What is a Pennsylvania Lease Agreement?
A lease agreement in Pennsylvania is a legally binding contract between a lessor (landlord) and a lessee (tenant) for the rental of a residential or commercial property. The lease stipulates the rights and obligations of each party during the term of occupancy. Typically, a Pennsylvania lease will cover the payment of rent in the form of money, as well as non-payment terms – what happens if a tenant does not pay or is late to pay their rent. It will also include terms for property maintenance by both the landlord and tenant. Other terms include the lease’s effective term date , expiration date, deposit (if any), and termination date. Both the landlord and tenant must sign the lease agreement before any rental action takes place.
Pennsylvania law permits both a landlord and a tenant to be held accountable for their actions by the lease agreement, regardless of their active participation in the management or upkeep of the property.
Essential Elements of Pennsylvania Lease Agreements
A properly structured lease agreement is crucial to establishing clear expectations between the landlord and tenant. Lease agreements are usually outlined in a standard form, but some provisions are more important than others. The following components are essential to a Pennsylvania lease agreement:
Rent amount. The lease agreement should clearly indicate the monthly rent amount as well as the method and due date for payment. Lease agreements often include provisions for rent increases as well.
Duration of lease. The lease agreement should state whether the lease is for a definite term or whether it is month-to-month. If the lease is for a definite term, the termination date should be clearly stated. If not specified, fixed-term leases terminate at the end of the lease term and do not automatically renew, while month-to-month leases automatically renew until terminated by the landlord or tenant.
Security deposit. The security deposit amount, due date for payment and process for return should be specified in the lease. Specify the reasons for making deductions at the end of the lease from the security deposit. If the lease is for less than 18 months, the security deposit cannot exceed an amount equal to two months’ rent. However, if the lease is for 18 months or more, the lease agreement may specify a security deposit equal to one month’s rent plus the greater of $200 or one percent of the annual rent amount.
Maintenance responsibilities and restrictions. The lease agreement should clearly state the landlord’s and tenant’s respective responsibilities for maintenance and repairs, as well as any restrictions on tenant conduct or changes to the property. The lease should prohibit unauthorized door-to-door soliciting and the installation of additional locks without the landlord’s consent, for example.
The landlord should provide a written statement stating that the landlord is responsible for maintaining the premises, or that the tenant assumes that responsibility. Any references to "implied warranties" can lead to misunderstandings about maintenance responsibilities.
Pennsylvania Lease Agreement Law
In the state of Pennsylvania, lease agreements are governed by common law, which controls a great many areas in Pennsylvania property law. This means that, instead of a plethora of rules governing leases, as is true in some states (Arizona, for example), common law simply sets the groundwork upon which lease agreements are built. The guidelines provided by common law apply to all lease agreements—commercial and residential—in all areas of the state.
In Pennsylvania, a lease or rental agreement is required for any tenancy that lasts more than 15 days. While there is no restriction on how long a lease can last, it is uncommon to find leases that last for more than a few years. Particularly long leases can contain specific clauses which limit the renewal of the lease (for example, tenants might not be permitted to stay at the property if it is sold by the landlord).
A number of statutes affect real estate leases in Pennsylvania. For example, landlords may not request or accept first month’s rent and a security deposit without providing receipts to prove the existence of both "rents and security funds," and security deposits may not exceed two months’ rent. Tenants have 30 days to move after payment of the final month’s rent or the expiration of the rental period, whichever is longer, unless otherwise agreed. Tenants have seven days to pay unpaid rent before a landlord can provide notice of termination. Tenants cannot be charged for repairs due to tenant neglect, but they may, by agreement, participate in certain types of repairs (for example, they might agree to do minor maintenance work in return for a small discount on rent). Any for of retaliation against a tenant because of a tenant complaint or action is illegal.
There are a number of other laws relating to leases in Pennsylvania.
Types of Pennsylvania Lease Agreements
One common type of lease agreement is the fixed-term lease, which is for a specified period of time, and it often contains specific stipulations related to how and when rent is paid, the amount of security deposit required, whether pets are permitted, whether smoking is permitted, and other restrictions according to its terms. Oftentimes, the lease agreement will be for a one-year term, but it can be for any term as agreed upon by the landlord and tenant. It automatically terminates at the end of the specified lease period unless the parties agree to extend its terms by a written amendment. After the fixed-term expires and if no new lease is signed, the agreement typically converts to a month-to-month lease.
