How to Create a Lease Agreement (Step by Step)
To create a lease agreement, start from a solid template, fill in the parties, property, term, rent and deposit, add the clauses and disclosures your state requires, and have every adult tenant sign before move-in. Our free lease agreement template covers the standard clauses. This guide walks through each decision and the state rules that change them.
By LandlordTested editorial teamLast reviewed
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Start with the law, then the template
A lease can’t override the statute. If your state caps deposits at one month’s rent, a lease that says two months is unenforceable on that point, and in some states it exposes you to penalties. So the first job is to collect the numbers that apply to your property: the deposit cap and return deadline, any late-fee cap or grace period, the entry-notice rule, and any rent cap.
Then check for local rules. Chicago and Cook County, for example, have their own late-fee formula and deposit rules. Portland adds screening and deposit rules, and New York City layers rent stabilization and Good Cause on top of state law.
Once you have those, start from a complete template rather than a blank page. Replace every [STATE] and every bracketed placeholder, and delete anything that doesn’t apply rather than leaving it half filled.
The parties, the property and the term
Name the landlord exactly as the owner appears on the deed, or the LLC if the property is held in one. List every adult who will live in the unit as a tenant. Signing makes each of them jointly and severally liable, meaning you can collect the full rent from any one of them.
Describe the premises with the full address and unit, plus anything that comes with it: parking spaces, storage, appliances. If the garage isn’t included, say so.
For the term, choose a fixed term with exact start and end dates, or month-to-month. Say what happens when a fixed term ends. The usual approach is that it converts to month-to-month if the tenant stays and you accept rent.
Rent, fees and the deposit
Write the rent amount, the due date, where and how to pay, and the prorated amount for a partial first month. On a $1,650 rent with a move-in on the 16th of a 30-day month, the first month’s rent is $825.
Late fees have to be in the lease to be charged, and many states limit them. Texas presumes a fee is reasonable up to 12% of rent for buildings with four or fewer units, and it can’t be charged until rent is two full days late. New York caps it at the lesser of $50 or 5%, after five days. Maine allows 4%, and only after 15 days. Massachusetts bars any late fee until rent is 30 days late.
Deposits are capped in many states. California allows one month for deposits taken since July 1, 2024 (with a two-month exception for small landlords who own no more than two properties with four or fewer units in total). New York allows one month, Arizona one and a half, and Georgia two. Texas and Florida set no limit. Some states also require you to hold the deposit in a particular kind of account, pay interest, or tell the tenant in writing where it’s held.
Returned-payment fees and other charges should be listed with amounts. Colorado now requires a single total monthly price in advertising that includes mandatory fees, and bans many fees outright under HB25-1090, so check before adding a fee you haven’t charged before.
Day-to-day terms
These are the clauses you’ll point to most often:
- Utilities: a table of who pays what. Ambiguity here causes arguments every winter.
- Maintenance and repairs: your duty to keep the unit habitable, the tenant’s duty to report problems and avoid damage, and how to submit requests.
- Entry: the notice you’ll give. States range from 12 hours in Wisconsin to 48 hours in Delaware and Vermont, and some set none.
- Occupancy and guests: who can live there and how long a guest can stay.
- Pets: allowed or not, with any pet deposit and pet rent. Add that requests for assistance animals are handled as disability accommodations. Don’t charge pet fees for service animals, and check your state’s rules before charging them for other assistance animals, since HUD changed its federal guidance in 2025.
- Alterations and subletting: written consent for painting, lock changes and short-term rentals.
- Renters insurance: required or recommended, with a minimum liability amount if required.
Required disclosures
Lead-based paint (federal). For housing built before 1978, you must give the tenant a lead disclosure form, any reports or records you have about lead in the unit, and the EPA pamphlet “Protect Your Family From Lead in Your Home” before they sign. The lease or an attachment includes the Lead Warning Statement, signed by both of you. Keep the signed disclosure for at least three years. There are narrow exemptions, such as short-term leases of 100 days or less with no option to renew, and studio units with no separate bedroom.
