The 10+1 most important points of a residential lease greement – A Guide for Tenants and Landlords

Our article does not constitute legal advice and is intended for informational purposes only. For signing a residential lease agreement, we recommend consulting a lawyer.

This article is aimed at participants in the Budapest rental market and presents the 10 most important elements of a residential lease agreement: identifying the rental property, rent amount, security deposit, contract duration, utility costs, house rules, maintenance and repair obligations, termination conditions, handover protocol, and dispute resolution. These elements help ensure smooth day-to-day cooperation and prevent conflicts.

Professional assistance for this article was provided by Dr. Gábor Szabó, lawyer (szglegal.hu).

Why a detailed lease agreement is important

The Budapest rental market is constantly changing (Otthon Start program, Airbnb regulation), but a general truth remains: a well-prepared, detailed lease agreement can save you from many unnecessary problems and disputes. Beyond being a legal document, the agreement serves as a framework that essentially defines the daily relationship between the tenant and the landlord.

Whether you are looking for a secure long-term home as a tenant or want to ensure your property is in good hands as a landlord, the content of the lease agreement is crucial to prevent future disputes and to resolve them quickly if they arise.

With 10 years of experience in property management, we highlight the key points

With experience managing over a thousand rental properties, we present the 10 essential points that should never be omitted from a lease agreement. Our goal is to show both tenants and landlords why each clause is important, how it serves the interests of both parties, and how it prevents potential disputes.

1. Accurately identifying the rental property – the lease agreement’s compass

Accurately identifying the rental property is essential for both parties.

The agreement should include:

• the owner’s personal details,
• the precise address,
• property registration number,
• floor area,
• floor level,
• and a brief description of its technical condition.

In case of a dispute, a misidentified property can fundamentally change the circumstances of the conflict.

For landlords, specify property details as precisely as possible

Especially in Budapest, where multiple nearly identical apartments can exist in a single building, detailed records are essential.

The agreement should not only include the address and floor, but also:

• the apartment door number,
• associated storage,
• garage,
• or parking space designation.

The more precisely the property and its included items are described, the lower the risk of potential problems.

For tenants, verify details with the property registry

Using the property registry, tenants can ensure they are renting the apartment they selected. The property registry is an official document, and its details must be accepted as accurate unless proven otherwise. It is advisable to attach the registry as an appendix to the agreement or request it from the landlord via email.

2. Rent and payment method – financial planning for long-term rentals

Disputes over rent are among the most common between tenants and landlords. The agreement should clearly state the rent amount, payment method, due date, and consequences of late payment. It is recommended to define what counts as late payment and how potential disputes will be handled so that both parties are aware of their obligations.

For landlords, plan ahead for rent increases

In long-term rental agreements, the rent can lose value over the years (e.g., changes in Budapest’s real estate market due to Airbnb regulation). To avoid this, it is useful to predefine how rent increases will be applied—for example, tied to inflation or a specific index. This makes the terms transparent and predictable and provides security for both tenant and landlord.

For tenants, always keep proof of rent payments

Along with regular payments, it is equally important that the tenant can prove the payment. Bank transfers and corresponding receipts are the safest method, but in case of cash payments, a written acknowledgment of receipt is essential. This careful approach makes resolving potential disputes easier. Always request a receipt specifying who received it, from whom, when, how much, and for what purpose.

3. Security deposit and conditions – a safety net in the lease agreement

The security deposit is an important guarantee for both landlord and tenant. The lease agreement should include its amount, payment date, management method, and conditions for refund. Clearly defining the amount and usage conditions makes the agreement transparent and secure for both parties.

For landlords, the deposit provides financial security

The deposit is one of the landlord’s main guarantees, covering unpaid rent or possible damages. Typically, two to three months’ rent is set, though both parties can agree on a different amount. This allows for smaller or larger deposits as needed.

For tenants, document the property condition with photos

Photos and videos taken before moving in serve as strong evidence of the apartment’s condition. This prevents tenants from being held responsible for pre-existing damage. Documenting the property protects against disputes, ensures legal security for tenants, and makes deposit accounting transparent. It is recommended to share these files with the landlord on the move-in day, via email or another electronic method.