A month-to-month lease is an open-ended lease that continues for one month at a time until either the landlord or tenant takes action to terminate it, either through giving notice or by action of law. A month-to-month lease can become a nuisance to the landlord/owner because the tenant can easily terminate the agreement on relatively short notice with almost no chance the landlord can replace the tenant.
A commercial lease is a lease agreement for commercial, industrial, or business-related purposes, and it has many similarities to a residential lease, but it can also contain certain provisions specific to the needs of the tenant, such as the type of business to be operated, whether subleasing is permitted, or whether wine tasting is to be conducted on the premises.
A sublease is an arrangement where the tenant shows the intent to rent out the rental unit or part of the property to another tenant for the remaining rental period, with the original lessee remaining responsible for making all rent payments. Such written subleases may be expressly permitted by the original lease or not specifically prohibited therein. The landlord has approval rights to sublease in most circumstances. However, if the landlord lacks the right to prevent subleasing, the original lease is not considered to be breached by the replacement tenant’s actions.
A residential lease for a single-family apartment or house is customized according to the number of bedrooms, bathrooms, level of amenities, square footage, and whether the property is furnished or unfurnished.
Writing Pennsylvania Lease Agreements
A lease agreement essentially constitutes a legally binding contract between the landlord and tenant in Pennsylvania. Though not legally required, the existence of a written lease agreement is certainly highly recommended in any rental engagement. Not only does implementing a lease agreement provide essential legal protections, but also it helps to avoid confusion on certain conditions and obligations of the landlord and tenant.
The first step in drafting a written lease agreement involves conversation with the tenant. With appropriate information from the landlord, such as whether pets are allowed or whether parking spaces will be provided, the tenant can provide critical information about his or her needs in living at the new location. Of course, it is wise to ensure that the information provided by the tenant holds up to scrutiny. For example, if he or she states that two people will occupy the premises, that should not turn into four residents being added to the household.
Additionally, it is critical to treat all existing and prospective tenants with equal opportunity , which is crucial in avoiding a discrimination claim. If you have advertised apartments, houses or other rental properties and stated that you are happy to accept Section 8 Housing Assistance Payments Program (HAP) Vouchers, for example, you will obviously need to provide your properties to Section 8 tenants who possess HAP vouchers.
The next step involves consulting with an experienced Pennsylvania real estate attorney to create the lease agreement itself. In addition to helping the landlord protect his or her property and assets through the use of the appropriate legal language, the attorney can make sure that the lease agreement is valid and in accordance with Pennsylvania law. This could help all parties avoid costly litigation in the future.
Pennsylvania is well-known as being pro-landlord, but there are certain circumstances in which the law offers a tenant increased protections. From having specific water, heat or electric requirements to needing a lead paint disclosure in certain cases, landlords must know and understand the relevant legislation that applies to their rental properties.
Modification and Termination of Pennsylvania Lease Agreements
Lease agreements can be modified or terminated for a variety of reasons. Some reasons are essential to the survival of the agreement, while other reasons are merely for the convenience of either party. The essential reasons for modification or termination typically include an inability of one party to fulfill their obligations under the terms of the agreement. For example, a tenant could suffer a permanent impairment, preventing them from living in the premises. The standard lease may have a provision for a temporary medical absence, but only the parties know if someone is unable to return to the premises for the foreseeable future.
An essential termination would likely involve an inability of the tenant to maintain possession of the premises, which may be due to a change in the law or resolution of a criminal matter.
Not every essential modification results in an early termination, and not every early termination results in a modification to the balance of the agreement. For example, if one party suffers a permanent impairment and is unable to continue in the agreement as it exists, the parties may negotiate a modification to release the injured party from their obligations while continuing the agreement with the unaffected party as the sole remaining party. This is possible in the case of several situations, like when one party is incarcerated or institutionalized, experiences a debilitating injury, begins an extended engagement in military service, or otherwise can no longer fulfill their obligations under the agreement, either temporarily or permanently.
Modification or termination for convenience is less apparent. If the parties are otherwise content in continuing the agreement, they may both attempt to negotiate a modification to the lease. The negotiations can take many forms – for example, they can be in the form of a written notice, or in the form of an oral request.
In the Commonwealth, there are two ways in which the lease agreement could be modified at its inception (this does not include a renewal of the expired lease): Amendment or Severability. Amendment occurs when either party proposes an alteration to the terms of the agreement and the other party agrees to the modification. The parties resemble anything more than a verbal or written agreement. Severability occurs when this amendment places specific limitations on the application of a particular clause, but does not affect the validity of the remainder of the contract. This is rare, but can be invoked at the discretion of the court.