State disclosures. These vary widely. Florida requires flood-risk disclosures to prospective tenants and a written notice of how the deposit is held. Georgia requires a written disclosure of flooding history if the property flooded at least three times in five years. New Jersey requires flood-risk notices and lead-safe certification for most pre-1978 rentals. California’s rent-cap exemption only works if the lease includes the required exemption notice. Check your state’s landlord-tenant statute for the full list.
Signing and after
Have every adult tenant and the landlord sign and date the lease, either on paper or with e-signatures. Initial each page if you’re signing on paper. Give each tenant a full copy, including all addenda, the same day.
Store the signed lease with the move-in checklist, the lead disclosure, the application and the screening records. Put the lease end date on your calendar 90 days ahead so the renewal letter goes out on time.
Mistakes that make leases fail
- Copying a lease from another state. A Texas lease used in Massachusetts gets the deposit, the late fee and the notice rules wrong.
- Leaving out an adult occupant. If they didn’t sign, they aren’t bound by the lease.
- Clauses that waive tenant rights. Waivers of the right to a habitable unit or of the deposit return rules are generally void. Only a few states, such as Pennsylvania and Louisiana, let a lease waive the eviction notice, and only in specific wording.
- No lead disclosure on an older home. It’s a federal requirement with real penalties.
- Handshake changes. Any change after signing needs a written addendum signed by everyone.
Step by step
- 1
Check your state and city rules
Look up your state's limits on deposits, late fees, entry notice and required disclosures before you write anything. City rules can add more, especially in places like Chicago, Portland or New York City.
- 2
Start from a full template
Use a complete residential lease rather than writing from scratch. Replace every bracketed placeholder and delete clauses that don't apply.
- 3
Fill in the parties, property and term
Name the landlord and every adult tenant, give the full address with unit, and choose a fixed term or month-to-month with exact dates.
- 4
Set rent, fees and the deposit
Write the rent, due date, payment methods, late fee and deposit, keeping each within your state's limits.
- 5
Cover the day-to-day terms
Spell out utilities, maintenance, entry notice, pets, guests, alterations, subletting and renters insurance.
- 6
Attach the required disclosures
Add the lead paint disclosure for pre-1978 housing and any state or local disclosures, such as flood history or rent-cap exemption notices.
- 7
Sign, copy and store it
Have the landlord and every adult tenant sign and date it, give each tenant a copy, and store the signed original with the move-in checklist.
Questions landlords ask
The questions we get most, each answered in a paragraph.
Can I write my own lease agreement?
Yes. There's no requirement that a lawyer draft a residential lease, and many small landlords use a template. What matters is that it reflects your state's law. A clause that conflicts with a statute, such as a deposit above the cap or a waiver of the tenant's right to repairs, is unenforceable. Have a local attorney review your template once if you can.
Does a lease need to be notarized?
In most states, a standard residential lease doesn't need a notary. It needs the signatures of the landlord and the tenants. Some states have extra formalities for long leases, often those over a year or several years, so check if you're writing a multi-year term.
Is an e-signed lease legal?
Yes. Federal law (the ESIGN Act) and state electronic-transaction laws make electronic signatures valid for leases in general. Most landlord software includes e-signing, sometimes with limits on free plans. Keep the signed PDF and the signing record the service provides.
Should I use a fixed-term lease or month-to-month?
A 12-month fixed term gives you predictable income and lowers turnover. Month-to-month gives you flexibility but lets the tenant leave with short notice. In states with just-cause rules, such as California after 12 months, or Oregon and Washington, month-to-month doesn't make it easier to end a tenancy without a reason.
What happens if my lease leaves something out?
State law fills the gap. If the lease says nothing about entry notice, for example, your state's statute or the general rule of reasonable notice applies. That's fine for some topics, but leaving out rent terms, the deposit or the late fee causes real problems, so make sure those are spelled out.