4. Lease duration – stability or flexibility in a rental agreement

The structure of the lease agreement fundamentally defines the position of both landlord and tenant, as this section addresses the stability, flexibility, and termination options of the rental.

The agreement should include:

• the start and end dates,
• whether the agreement is for a fixed or indefinite term,
• the conditions for termination,
• the notice period,
• as well as any potential renewal options.

In many cases, it is practical if the parties enter into a fixed-term contract that automatically converts to an indefinite term after expiration. This arrangement provides initial security and greater flexibility later, making it beneficial for both parties.

For landlords, consider the option to extend

A fixed-term agreement ensures predictable income and stability. However, it is recommended to specify in the contract whether the lease can be extended or converted to an indefinite term after expiration. This provides flexibility while avoiding the risk that the property remains vacant for an extended period.

For tenants, assess the costs of early exit

An indefinite agreement offers the advantage of a shorter, typically 30-day notice period, allowing greater freedom. A fixed-term contract, on the other hand, provides long-term security but generally cannot be terminated early, which can result in significant costs for early termination. Therefore, tenants should be aware of the termination conditions and consequences in advance.

5. Utility bills and other costs – the financial basis of property management

It is recommended that the agreement clearly specifies which costs are borne by which party, including shared maintenance fees, utility bills (water, electricity, gas), internet and television subscriptions, and other regular property-related expenses. Detailed regulation helps prevent disputes and facilitates financial planning for both parties.

For landlords, pay the utility bills yourself

If the landlord handles the utility payments, it avoids the risk that services are disconnected if the tenant fails to pay, which could result in reconnection fees or penalties for the landlord.

For tenants, monitor consumption and request detailed billing

Tenants should regularly monitor consumption and request detailed statements of utility and shared costs. This ensures that tenants only pay for services they actually use and prevents disputes due to overpayment or billing errors.

6. Property usage rules in the lease agreement

The lease agreement should clearly define permitted uses of the rental property. It is important to clarify whether the property is for residential purposes only, whether office or other activities are allowed, and to set rules for permanent residence, smoking, pets, or subletting. Clear rules help prevent misunderstandings and ensure expectations are aligned for both tenant and landlord.

For landlords, clearly define property usage rules

Landlords should specify which activities are allowed or prohibited. For example, smoking or short-term rentals should be explicitly forbidden in the agreement. This protects the property, reduces potential conflicts, and provides clear guidance to the tenant.

For tenants, accept rules you can follow long-term

Tenants should consider whether the usage rules align with their lifestyle before signing the lease. For instance, if a tenant has a pet, they should confirm that it is permitted under the agreement.

7. Maintenance and repair obligations – rely on property management support

Maintaining the property is in the shared interest of both parties, but disputes often arise over which repairs and maintenance tasks are the responsibility of which party. The lease agreement should clearly define who is responsible for each type of issue and within what timeframe tasks must be completed. Both tenants and landlords can rely on the experienced Homever property management team for handling these tasks.

For landlords, define maintenance and repair obligations in detail

Landlords should specify which types of repairs are their responsibility and which belong to the tenant. For example, if the boiler breaks or the roof leaks, it should be clear that it is the landlord’s responsibility. This ensures timely repairs and preserves the property’s long-term value.

For tenants, document and report issues in writing or by email

This fulfills the tenant’s cooperation obligations and provides proof of when issues were reported. Tenants should report all problems immediately in writing (e.g., by email) and, if possible, include photographs. This demonstrates that the tenant did not delay reporting and prevents them from being charged for costs that are the landlord’s responsibility.

8. Termination conditions in the lease agreement

Termination rules fundamentally determine the security and flexibility of the lease. The lease should briefly clarify when and how the contract can be terminated, as well as when extraordinary termination applies, such as immediate termination in case of unpaid rent.

For landlords, clearly define termination conditions for safe property use

Landlords should clearly record the contract duration, normal and extraordinary termination conditions, and deadlines in the agreement to avoid disputes and safeguard the property’s profitability. For example, if a tenant leaves the property early without justification during a fixed-term contract.

For tenants, accept termination rules that offer flexibility and protect your rights

9. Handover Protocol as an Annex to the Lease Agreement

When handing over or returning a property, always prepare a detailed handover protocol that includes:

• the condition of the property,
• a list of furnishings,
• the number of keys (or gate openers) provided,
• and the meter readings.

