What’s a Residential Lease Agreement?
A residential lease agreement in Indiana is a legally binding contract between a landlord and a tenant for the rental of residential property. The purpose of a lease agreement is to set forth terms and conditions under which a tenant may occupy a property in exchange for rent. In Indiana, residential lease agreements are primarily governed by Title 32, Article 31 of the Indiana Code, which governs a variety of landlord-tenant relations.
A residential lease agreement is very important because it can provide information about the rights and responsibilities of the landlord and the tenant. Generally speaking , a lease agreement in Indiana will contain clauses or provisions that specify the following:
A residential tenancy in Indiana can be formed without a written agreement; however, the terms of the lease would be governed by Indiana’s statutory laws and custom as interpreted through case law. The lease, if it meets Indiana’s Statute of Frauds requirements, is a good idea if you want to avoid having a dispute with your landlord or tenant, as it is evidence of your obligations.
Essential Elements of an Indiana Residential Lease Agreement
To form a residential lease agreement that is legally enforceable under Indiana law, certain essential elements must be present. The names of the parties to the lease — including the lessor (landlord) and lessee (tenant) — must be clearly stated. The agreement should describe the property being leased, with specifics as to property description, whether or not the lease applies to a single-family home, a condo, an apartment or some other type of dwelling. The length of the lease and the exact dates of tenancy are another requirement. Additional lease components include the amount of rent due under the lease as well as payment terms such as rent due date, grace period and method of payment. A list of pre-occupancy inspections is also commonplace, though can be added as an addendum to the lease rather than included in the lease.
Statutory Requirements for Lease Agreements in the State of Indiana
A lease is not simply a verbal agreement between the landlord and tenant. It is a contract that has to be written down before it can be enforced. Indiana Code § 32-31-5-4 requires rental agreements to contain the following language or similar: "The parties agree that the tenant shall not sublease the premises without the landlord’s prior consent." Idiot’s Delight, LLC v. Tri-State Companies, Inc., No. 53A01-1311-SC-605, 2013 WL 6503655 at 7 (Ind. Ct. App. Dec. 12, 2013).
Furthermore, any lease agreement over twelve months needs to be in writing to be enforceable. Failure to do so will result in the lease being void and unenforceable. See generally Ind. Code § 32-21-1-1. Indiana also prohibits landlords from prohibiting a tenant from having pets when they are enrolled in a university, if the pet is a service animal (IC 32-21-9-29), by failing to have smoke detectors installed (Ind. Code § 32-31-8-1; Ind. Code § 32-31-8-2) and by failing to install carbon monoxide detectors (Ind. Code § 32-31-8.2). The Tenant’s Rights Act, Ind. Code § 32-31-8-7, states that a tenant can only occupy a unit that is clean, safe, habitable, and compliant with building, housing, health, and safety codes. The unit must also have an adequate supply of hot and cold running water, sewage disposal facilities, and heating facilities for the winter. Any provision in the lease stating otherwise is not enforceable.
Rights and Responsibilities of Landlords and Tenants
Yes, the terms of the contract are crucial to landlords and tenants. But the parties also have certain rights and obligations under the Indiana Residential Landlord-Tenant Law found at I.C. 32-31-1-1 et seq. The law governs most residential leases in Indiana. So, even when no specific provision is contained in the written lease, the law still applies. If the lease fails to address a particular issue, the law fills the gap.
Repair and Maintenance
In the simplest of terms, the landlord has a duty to maintain the residence and its systems in a "habitable" condition. (E.g., plumbing, heat, electric). It is also the responsibility of the landlord to make reasonable efforts to repair or replace.
The resident (sometimes referred to as tenant) must keep the residence in a "reasonably clean and sanitary" condition. The resident must also promptly inform the landlord when there is a problem that requires repair.
Entry Rights
The landlord has the right to enter the residence and make repairs. The law requires a notice to be supplied to the resident describing the purpose of the entry. The law also makes an exception where it can be reasonably inferred that it is an emergency.
Security Deposits
The law provides a limit on the amount of security deposit that may be charged. Unless otherwise specified in the lease, the maximum amount is the equivalent of one month’s rent. There are specific requirements for returning the deposit within 45 days of vacating the premises.
Common Provisions of Indiana Residential Lease Agreements
Lease agreements will typically include a number of common clauses that the tenant can expect to see. These clauses will cover matters like the pet policy, conditions for termination and renewal, and what happens if the tenant fails to pay rent. Each of these areas deserves a thorough review before the tenant signs the lease.
The lease agreement will often cover a number of matters such as large pets and aquariums. The rental company and tenant should talk about cats, dogs and birds, including breeds, expenses involved and size restrictions. Large aquariums can also be a sticking point. Some apartments even place restrictions on vermin pets, such as gerbils, hamsters, guinea pigs and lizards.
Many leases will cover what happens if one party wants to terminate the lease early . Can the landlord terminate early? Can the tenant? Do some conditions apply for both? If termination is possible, what must a party do to make it happen?
Renewal options and terms are often included in the lease. This should include mutual rights as well as whether notice is required. If the landlord plans to raise rent, it should also be noted in the documents.
