Alabama Rental Lease Agreements 101: The Definitive Guide

What Is an Alabama Rental Lease Agreement?

An Alabama Lease Agreement is a legally binding contract between a landlord or property owner and a tenant. It defines the terms, obligations, and rights of both parties when it comes to renting a residential or commercial property in Alabama. Typical aspects included in an Alabama Lease Agreement are the rental period, rent amount, payment due dates, consequences for late rent, property responsibilities , security deposits, and pet policies. It is a vital document that protects the interests of both the landlord and the tenant, reducing the possibility of misunderstandings during the term of the lease. A lease agreement is a complex legal document that comes with many implications under the Law. In Alabama, landlords and tenants are advised to seek legal assistance before signing any lease agreement.

Fundamental Components of a Lease Agreement

A foundational document in the landlord-tenant relationship is the lease agreement. Generally speaking, a lease agreement must contain the material elements of a contract to be legally enforceable under contract law. However, because a lease agreement serves the additional purpose of establishing the terms of a tenancy, there are a number of provisions which are desirable in a rental lease agreement that may not be required to form a legally enforceable contract.
In Alabama, a lease must identify the parties to the lease (who is leasing the property) and establish a description of the leased property. The description does not have to be meet a legal description requirement and can include the address of the property. The lease should specify the amount of rent due each month and when the payment of rent must be made to the landlord. A provision regarding the timely payment of rent and what might occur if rent is not paid timely should also be provided. Perhaps the most important provision in a lease agreement for any tenant is the proposed term of the rental agreement (how long the lease is in effect). If the lease does not specify a duration for the lease, the law will treat it as a month-to-month lease agreement. Often a lease will be drafted making it necessary for the tenant to provide notice to terminate the lease. For example, the lease may require that notice be provided to either terminate or not renew the lease at least thirty days prior to expiration of the term. Finally, the parties may wish to include any special provisions that apply to their agreement. Several examples of special provisions might include:

Mandatory Elements under Alabama Law

There are certain legal requirements that must be met by rental lease agreements under Alabama law. These requirements primarily address the specific disclosures that landlords must make to tenants. The goal of the following sections is to ensure tenants know their rights when it comes to leases.
Durability and Habitability
If a tenant’s lease agreement can last for longer than one year, Alabama law requires that it be rented "in writing and signed by the parties." If an oral lease is made without a lease agreement in writing, however, the lease is "presumed to be a tenancy at will" until it is put in writing and signed by the landlord and tenant.
Representations of the Landlord
In Alabama, a "holder of legal title" – i.e. the owner of the rental property – is presumed to "employ an agent for the purpose of making any representations relating to the property leased, no matter how remote or immediate," unless a different contract is in writing, signed, and delivered to the tenant. In other words, the rental property owner is legally required to make disclosures and representations to the tenant about the property before the tenant signs the lease. This presumption can only be negated by a signed written agreement between the landlord and tenant stating otherwise.
Implied Covenants
Covenants are promises made by one party to an agreement. Lease covenants made by the landlord to the tenant in Alabama include:
The implied covenant of bastion in Alabama applies to the public only, meaning that a tenant may not deny any part of a written lease merely because the term of the lease may have expired or the tenant seeks to terminate the lease.
Disclosure of Condition and Tenancy Terminability
All landlords in Alabama must inform their tenants in writing whether the rented premises have been inspected and are "qualified for continuous habitation by occupants of normal health and physical ability." This is known as the duty to disclose condition and terminability of tenancy.
Although the "failure to make a disclosure provided for" by Alabama law can result in significant monetary damages awarded to the tenant who suffers a housing denial (or discrimination), such damages are capped at only $2,000.

Overview of Fixed Term vs. Month-to-Month Rental Agreements

The most important aspect of leases is knowing which type of lease you have. In Alabama, there are roughly two types of leases. There is a fixed-term lease and a month-to-month lease. A fixed-term lease is a lease for a specific period of time. Your lease may be for 1 or 2 years or 3 years. However, once that period of time is lapsed, the lease is over and it will end by the passage of time without any further maneuvers on the tenant or landlord. A month-to-month lease is almost an informal lease. It’s generally a lease where rent is due on a monthly basis and can be terminated with at least 30 days’ notice. The exact requirements will depend on the facts and circumstances of the particular lease. For example, if you stayed in a unit for five months and both parties paid on a monthly basis, then you probably have a lease that is month-to-month. Assuming that is the case, both parties usually have the ability to terminate the lease with about 30 days’ notice. There are some variations to this but, generally, it’s 30 days’ notice.
One of the most common questions I get is which is better – a month-to-month lease or a fixed-term lease. It really depends on the parties’ needs but, from a landlord’s perspective, a fixed-term lease is better because once it is signed, tenancy is guaranteed for that period of time. The tenant cannot terminate it unless the lease permits him or her to do so. This prevents tenants from simply moving out if they decide that they don’t want to pay rent for the rest of the lease term.
From a tenant’s perspective, the benefit of a month-to-month lease is that it does not bind him or her to a long-term commitment. If the tenant decides that he or she does not want to pay rent, then he or she is free to do so and the tenancy will eventually end without further obligations or penalties upon the tenant. On the other hand, this provides the landlord with no security because he or she knows that the tenant can stop paying rent at any time.
One of the most common occurrences I see is a tenant moving in on a month-to-month basis and then, after a couple of months, the tenant signing a long-term lease. A landlord who is able to do this will probably be glad that he or she did.

