss.
For example, if a rental property becomes uninhabitable due to a fire in one of the units and the renters must move somewhere else temporarily until things are fixed, here's how insurance may help:
- Property owners: Rental property insurance may help pay to repair or replace your damaged rental property, like repairing a wall or replacing the carpet. It may also help cover your rental income while your rental property is uninhabitable.
- Renters: Renters insurance may help pay to repair or replace your damaged personal belongings, like removing the smell of smoke from all the clothes in your closet. It may also help cover the additional expenses you may incur while living in temporary housing.
Signing, storing and managing the agreement
Once all parties have signed the rental agreement, keeping it organized and up to date can help avoid confusion down the road.
Here are some helpful tips to consider:
- Store the agreement online: This may help make it easier for everyone to find the rental agreement quickly.
- Keep amendments together: This may help everyone keep track of the most up-to-date terms of the rental agreement.
- Save related communications: This may help clarify the terms of the rental agreement and reduce the potential for misunderstandings in the future.
Where to go for help
Whether you're a property owner wondering about the different types of rental property insurance or a renter interested in learning more about renters insurance, it may be helpful to work with a local State Farm agent who can help explain your coverage options.
This content was developed with the help of AI and reviewed by State Farm editors.
The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.
Neither State Farm nor its agents provide tax or legal advice.
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