An Introduction to Lease Agreements in the Commonwealth of Pennsylvania
Lease agreements are a critical component of the landlord-tenant relationship in Pennsylvania. Defined as a contract between a landlord and tenant, a lease agreement establishes the terms and conditions of renting space – whether residential or commercial – for a specific period of time. In Pennsylvania, lease agreements must be in compliance with the Pennsylvania Landlord and Tenant Act of 1951 and may be written, oral, or implied from the actions of the parties.
Lease agreements can cover a number of different details with regards to an agreement to occupy real estate for a specified amount of time. For residential leases, it is common for lease agreements to detail the term of occupation and the amount of rent that will be paid. In some cases, it may also detail how rent will be paid, whether a security deposit is required, and other pertinent details such as who is responsible for utilities and maintenance of the property . Commercial lease agreements may include additional details such as permitted us of the property, additional fees for CAM (common area maintenance) and parking, alterations to the property, and relocation specifically related to business conditions.
A landlord or tenant must understand the contents of a lease agreement before signing in order to avoid misunderstandings about their rights and responsibilities once the tenant occupies the property. Tenants can review lease agreements to ensure that the terms and conditions are acceptable and reflect what is understood by both parties. It’s important to remember that lease agreements are legally-binding contracts that carry certain obligations to tenants and landlords that will be expected. Any questions regarding the lease that tenants or landlords have should be discussed before the agreement is signed.
A Lease Agreement in Pennsylvania: The Essentials
A lease agreement is unlike some contracts in which the parties may incorporate by reference other documents or even incorporate future modifications into the contract. Otherwise, a lease in PA is a stand-alone two-party contract. While, for example, in an account agreement you may find terms that are incorporated into the account agreement from another document. A lease in PA may clearly refer to other documents. But the lease itself is necessary to understand the nature of the obligation between the landlord and the tenant. Generally, leases in PA will have key components including the lease term, the security deposit, rent to be paid, expectations to renew or terminate the lease and expectations during the lease term. The lease term is generally a year. But parties may also use shorter time periods like a month to month, two month, three month and so on arrangements. Of course, you could have a lease with no set end date. In other places in this article we expand on why you might have a lease with no end date expressed in the lease. The lease term will, of course, impact when a lease will be renewed. The lease and whether it is renewed will impact the security deposit. A security deposit in PA of one year’s rent or less might be retained by a landlord even with a lease not renewed and no damages to warrant a deduction. You should find the rent amount and when rent is due in the lease as well. If you miss a rental payment in PA terms, you may have rights under the Pa Landlord and Tenant Act. Otherwise, you are likely to face an eviction if you haven’t paid. Termination provisions take many forms. Some leases in PA are set up to allow for early termination for alleged wrongs on the part of the tenant under the lease. Some leases in PA may contain provisions for terminating leases early by the landlord if there is an emergency. For instance, a serious fire or another emergency. Leases in PA formed by website leases or premade lease documents made online may not always have this clause. Or the risk might be so significant that you would want to consult an attorney and have the attorney create an appropriate lease. The lease in PA also sets out other obligations between the parties. For instance: • Permission to enter the property • Property access restrictions • Tenant responsibility or liability for loss or damage • Obligation to keep the apartment in good condition • Repairs obligations • Access to utilities • Other restrictions • Disputes • And a host of other legal implications. A lease in PA may have other elements, but the listed above are some of the more key elements of leases in PA.
The Rights and Responsibilities of a Tenant Under a Lease Agreement
One of the most important pieces of information for a tenant to know in Pennsylvania is that their rights are protected under the Landlord Tenant Act of 1951. It is important to know that this act governs your rights as a renter while you are living in someone else’s rental property.
You have the right to habitable, safe and sanitary premises under any rental agreement. That means that your landlord, by law, has an obligation to provide you with a home that is in livable condition and safe to inhabit. If your home is not in livable condition, you have the right to demand a repair from your landlord.
An example of a habitable home is one with working heat. However, not all repairs must be made immediately. Some repairs are considered "worthiness of repair," which means that they should be made within a reasonable amount of time, but only when time and money allows for it.
You have the right to security deposit return after you vacate. In Pennsylvania, landlords are required to return the security deposit to tenants within 30 days of vacating the premises. This rule only applies to security deposits that were properly entrusted to the landlord.