Common Provisions in Alabama Rental Agreements

Alabama rental lease agreements often contain familiar clauses that tenants should be aware of before they sign. Although some agreements contain variations in language and details, the following are some of the most common clauses to be on the lookout for.
Security Deposit Policy
Lease agreements commonly address the security deposit. Lessors use a security deposit to protect against damage to the premises or unpaid rent.
Alabama law does not require lessors to collect a security deposit. However, many lessors decide to require security deposits because they are an easy way to ensure against possible future loss of income. This is especially true if the tenant is leaving too soon in the lease term.
Lessors must return security deposits according to the terms of the lease agreement. Many lessors will add provisions to the lease agreement describing how they will determine the condition of the property. This helps avoid disputes in the future.
Lessors may retain all or part of a security deposit for many reasons. Some of the common reasons for retaining all or part of a security deposit include: Because the penalties for failing to return security deposits can be steep, be sure to review the lease carefully regarding the return of the security deposit.
Repair and Maintenance Obligations
Most lessors/landlords place the responsibility for repairs and maintenance on the tenant. Many lessors expect the tenant to make necessary repairs, or at the very least to alert the lessor that a repair is needed .
Tenants should look for clauses concerning their obligations to: In addition, many times the landlord will have obligations to make repairs. Both parties should keep in mind that it is not always clear where the parties’ respective obligations start and end. For example, in Birmingham, an apartment in a triple decker catches fire, but the fire does not cause water, smoke or other damage to any of the other units. In that scenario, tenants in other two apartments may claim the lessor failed to maintain the premises by allowing the fire to occur.
Termination Conditions
Lessors and tenants can agree that either party can terminate the agreement based on certain conditions. Common termination conditions in lessor/tenant arrangements include: Some lessors and tenants draft lease agreements with termination conditions tailored to them and the property. If a condition is not met, then either or both parties may have the opportunity to terminate the agreement. For example, the lessor could terminate the agreement if the fair market value of the home drops below a certain level. The tenant could terminate the agreement if a new job is obtained requiring relocation to a new city.
A tenant should closely review the termination conditions of a lease. The termination conditions grant either the tenant or landlord the ability to end the agreement. Because either party could lose the most from a termination, negotiations surrounding the termination conditions of the lease are especially important.

Essential Steps to Preparing a Rental Lease Agreement

When deciding to draft a residential rental lease agreement, a landlord should always start with a form that is comprehensive and up to date. Commercial form leases are typically longer, more sophisticated and the drafting process will probably require the assistance of a lawyer. Residential lease forms are much simpler. There are many sources in the public domain for rental lease forms. It is important to consult a lawyer to help find and adjust a rental lease that complies with Alabama law.
When a rental lease is drafted for the first time, it is advisable to:
There are generally two types of lease agreements used by landlords:
The most common rental lease used in Alabama by residential or commercial landlords is the standard residential or commercial rental lease containing a lot of blanks for tenant information. These "form leases" should be completed carefully after being printed. Owners should be careful to look at the layout of the printed form to determine how all of the blanks will be filled in, if at all. For example, some printed forms have a column of blanks on the left and some only have spaces at the bottom. Some printed forms do not have blanks at all, and the landlord writes all of the information. It is advisable to have alterations reviewed by an experienced Alabama real-estate attorney before signing with the Tenant. Some types of forms allow the blank to be filled in on a separate sheet. Some require that both the lease and blank be written on the same sheet. The blank may be used for more detailed purposes such as for a "property description." Sometimes the property is described in words, and sometimes the address is written on the left side of the page.
When completing the blank form, the landlord must be sure to put his or her initials next to the handwritten additions to the printed form. Next, the landlord should review the terms written by the landlord to determine if there are any that are in violation of general principles in Alabama and to determine if the new terms are not against public policy or a statute. Of course, the process can be more complicated, and it is always better to have a lawyer do the drafting, but those who do the drafting will find that the most common mistakes are unresolved legal issues or failure to comply with a particular statute or common understanding by other parties. This often happens if the landlord makes many changes to the form.

