Agreement To Execute Lease & Deposit Receipt
Agreement to Execute Lease & Deposit Receipt
Dated: __________
The LANDLORD, _____________ and ______________, the TENANT agree:
In consideration of a deposit of $ ______ (___________ &___/100 dollars) which shall be credited toward the first month’s rent under a certain lease described below, and receipt of which is hereby acknowledged, the parties mutually agree as follows:
The parties shall make, sign, execute and deliver a certain lease for the subject premises which is more particularly described as:
____________________________________________________________
The execution and delivery of the lease shall take place on:
___________________The LANDLORD shall prepare the lease, which shall contain the usual and customary clauses within the community.
In the event of the TENANT’s failure to execute the lease, the parties agree that the exact amount of damages to be suffered by the LANDLORD are difficult to fix, and that upon a breach by the TENANT, the LANDLORD shall be entitled to the deposit made as liquidated damages, and not as a penalty.
__________________________________
For LANDLORD
_________________________________
For TENANTAgreement to Execute Lease & Deposit Receipt
Review ListThis review list is provided to inform you about this document in question and assist you in its preparation. This is a friendly agreement intended between the parties to memorialize the meeting of the mind on a lease agreement and receipt of a deposit.
1. Make multiple copies. Keep one in the transaction file.
Frequently Asked Questions
What is an Agreement to Execute Lease & Deposit Receipt?
An Agreement to Execute Lease & Deposit Receipt is a document in which a landlord and tenant agree to enter into a formal lease at a later date. The tenant provides a deposit that will be credited toward the first month's rent under the lease. The agreement outlines the premises, the execution date, and the consequences of failing to sign the lease.
What does the deposit cover in this agreement?
The deposit is credited toward the first month's rent under the lease described in the agreement. The receipt of the deposit is acknowledged by the parties. It is not a separate fee but an advance payment of rent.
What happens if the tenant fails to execute the lease?
If the tenant fails to execute the lease, the landlord is entitled to keep the deposit as liquidated damages. The agreement states that the exact amount of damages would be difficult to fix, so the deposit serves as agreed-upon compensation. It is not considered a penalty.
Who prepares the lease in this agreement?
The landlord is responsible for preparing the lease. The lease must contain the usual and customary clauses within the community. The tenant agrees to sign the lease as prepared by the landlord.
When should the lease be executed?
The lease should be executed on the date specified in the agreement. That date is left blank in the template and must be filled in by the parties. The agreement requires the parties to make, sign, execute, and deliver the lease on that date.
Is the deposit refundable if the tenant decides not to sign the lease?
No, if the tenant fails to execute the lease, the deposit is forfeited to the landlord as liquidated damages. The agreement explicitly states that the landlord shall be entitled to the deposit upon the tenant's breach. There is no provision for refund in that situation.
What information must be included in the agreement?
The agreement must include the date, the names of the landlord and tenant, the deposit amount, a description of the premises, and the date for lease execution. It also includes signature lines for both parties. The lease itself is prepared separately by the landlord.
What does 'liquidated damages' mean in this context?
In this context, liquidated damages refer to the deposit amount that the landlord is entitled to keep if the tenant breaches the agreement by not executing the lease. The parties agree that actual damages would be difficult to determine, so the deposit serves as a pre-estimated sum. It is explicitly not a penalty.
Can the tenant get the deposit back if the landlord fails to prepare the lease?
The agreement does not address the landlord's failure to prepare the lease. It only specifies that the landlord shall prepare the lease and that the tenant forfeits the deposit upon the tenant's failure to execute. Therefore, no provision is made for a refund in that scenario.
Is this agreement legally binding?
Yes, once signed by both parties, this agreement is a legally binding contract. It obligates the parties to execute a formal lease on the specified date. The deposit serves as consideration for the agreement.