You have the right to request repairs. In most cases, you must send your landlord a written notice requesting needed repairs. Should your landlord refuse to make requested repairs, it can provide you with legal grounds to vacate the property and end the tenancy without any further penalties to yourself.
You have the right to sue. If you have experienced an unaddressed emergency repair, 15 days’ notice is all that is necessary for you to file a lawsuit against your landlord for a constructive eviction.
You have the right to rent payment receipt. In Pennsylvania, personal residence landlords are not required to issue receipts for rent payments. If, however, a landlord issues a receipt, you can request a copy of this receipt.
As a tenant, you also have certain responsibilities under Pennsylvania state law.
You have the responsibility to pay rent carefully. This means that, just like your responsibility as a homeowner, as a tenant you must make rent payments on time. As a general rule, leases in Pennsylvania require monthly rent payments.
You have the responsibility to maintain the home. As a tenant, you have a responsibility to maintain your home to some degree, including light cleaning and minor upkeep to prevent excessive damage.
You have the responsibility to mitigate damages. If you are active in collecting a security deposit, you have a responsibility to stop your damages from increasing. This might include finding a new tenant or attempting to renegotiate your lease.
You don’t have an automatic right to break your lease agreement. If you experience a job transfer, safety issues, or other circumstances outside your control that require breaking your lease agreement, you do not have an automatic right to quit your lease. You can be held responsible for the remainder of the rent due to the end of the lease. However, in some cases (such as domestic violence) you may have an automatic right to break your lease.
The Obligations of a Pennsylvania Landlord Under a Lease Agreement
Landlords (Lessors) have a statutory obligation to communicate their expectations to their tenants. This obligation is fulfilled through the "lease." A lease imposes obligations on both Landlord and Tenant.
What is not generally understood is that even if Landlord does not draft a lease or fails to include certain provisions in a lease, the parties are bound by the Pennsylvania Residential Tenants Act and Landlord may be held to statutory and case law standards.
The Pennsylvania Residential Tenants Act ("Act") governs most residential "tenancies" for a term of one year or less in Pennsylvania (Title 68 P.S. §250.101 et seq. (2007)) and by County Court Rules in other Municipalities (as to Philadelphia, Landlord/Tenant Rules of Court), and permits courts to enter damage judgments against Landlords who violate the Act. It affords a wide range of protections to residential tenants in Pennsylvania. The Act is the law. Landlords who fail to comply are violating it. This is true even if no lease is entered into, oral or written, where Tenants occupy the residence knowing they owe rent.
Some of the most significant responsibilities of a Landlord to a Tenant are as follows:
The Act also outlines Tenants responsibilities and has specific provisions covering late fees, notices to quit, retaliatory actions, condemnation, as well as provisions governing mobile home tenancies and roommate situations.
Further, lease provisions must be reasonable and may not violate federal, state, or local laws. Finally, it is important to note that although courts may enter judgments for damages, equitable and injunctive actions may also be brought by a party for violations of any provision of the Act.
Since 95% of every business transaction is composed of verbal communications, the lease is the most important legal document for both a Tenant and a Landlord. Attention to the requirements of the Pennsylvania Residential Tenancies Act and local rules, diligence in reading and understanding the lease, and compliance with them, will benefit the parties over the life of the lease.
Common Problems and Lease Related Disputes
Lease agreements often become a source of contention between landlords and tenants. A number of concerns have become especially prevalent and seem to be arising with greater frequency. Below are some common issues and how they might be resolved:
Late or Non-payment of Rent
Late or non-payment of rent is by far the most prevalent issue between landlords and tenants and can quickly devolve into a legal action that can be costly for both parties, not to mention economically and emotionally taxing. A landlord should always document any instances of late or non-payment of rent and consider giving a tenant 10- or 15-day notice prior to commencing any action on the agreement. While it is true that Pennsylvania law allows landlords to file an action for possession with the court immediately after rent is due and unpaid, many judges will force parties to bond their action with the full value of the overdue rent (further increasing the landlord’s damages) to dispense with further litigation on the new action .
Failure to Maintain Premises
Landlords and tenants face a unique dilemma in analyzing and resolving disputes regarding maintenance issues in leased real estate. For example, who is responsible for fixing a leaky roof? What happens if a clothes dryer is broken? Pennsylvania courts have a limited amount of case law published on this subject. A recent change to the real estate laws will likely lead to more disputes in this area in the future, but at this time the standard remedy for resolving maintenance issues is the remedy itself. Tenants should act quickly to notify their landlord of any deficiencies in the leaky roof, broken dryer, etc., as any attempts to fix the problem themselves could be detrimental to future claims against the landlord.