Addressing Breaches & Disputes

In Alabama, disputes between landlords and tenants are not uncommon. Disagreements can arise over a number of issues which may or may not be addressed in a rental lease agreement. The first step to resolving a dispute is to have a clear understanding of the rental lease terms, as well as applicable Alabama landlord/tenant law. Some common problems include: Sometimes the problems that arise between landlords and tenants are deemed a breach of the agreement or lease. A breach of agreement is a failure to comply with either a legal obligation or the terms of a contract. When a party breaches the agreement, they are liable for damages even if they were neither negligent nor at fault. If a tenant owes rent and refuses to pay, the landlord can file a lawsuit in county court to recover fees. Both landlords and tenants can be held liable for breaches. Landlords may breach the agreement if: Tenants may breach the agreement if: Sometimes, a dispute between landlord and tenant can be resolved through negotiation. However, when negotiations are unsuccessful, the parties may need to seek a resolution through litigation. Parties may wish to obtain a ruling or interpretation from the Alabama local court system. Finally, parties have the option to use a mediator or arbitrator to resolve the conflict outside of court. If they choose this option, a neutral third party will work with both parties to come to an agreement. When a landlord or tenant does not agree with a ruling, they may have recourse through the local appeals process. In some localities, the appeals process may allow the aggrieved party to request a rehearing or hearing de novo on additional facts or for a change of judge. Once any and all appeals are exhausted, a final judgment comes into play. This judgment may then be enforced by the prevailing party. The amount of time the process can take will depend on a number of factors. Local laws vary, and the amount of the verdict and attorneys’ fees required to enforce the judgment may be a variable when the party seeks to enforce the agreement.

Landlord & Tenant Obligations

Both tenants and landlords have crucial responsibilities under a rental lease. From Alabama Residential Landlord and Tenant Act, Section 35-9A-301, the following duties can be listed:
Tenant to Maintain Dwelling Unit
(a) The tenant shall:

(1) Keep that part of the premises which he occupies and uses clean and safe;
(2) Dispose of all ashes, garbage, rubbish, and other waste in a clean and safe manner;
(3) Keep all plumbing fixtures and other facilities and appliances in a clean and sanitary condition and shall not obstruct or interfere with the using of those facilities and appliances by other tenants;
(4) Not destroy, deface, damage, or improperly remove any part of the premises or knowingly permit any person to do so;
(5) Conduct himself and require other persons on the premises with his consent to conduct themselves in a manner that will not disturb his neighbors’ peaceful enjoyment of their premises; and
(6) Comply with all applicable requirements of building and housing codes materially affecting health and safety.

(b) Nothing in this section authorizes a landlord to deprive the tenant of any rights, remedies, or defenses provided by law.
Landlord To Provide Fit Premises
The landlord shall at all times during the tenancy:

(1) Maintain the premises to be fit for human habitation;
(2) Keep all common areas of the premises in a clean and safe condition;
(3) Maintain all electrical, plumbing, sanitary, heating, ventilating, air-conditioning, and other facilities and appliances, including elevators, if any, in good and safe working order;
(4) Maintain locks or bolt for all exterior doors and window hasps or similar devices for all windows that are easily accessible from the outside;
(5) Except where preempted by federal law, provide and maintain appropriate receptacles for the removal of ashes, garbage, rubbish, and other waste in the dwelling unit and exterior areas not held out for public use;
(6) Supply running water, reasonable amounts of hot water at all times, and reasonable heat for all parts of the premises supplied by the facilities of the landlord, except for cooling between the first day of June and the first day of September each year , unless the rental agreement provides for the furnishing of cold water or heating or cooling.

(1) Not deny the tenant access to his dwelling unit during reasonable hours for ordinary purposes;
(2) Permit the tenant peaceable and quiet enjoyment of the premises, free from a nuisance;
(3) Use reasonable care to maintain in a structurally sound condition the premises which he owns or controls and which he makes available to the tenant for residential use, including all facilities available to the tenant from the landlord, all entrances and exits thereto, and all common areas, and including the dormitory room itself, if any;
(4) Maintain provided locks and latches in good and safe working condition and unaltered;
(5) Maintain the structural components of the dwelling unit, exterior areas, and common areas under his control, including walkways, parking lots, stairs, railings and ramps, in a safe and reasonably secure condition;
(6) Provide window coverings for all windows and doors that are not opaque or that are transparent and expose the interior of the premises to public view, unless the tenant is provided a reasonable period of time within which to provide such coverings.

Termination for Failure to Comply
(a) The tenant shall not agree to forego his obligations under Section 35-9A-201. However, notwithstanding a tenant’s agreement to forego such obligations, if he fails to comply with any of his duties under Section 35-9A-201 which materially affects health and safety, the landlord may give him written notice setting forth such breach and that this rental agreement shall terminate upon a date not less than seven days after receipt of the notice by the tenant, unless the tenant corrects the breach within that period of time.
(b) If there is a noncompliance of the character described in Section 35-9A-301(a), materially affecting health and safety, the tenant may deliver written notice to the landlord specifying the breach and that this rental agreement shall terminate upon a date not less than seven days after delivery of the notice by the tenant.