Condo Lease Agreement

A condominium can be the perfect solution to a simpler life if you’re open to downsizing. It can also be a stepping stone for those who are taking their first step to having their first home. While renting out a condo can be a little tricky because each falls under the jurisdiction of a project or building administration, adding a few clauses into lease agreement templates can weed out the unnecessary complications.

What is a Condominium?

A condo is a unit or room in a building that shares common areas with other people, much like a hotel. Renting a condo is very similar to a residential lease. However, in a condo lease agreement, the tenant or lessee is subjected to association fees, which are typically used for building maintenance or improvements of its facilities.

Here are the different types of condominium rentals:

  • Land lease condo  In some cases, buildings are owned by the association, but the land is a property of someone else (commonly the government). When this happens, a condominium association faces uncertainty. When the land lease ends, some associations merely raise the association fees. In worst-case scenarios, the association is dissolved and replaced by new management. If condominium owners have a deed, there is nothing to worry about as they get to keep their units. A change in management will be a hassle, though. If the building is under a land lease, it’s important to check when their term ends before signing into a lease agreement.
  • Lease hold condo  In this type of condominium lease agreement, an owner also becomes the lessee. Just like a lease-to-own lease agreement or mortgage, the owner continually pays for space. In a sense, they own part of the building. However, once they stop their payment, the association has the right to kick them out, forfeiting their previous payments. Leasehold condominiums are also commonly under a land lease.
  • Freehold condo – On the opposite pole of the condominium lease system, a real estate freehold is similar to buying a residential home, where you own the land and the house itself. In a freehold condo, the owner owns a piece of the land where the building resides and therefore doesn’t face the uncertainty of management problems or the raising of the rent. Unfortunately, a freehold lease significantly costs more than a leasehold.
  • Life lease condo – Rather than a “type of lease,” a life lease can be considered a “marketing strategy.” The building often only appeals to certain demographics like seniors or small families with children. As the title itself implies, life leases support a person’s lifestyle through its facilities and other services.

Tips on How to Lease Out a Condo

Renting out condominium units is very similar to residential leases, but it does have special considerations. Here are some tips to ease your leasing process:

Tip # 1 – Identify the type of condominium

Just like renting out a house, the landlord and lessee must have a common ground on the unit’s floor plan. Instead of asking several questions and going back and forth with the conversation, both parties can use these descriptors when discussing:

  • Studio-type Condominium – Smaller, with a single open layout and no other rooms
  • One/two/three Bedroom Condominium – Bigger, with separate rooms
  • Loft – Bigger, with an open layout and high ceiling. These are typically best for office use.
  • Bi-level Condominium – Has a second floor
  • Penthouse – The biggest area in a building, typically located on the top floor and is sold or rented at a premium price

Tip # 2 – Find out about your “neighborhood”

In a condominium, the neighborhood can be quite a bit “closer,” in a sense. Because of this, people can be nosey or noisy—depending on their mood—which can result in misunderstandings. Landlords must know what their neighbors are like to make sure that the potential lessee can fit in. This will save them from future complaints about their lessee. On the other side of the coin, the lessee must also ask questions about the neighbors to save them from potential issues.

Tip # 3 – Review your association’s terms.

All buildings have a set of guidelines, which the owner must abide by. When renting out the unit, however, the lessee will also be subject to these rules. It’s crucial for the landlord to review all the association’s guidelines before advertising the unit and before writing the lease agreement. It is typical for landlords to visit the association office to ask questions and get advice before advertising their condominium lease availability. In addition to this, they may also ask help from an attorney, so he or she can foresee issues before the condominium lease commences.

Filling Out Condominium Lease Agreements

You don’t need to start from scratch with our free condominium lease agreement below. To make it easy to use, FormsPal formatted it like a lease form without compromising the integrity of legal lease agreement templates.

Step 1 – Download the lease form below

Use any of the lease agreement template document below:

  • Condo Lease Agreement Template– Open Office Format (.odt)
  • Condo Lease Agreement Template – Microsoft Office Format (.docx)

If your computer asks you to install any program before you can open the lease form, download the correct program. You may have to make a free account before the download begins.

Step 2 – Add the landlord’s and tenant’s general information

Condo Lease Agreement_1

For part 1 (Landlord) and part 2 (tenant) of the template, type the following sequentially:

  • Full name
  • Complete address
  • Landline and mobile numbers
  • E-mail address

Step 3 – Describe the condominium lease terms

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In this clause, type the following:

  • 1st Line: Insert the complete address (number, floor, building number, street, area, city, county, state, zip code.)
  • 3rd Line: Title of the Project (you may ask the building administrator)
  • Decision point A: Select A1 if the owner owns a parking space and would like to include that under the rental. Otherwise, select A2 if this option is not included.
  • 4th Line: If you selected A1, indicate the parking slot code.
  • 5th to 6th Lines: Typically, residents of condominiums have access to common areas such as the pool, lounge, business centers, laundry areas, etc. List these down if applicable.

Step 4 – Read the regulations of the condominium

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This provision is typically accompanied by another document that details usage of spaces, purpose of renting, terms of use, or answers for frequently asked questions.

Though the regulations of the building are not stipulated in detail inside the condominium lease agreement, these can be attached as riders to the condominium lease template. This rider must also contain necessary information like terms of use, building services, and names of important contact persons. Documents like these are usually made available on the association’s website.