If the tenant fails to pay the rent or stops making the necessary payments, what action can be taken against him or her? The lease should discuss the procedures for collecting past due rent as well as the action the landlord can take if he does not receive the rent on time. Some leases also include an option for the landlord to void the lease if rent is not paid or the notice is ignored.
In addition to these three topics, a lease will often include several other topics. It will cover details such as the payment process, maintenance guidelines, noise rules, and whether the tenant has the right to sublet the property.
Resolving Lease Disputes in the State of Indiana
A plethora of disputes may arise in the performance of an Indiana residential lease after it has been entered into. The two types of disputes that most commonly arise include: (1) disagreements concerning the actual terms of the lease; and (2) matters arising from the breach of the lease by either landlord or tenant. These disputes are discussed below:
A landlord-tenant relationship is almost exclusively contractual in nature. The lease agreement entered into by the parties is considered a contract and is governed by the general contract law of the State of Indiana.
It is important to remember, however, that even if an issue arises that is not specifically addressed in the lease, the terms of the lease will most likely be construed against the landlord since the landlord prepared the document and the tenant had no choice but to sign. It is strongly advised that all information, no matter how insignificant, is put in the lease agreement so as to not give rise to a dispute as to the intent of the landlord or tenant.
If consideration is required for a modification of the lease, it must be done in writing and appended to the original lease.
Either party to a residential lease may be able to demand mediation in regard to a dispute. Mediation is essentially a meeting between both parties and a person neutral to the dispute who attempts to broker a solution between the parties. Regardless of the success of a mediation, the landlord and/or tenant may still pursue litigation as provided by law.
Small claims court generally resolves disputes in Indiana with respect to residential leases.
Tenants are also given a statutory right, pursuant to Indiana Code § 32-31-8, to file a small claims action against a landlord who has damaged the tenant, his/her family, or their property. Common actions for tenants to file in small claims court include seeking damages for a breach of the warranty of habitability, including unsafe or unfit living conditions in the residence, and seeking to recover a security deposit.
Know These Tips Before Signing a Residential Lease in the State of Indiana
When it comes to the rental market in Indiana, both landlords and tenants should be vigilant in their approach when it comes to a lease agreement. From the complicated legal jargon to the potential hidden costs, Indiana law requires certain information be disclosed within the lease. So how do you know if your Indiana lease terms are compliant with state law?
Your first step should always be to read your lease in its entirety. After doing so, ask yourself the following questions: If the answer to any of these questions is "yes," your Indiana lease may be non-compliant with Indiana law. Indiana law requires that a lessor (a landlord) must give a tenant written notice prior to entering into a rental agreement. This notice must include the names and addresses of the lessor and the lessor’s supervisor. If you’ve not seen such a notice, your Indiana landlord is not complying with the law. Besides the basic names and addresses, Indiana law requires a landlord to provide basic "home security" features in its properties. Specifically, the property should have working deadbolts on each exterior door, a peephole or eyehole in every exterior door, and window locks in working order. Regarding rental price, Indiana law requires the landlord to advise the tenant, in writing, of the rent and associated amounts (like utility fees) due at the beginning of the tenancy. If these amounts are not clear, this suggests that your Indiana landlord is not complying with the law. Indiana law requires a security deposit to be held by the landlord, but limits the amount to one month’s rent. A security deposit can be used to cover necessary repairs that were not caused by tenant’s wrongful acts (like an emergency service call for a broken furnace that was never communicated to the landlord). If you’d like clarification of what can be deducted from your security deposit upon move-out , ask your Indiana landlord about this in advance of signing. Before your lease even starts, you deserve to know what deductions are allowed and which will lead to a court battle, if they occur. The holy grail of tenant-landlord litigation is whether the Indiana landlord had an obligation to repair the property and whether the tenant informed the landlord of the necessity to repair this issue. (We know, we’re exaggerating a bit.) The Indiana Code does not go so far as to provide guidance regarding the procedure that a tenant must use in order to notify a landlord of a defect or detriment to the property. Instead, the Indiana Code basically says that the tenant must notify the landlord and give him or her an adequate period of time in which to act. Indiana courts have said that an "adequate time" to act is simply "reasonable," which depends on the type of repair and the circumstances. Generally speaking, however, a period of 30 days is considered reasonable for the landlord to effectuate a repair of the defect or detriment. After this period of time has passed without any change, the tenant should be able to claim constructive eviction. However, please keep in mind that the tenant may be responsible for acts that happened while he or she was living there, and is required to pay for damage caused by wrongful acts on the part of the tenant, including destruction of the property itself. While no one wants to sign a lease that requires a $10 per hour handyman be onsite at all times, it is important to note that Indiana law does not require a tenant to fix ordinary wear and tear on the property, if caused by the tenant. Indiana courts will generally say that normal damages can be "scheduled back into" the rent prices over the course of the lease term. In fact, a provision in a lease agreement that requires a tenant to cover costs of ordinary wear and tear is not binding and cannot be enforced against the tenant.