The inability to modify the lease agreement at its inception does not remove the associated right to do so at any point thereafter. For example, the parties may negotiate on September 1 to seal an amendment to the agreement, but it may fall through. Subsequently, the parties could negotiate on October 15 and find mutual terms. This process can and often does repeat for the life of the lease.
Termination of a lease agreement can be accomplished prior to the eviction of the tenant. The eviction process can be long and arduous, and some landlords, perhaps for their convenience, will elect to terminate the lease agreement and choose to move for an eviction. If the parties mutually agree to terminate the lease, there are a few options available, and those can include: Mutual Termination If the parties intend to terminate the lease, they may expressly write out the cancellation of the lease without giving any reason. Constructive Termination A party to the lease agreement may file a motion with the Landlord and Tenant Court to seek relief. The tenant can allege the property is uninhabitable or lacks essential services that the landlord is required to provide. Alternatively, the landlord can allege that the tenant is in violation of an essential aspect of the agreement. Early Termination by Tenant A tenant can elect to terminate an agreement for a variety of reasons, including sufficiently difficult living conditions due to the negligence of the landlord in providing habitable conditions. Additionally, forced relocation by law enforcement can sometimes result in a modification to the lease, if the tenant is never to return to the location. Alternatively, an early termination by the tenant can result in a simple lease modification to a new lower rent or a reciprocal or minor renegotiation of the terms of the lease. Finally, a tenant can walk away from the rental unit if they choose, leaving the landlord to pursue whatever civil claims they deem appropriate under their lease agreement. However, the tenant should be aware that unless the court explicitly says any modifications apply retroactively, then the rent will be due, and they will have to litigate it if the landlord seeks to enforce the balance of the unpaid rent.
Dispute Resolution in Pennsylvania Lease Agreements
Even the most amicable tenant-landlord relationships can suffer from disputes after a lease becomes effective. The scope of disagreeing may range from unpaid rent and property damage to safety violations and criminal activities occurring in the rental unit. Windfall attorneys have first-hand experience handling these matters, and we can help you determine the nature of your disagreement and prescribe a path toward resolution.
Mediation
Both commercial and residential landlords are well within their rights to include a binding mediation or arbitration clause in a lease agreement. These provisions govern how landlords must attempt to resolve their disagreements with their tenants. To settle a dispute before resorting to filing suit, a mediation clause will require the landlord and tenant each to select a mediator from a pre-established list. From there, a mutually-agreed upon time and place is selected for the mediation. In addition to the parties’ presence, they may bring any relevant document and witnesses to the mediation session. In the Mediation, an attorney will typically advocate for a party’s rights (with or without the party present). It is the mediator’s responsibility to listen carefully to both parties’ positions and help them reach a compromise that works for both parties. While a mediation clause is not legally required in a lease agreement, it can save a tenant and landlord from further litigation.
Court
Landlords can file a Complaint with the local District Court if they do not wish to pursue their dispute with a tenant through mediation . Before a proceeding takes place, the landlord must serve both copies of the complaint and summons via sheriff or constable to the tenant. Plaintiffs are also required to send the tenant a notice explaining the nature of the Complaint via certified mail or by personal delivery 10 days before the hearing.
After proper service the Court will conduct a hearing. The landlord and tenant will each be asked to present their position in the dispute, including witness testimonies and documentation supporting their claims. The Court will then issue a Judgment based on the evidence provided and the facts presented at the hearing. Both plaintiffs and defendants have 30 days to appeal the Court’s Judgment at the Court of Common Pleas level. Failure to attend the hearing results in a Default Judgment against the tenant – this means that the landlord is automatically awarded the relief requested in their Complaint and has the option to proceed towards an execution of judgment, or eviction of the tenant.
Tenant Rights
Pennsylvania law grants tenants a multitude of rights regarding the resolution of disputes within a lease’s timeframe. Tenants have the right to 10 days’ notice prior to a mediation session, and their attendance is not absolutely required in every case. If a tenant chooses to skip a mediation session, they can send an attorney or representative in their place. Tenants also have the right to request that the court continue a hearing for up to 30 days in order to obtain an attorney to represent their interests. The two parties are each allowed to have one continuance in a given case.