Step 5 – Type the important dates of the lease agreement

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Line 1: Indicate the beginning of the condominium lease.

Line 2: Indicate the date the lessee may occupy the space (usually the same as the first line, but can be scheduled a few days before or after the lease date).

Line 3:  Indicate the date when payment should start. You may delay the first payment if the property needs repair or if a condo lease document needs to be finalized.

Step 6 – Identify the rental terms

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  • Decision point B: Select B1 if the condominium lease agreement is renewed every month, or B2 if there is a fixed duration for the condominium lease. If B2 applies, type the number of months on its first line.
  • Line 1: Write the fee for the key replacement of the condominium unit
  • Line 2: Write the fee for replacement or repair of the main gate or garage

Step 7 – Indicate the monthly rent

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  • Line 1: Write the monthly fee in dollars
  • Line 4: Write the day in which the payment is to be paid (e.g. “6th”)
  • Line 6: Tick the box if the lessee will NOT pay for any additional charges.
  • Line 7: Tick the box if the lessee will pay for any additional charges. Indicate the amount in dollars.
  • Line 9: If you selected line 7, list spaces or fees that the lessee will be paying for (e.g. parking, pool maintenance, association fees, etc.)
  • Line 10: Indicate if the additional payment is due “monthly” or “quarterly”. The second line shows when the additional payment is due (see line 4).
  • Line 11: The period when the additional payment is due (e.g. “each Month”)

It will be best if the date in Line 4 is similar to the dates in lines 10 and 11 to avoid confusion.

Step 8 – Identify the amount of the security deposit

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  • In Decision Point C, choose C1 if there is a security deposit to be paid (usually three times of the monthly base payment at maximum). Otherwise, choose C2 if the landlord and tenant have agreed that there is no need for this.

Step 9 – Indicate which utilities will be paid during the rental

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Since a building’s utilities are shared with other units, the association is typically strict with payments. As such is the case, landlords get an estimate of a tenant’s electrical and water use. Then, they can add that to the monthly base payment. However, if both agree that the utilities will be diligently paid by the tenant, this provision of the condominium lease template may be subject to modifications through an attorney.

Step 10 – Read the standard limits of use

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  • Section 9: Permitted Use
  • Section 10: Decorating Condominium Unit; Changes to Unit

Should you need to make modifications to these condo lease agreement terms, please consult with an attorney. You may ask for assistance in adding a provision for other types of usage such as inviting family guests, business purposes, temporary events, and other circumstances.

Step 11 – Check if animals are allowed in the condominium

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In most cases, ownership of pets is regulated by the association. Please refer to their terms or rules and regulations before finalizing section 11. If animals are allowed in the building, the condominium property owner may either:

  • Prohibit animals (tick box D1)
  • Allow certain pets and breeds (tick box D2).
  • Line 1: If D2 applies, other guidelines on pet ownership may be added.

You may also want to check with your state law regarding ownership of exotic animals or ant farms, just to be sure. Remember: Both parties are liable for what happens inside their condominium units. Landlords, in particular, have obligations to resolve any issue caused by their tenants.

Step 12 – Explain the maintenance process

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  • Lines 2 to 3: Explain the process of submitting requests when under the duration of the rental. This provision ensures that while upkeep is the landlord’s responsibility, lessees must also contribute to the solution by filling out documents.

Step 13 – Determine insurance arrangements for tenants

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Decision point E: Choose E1 if the tenant is required to have insurance during the lease. On the other hand, the tenant may choose E2 and simply waive the property owner of any responsibility and acknowledge the risks of not being insured. On the blank provided, the tenant must write his or her initials in print.

Step 14 – Allow or prohibit subletting

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Decision point F: Tick the first box (F1) if the lessee is NOT allowed to get a roommate or allow another person to sublease the condominium on their behalf. If this is allowed, tick the second box (F2). Take note that this clause is different from having guests over. If the set-up is unclear, you may ask the help of an attorney to clarify.

Step 15 – Set default arrangements of the condominium lease agreement

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Line 5: Indicate how many days the lessee has to cure the breach of contract. Based on the terms of this provision, landlords have the right to press charges according to law or evict tenants if the breach is not cured.

Step 16 – Disclose lead-based paint warnings

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Decision point G: Tick the first box (G1) if the condominium property and the building do not use lead-based paint. Tick the second box (G2) if it does. The lessee should then write his or her initials in print on the blank provided.

This disclosure is not only required, but it is also the right of the tenant to know about potential health hazards.

Step 17 – Sign the condominium lease agreement

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Print the condominium lease template. Afterward, write the date of contract signing (stamped or in print),

For both parts 3 and 4, write the following for the landlord and the tenant, respectively:

  • Signature
  • Full name
  • Title

In addition to signing the last page, both parties will also need to affix their signatures on every page.

A condominium is a profitable asset to lease out, especially nowadays when people are downsizing and aiming for a simpler lifestyle. Though it comes with lots of perks like shared facilities, a condominium lease comes with special provisions and stricter regulations. There are also additional monthly payments and tougher usage monitoring of renters to avoid negative circumstances. Still, this can be rewarding and easier with the help of lease agreement templates, which are free for download on FormsPal.

Published: Sep 22, 2020