An Indiana residential lease agreement is a binding contract between a landlord and tenant regarding the rental of an apartment unit, townhouse or single family home. These agreements contain the essential terms of a lease arrangement including rent, due date, security deposits, notices to vacate or quit or to raise the rent, and the various obligations each party owes to the other.
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Indiana has two forms of rental agreements—periodic tenancies and tenancies at will. The former are for a fixed time and are usually in writing while a tenancy at will can be oral, last indefinitely and is similar to a month-to-month tenancy arrangement.
Indiana follows some aspects of the Uniform Residential Landlord and Tenant Act (Act). This includes a landlord’s duty to provide a residence fit for habitation, which means providing a reasonable amount of heat, electricity, hot water and sanitary systems at a minimum. They are also required under the Act to make repairs and comply with housing and building codes. No landlord may refuse to rent to or treat a current tenant differently based on race, color, gender, familial status, religion, national origin or disability.
A tenant has a duty to keep the leased unit sanitary, to not damage or alter the premises, to dispose of garbage and not disturb other tenants’ quiet enjoyment of their own leased units. Tenants must allow landlords reasonable access to the unit after notice to make repairs.
Contents of the Lease
All leases contain essential terms that define the duties and obligations of each party and what constitutes a breach. As an Indiana landlord, you can include other terms as well so long as they do not limit the statutory and civil rights of your tenants nor deviate from your own duty to comply with local ordinances, state and federal laws.
Your Indiana residential lease agreement should contain the following terms and provisions:
- Name of landlord or agent living in Indiana who is authorized to manage the property, and address where rent is to be paid as well as where notices and other legal documents may be served
- Names of the tenants and other occupants who will be living in the unit
- Description of the premises
- Term of the lease—weekly, monthly, yearly or other
- Amount of rent, due date, and grace period before a late fee may be imposed
- Returned check fees—whatever the bank charges
- Security deposit—no limits, no interest required, return within 45 days of vacating unit
- Signed, separate statement of the premises’ condition including list of current damages to be given to tenant
- Obligations of landlord regarding repairs and maintenance including maintaining common areas
- Obligations of tenant
- Responsibility for utilities
- Major appliances that are being provided
- No unlawful use of premises by tenant or conduct that constitutes a nuisance
- Pet clause—a deposit may be nonrefundable. No deposit is permitted for service animals with some exceptions
- Subletting clause
- Right of entry by landlord to make repairs, inspect and show to future tenants or purchasers—must be done by reasonable means
- Notices regarding termination for nonpayment of rent, other lease violations
- Notice for increasing rent—30 days unless you state otherwise (may not be for a discriminatory purpose)
- Disclosure of the presence of any lead-based paint or hazards on the property for rental property built before 1978—both landlord and tenant must sign an EPA-approved disclosure form and the tenant provided an EPA pamphlet entitled “Protect Your Family from Lead in Your Home.”
There are local ordinances that may require you to have certain terms included in your lease or govern how your treatment of your tenant. Be sure you are familiar with these ordinances before you enter into a landlord/tenant relationship.
Just as there are terms and provisions you need or want in your lease agreement, there are terms that you must not include or face the potential of having to pay damages to the tenant. You may not include certain terms that force a tenant to waive certain rights including the right to sue for damages or to be evicted without a court order. Some prohibited lease terms include:
- Waiver of right to sue landlord for neglecting duties or obligations
- Requiring a tenant to prepay the rent if not obligated to do so
- Taking a lien or security interest on the tenant’s personal property
- Allowing entry at any time without notice or prior arrangements
- Prohibition on joining a tenant’s union
- Allowing eviction without notice or without court order
- Waiver of any section of the law regarding security deposits
There is no limit on how much of a security deposit may be charged and no requirement that the deposit be placed in a separate, interest bearing account. The deposit does have to be returned in full within 45 days after the tenant vacates the unit unless the landlord sends a written statement outlining the damages found in the unit and what portion of the deposit will be deducted for expenses. The landlord is not responsible for returning the deposit until the tenant gives notice of a forwarding address. The list of damages and expenses must be accompanied by a check for the remaining amount of the deposit after deductions. If these procedures are not followed, the total security deposit must be sent to the tenant.
A deposit may be used by the landlord for unpaid rent or unpaid utility costs for which the tenant was responsible but the tenant may not use the deposit for the last month’s rent, or for any arrearages, absent consent by the landlord or a stipulation to that effect in the lease. Normally, the security deposit is used to pay for damages caused by the tenant or guests that are not the result of deterioration or normal wear and tear.
Although not required, it is usually a sound idea to provide the tenant with a check-in list of the damages and current condition of the unit and allow the tenant time to review the list, sign and return it.
There is no statute regarding landlord entry but you may not enter indiscriminately without giving reasonable notice. Most leases provide for 24-hours’ notice or when it is convenient for the tenant but the tenant may not refuse entry once reasonable notice has been given. For emergencies such as loss of heat, fire or floods, the landlord should be able to enter without notice.
Termination of Lease
Once the lease or periodic tenancy ends, the landlord may choose to accept rent for the following month. If so, this creates a tenancy at will or month-to-month tenancy that either party may then terminate upon 30-days’ written notice.
Should the tenant fail to pay the rent on time, there is usually a grace period within which the tenant may pay. If the rent is still unpaid, you must give the tenant a 10-day Notice to Quit. If the entire rent is paid within this time, the tenant may remain. Do not accept a partial payment unless you specifically state in writing that the payment does not satisfy the tenant’s obligation and that eviction proceedings will still go forward or a court may interpret your acceptance of the partial rent as a satisfaction of the tenant’s rental obligation.
The same 10-day notice is required for any other lease violation. The landlord must allow the tenant to remedy the breach within the 10 days unless the breach pertains to criminal activity or the tenant has repeatedly caused a nuisance so that a cure of the breach is not available.
Exception for Military Duty
Under the Servicemembers’ Civil Relief Act, a tenant may break a lease so long as written notice of at least 30-days is given along with a copy of the deployment or service orders or a signed confirmation from the base commander or other authorized military officer.
Domestic Violence Exception
A tenant who is a victim of domestic violence or sexual assault or who is being stalked may vacate the leased unit before the expiration of the lease so long as an order of protection has been obtained and after giving 30-days’ notice. A landlord must also change the locks on the doors if the tenant under these circumstances requests it.
If the landlord fails to provide a tenant with a habitable residence, which means not providing heat, electricity or water or failing to repair a health or safety hazard, the tenant could elect to terminate the lease based on “constructive eviction.” This universally accepted rule or principle also applies to a landlord who tries to self-evict a tenant by changing the locks, continually entering the premises without notice, taking the tenant’s personal property or deliberately withholding services so that the tenant will leave voluntarily.
Should the tenant make a request to have certain repairs made that affect the tenant’s security, safety or health and the landlord fails to do so, the tenant may put the rent towards the repairs. There is no statute on this situation though the courts have permitted it so long as notice was given and the landlord failed to make the repairs after a reasonable time.
An Indiana residential lease agreement has many aspects to it that all landlords should become familiar with before having a tenant sign one. Make sure you understand your own obligations as well as those for your tenant so as to minimize misunderstandings and ensure a long lasting and profitable relationship.
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