Whether disputes arise regarding rent or maintenance, communication is key to resolving issues and coming to a mutually satisfactory agreement without resorting to further legal action.
Terminating a Lease Agreement in the Commonwealth of Pennsylvania
In Pennsylvania, lease agreements can be terminated voluntarily by either the landlord or tenant pursuant to the terms of the agreement. If a lease is for a specific term, then that term must expire in order for a lease to automatically terminate.
However, there are several ways to terminate a lease agreement in Pennsylvania before the specific or agreed upon term has expired. A lease can be terminated early by mutual agreement, by the tenant for a valid reason or as a result of a breach by one of the parties to the lease agreement.
If a tenant breaks a lease without an agreed upon reason, it constitutes a breach of the lease agreement. Breaches of a lease agreement include: If a tenant breaches a lease agreement, it may give rise to an eviction proceeding by the landlord if the breach is sufficiently serious (i.e. nonpayment of rent). In addition, the landlord may have a cause of action to sue the tenant for damages resulting from the breach of the lease agreement. With respect to the landlord’s damages, in Pennsylvania, a residential tenant who breaks a lease typically is only liable for rent through the termination date agreed upon by the parties. This does not preclude the landlord from suing the tenant for any special or consequential damages which flow from the breach. A commercial tenant who breaks a lease typically is responsible for the unpaid rent under the lease until the premises are re-rented or the term of the lease ends whichever comes first.
A lease agreement may also be terminated as a result of an eviction proceeding initiated under Pennsylvania law. An eviction proceeding must be initiated with the appropriate district magistrate and a determination made by the district magistrate that the tenant must vacate the premises. If an eviction proceeding is successful, the court will issue a judgment in favor of the landlord which the landlord can use to have the tenant removed from the premises by the local sheriff’s office.
In most leases, a right to terminate the lease early is governed by the statute. In Pennsylvania, leases for one year or less can be terminated by either the landlord or tenant with thirty days written notice to the other party. Likewise, leases for more than one year can be terminated by either the landlord or tenant with sixty days written notice to the other party. Leases of more than three years, however, are governed by the statute in a slightly different manner. For leases of more than three years, if a party seeks to terminate the lease after one year, that party must provide the other party one year’s written notice terminating the lease.
Any notice necessary to terminate a lease agreement under the statute must be given on the last day of a month and must contain the date the lease terminates. Notice of termination as provided in the statute is not necessary if a party provides a thirty or sixty day written notice to terminate pursuant to the terms of the lease agreement.
How to Draft a Lease Agreement in Pennsylvania
When drafting a lease, a landlord should keep the following in mind:
• Generally the more specific the lease agreement the better, that is to say even if the law permits you to avoid specifying certain expenses such as who is responsible for paying heat and water, it is better to provide more specificity so as to minimize misunderstandings before they arise.
• Avoid vague, ambiguous or unclear writing in a lease agreement. When a dispute arises, words will be construed by a judge as any layperson would construe the language without the legal jargon. If there is any room for a difference of opinion on an issue, the language should clearly express what the parties intended to mean prior to any disagreement.
• Make sure you include all of the provisions required of a lease under Pennsylvania law.
• Include a section particularly if the tenant is responsible for paying the utilities that provides that if the tenant does not pay any utility bill, you have the right to make the payment and add same to the rent due.
• Include primary clauses such as premises , term, rent, security, late fees and default as well as boilerplate provisions defining the relationship between the parties, giving reasonable notice requirements, and excluding or limiting liability.
• If the tenant is required to pay a large sum of money in a lump sum at the end of the lease, consider breaking the payment into monthly installments and/or charging interest. Tenants may not have the full amount available when the payment becomes due so breaking the amount due into smaller pieces and charging interest on the amount outstanding may induce the tenant into complying with the terms of the lease.
• Add a holdover provision so that the lease continues month to month after the initial term in the event you forget to send out a termination notice and there is no agreement reached between the landlord and tenant for another term.
• Include a clause providing for attorney’s fees provision if the landlord must pursue collection from the tenant as sometimes you may not be able to recover the legal fees under the Pennsylvania Landlord and Tenant Act.