This helps prevent potential disputes later.

For landlords: prepare a detailed protocol to document the property’s condition

Landlords should document every detail, supplemented with photos and videos, to clearly show the property’s condition at handover and the included furnishings. This minimizes disputes at the end of the lease period.

For tenants: check the property and request minor repairs before moving in

Tenants should thoroughly inspect the property before moving in and report minor issues, such as dripping taps or faulty sockets, in writing to the landlord. This ensures no disputes arise during the lease period and avoids unexpected costs.

Tenants are also entitled to review the property’s energy certificate and the electrical safety inspection report. These documents provide important information on the property’s technical condition and energy usage.

10. Dispute Resolution in the Lease Agreement and Notarized Move-Out Declaration

Defining how disputes are handled in the lease agreement is crucial, as it clearly shows how legal issues can be resolved. It is generally recommended to always seek an amicable resolution and avoid litigation.

For landlords: clearly outline dispute resolution steps for peaceful resolution

Landlords benefit from clearly defining the order of steps in case of disputes: first written notice, then mediation, and only as a last resort, court proceedings. This allows problems to be resolved calmly, with less stress and lower costs.

For tenants: document problems in writing for legal protection and transparency

Tenants are advised to record all disputes in detail, for example via email or a clear written protocol. This provides legal protection and ensures issues are managed transparently and systematically, promoting peaceful and effective resolution.

10+1. Move-Out Declaration – the Lease Agreement’s Final Safeguard

The move-out declaration serves the interests of both parties. The tenant must sign this document in front of a notary, declaring in writing that in specific cases they will voluntarily leave the property without further claims. The move-out declaration is a public document and immediately enforceable, allowing eviction without court proceedings in most cases. This is also advantageous for the tenant, as it clearly defines the conditions under which they must vacate the property.

Professional Property Management – Security for Both Parties

A professional property management service in Budapest can greatly assist both landlords and tenants. Landlords do not have to handle rent collection, documentation, or property maintenance and servicing, while tenants receive quick and predictable support. Homever property managers respond immediately to tenant questions or issues. We relieve landlords of the burdens of renting and provide tenants with faster and more effective solutions, e.g., in case of technical problems.

Summary of the Lease Agreement

The table below summarizes the 10 key points of a lease agreement. Feel free to download or print it to use as a checklist during the contract signing process!

Contract Point	Brief Description	Landlord Perspective	Tenant Perspective
1. Property Identification	Exact property details: address, registry number, floor area, level, technical condition	Record all property parameters and accessories in detail	Check the title deed, attach as annex
2. Rent and Payment Method	Amount, due date, payment method, consequences of late payment	Plan rent increases in advance, e.g., tied to inflation	Ensure proof of payment (transfer, receipt)
3. Security Deposit	Amount, payment date, management, refund conditions	Provides security for unpaid rent or damages	Document property condition with photos/videos
4. Lease Duration	Start/end date, fixed/indefinite term, termination, renewal	Specify possibility of extension or conversion to indefinite term	Assess exit costs and conditions
5. Utilities and Other Costs	Which costs are borne by which party (water, electricity, gas, internet, maintenance fee)	Pay bills to avoid service interruptions	Check consumption, request detailed statements
6. Property Usage Rules	Permitted use: residence, office, pets, smoking, subletting	Define allowed and prohibited activities	Accept only rules that can be followed
7. Maintenance and Repairs	Responsibility for issues, deadlines, property manager involvement	Define responsibilities in detail	Report issues in writing, take photos
8. Termination Conditions	When/how the lease can be terminated, extraordinary cases	Clearly define termination conditions	Accept flexible rules that protect rights
9. Handover Protocol	Document property condition, furnishings, meter readings	Prepare detailed protocol with photos/videos	Check condition, request minor repairs
10. Dispute Resolution	How disputes are handled: negotiation, written notice, mediation, court	Define steps clearly and simply	Document issues in writing for legal protection

The 10 points provide guidance for preparing a safe and balanced lease agreement. Landlords can protect their property, ensure long-term rental stability, and minimize the risk of disputes. Tenants can enjoy a peaceful and predictable living experience.