Rental Terms and Definitions

The A to Z list of real estate terms for landlords and property managers

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Abandonment Notice

A notice of abandonment is a document that is used to notify a tenant that their tenancy has been terminated.

ACH Transfer

A bank-to-bank electronic payment through the Automated Clearing House network — the lowest-cost way to collect rent.

Affordable Housing

Affordable housing is a type of housing that is affordable to low-income families and includes both owned and rental housing.

Background Check

A review of criminal, eviction, and public records as part of screening. Use must comply with FCRA and fair housing rules.

Breaking a Lease

A tenant vacating before the lease term ends. Landlord remedies and the tenant’s liability for remaining rent vary heavily by state.

Built-ins

Items that are permanently attached to a dwelling or building are considered “built-ins” such as some appliances, cupboards, and shelving

Cap Rate

The term “cap rate,” short for capitalization rate, describes the rate of return on investment (ROI) that certain properties are expected to produce.

Capital Improvement

A capital improvement is any permanent alteration or improvement that is made to a property with the intent to raise its value.

Capitalization Rate (Cap Rate)

NOI divided by property value — the standard yardstick for comparing income property returns.

Cash Flow

Rental income minus operating expenses and debt service — what actually lands in the owner’s pocket each month.

Cash-on-Cash Return

Annual pre-tax cash flow divided by total cash invested — return measured against actual money in, not property value.

Certificate of Occupancy

A document that confirms the property you are purchasing does not have structural issues and is fit for human occupancy.

Credit Check

Pulling an applicant’s credit report to assess payment history and debt load. A soft pull does not affect the applicant’s score; a hard pull does.

Debt Service

The money that is required to cover the payment of interest and principal on a loan or other debt for a real estate property for a particular time period.

Depreciation

The annual non-cash deduction recovering a rental building’s cost over 27.5 years, reducing taxable rental income.

Duplex

A duplex is a multi-family home that has two units in the same building. These two units always share a common wall, but the floor plan can vary.

Emotional Support Animal (ESA)

An assistance animal that is not a pet under fair housing law — pet fees and most breed or weight limits cannot be applied.

Estoppel Certificate

A tenant-signed statement confirming lease terms, rent, and deposit — standard due diligence when a property is sold or financed.

Eviction

The legal process for removing a tenant for nonpayment or lease violation. Self-help lockouts are illegal in every state.

Fair Housing Act

Federal law barring discrimination in housing based on race, color, religion, sex, national origin, familial status, or disability.

Fixed-Term Lease

A lease that runs for a set period and binds both parties until it expires; neither side can terminate early without cause or penalty.

Grace Period

The window after the due date during which rent can be paid without a late fee. Set by lease or statute, commonly 3–5 days.

Gross Rent Multiplier (GRM)

Property price divided by gross annual rent — a fast screening ratio, less precise than cap rate.

Guarantor / Co-signer

A third party who accepts legal liability for the rent if the tenant defaults. Common with students and thin credit files.

Habitability

The landlord’s duty to keep the unit safe and livable — working heat, water, electrical, and structural integrity.

Illegal Landlord Actions

Prohibited conduct such as lockouts, utility shutoffs, unannounced entry, and retaliation against a tenant asserting legal rights.

Landlord-Tenant Law

The state and local statutes governing deposits, notice, entry, habitability, and eviction. Rules differ materially by jurisdiction.

Late Fee

A charge assessed when rent arrives after the due date. Amount and timing are often capped by state or local law.

Lease Addendum

A document attached to a lease that adds or clarifies terms (pets, smoking, parking) without rewriting the original agreement.

Lease Agreement

A legally binding contract between landlord and tenant setting out rent, term, deposits, and rules of occupancy. Usually fixed-term (e.g., 12 months).

Lease Renewal / Non-Renewal

Extending a lease past its original term, or notifying the tenant that it will not be extended. Non-renewal is not an eviction.

Lease Termination

Ending a lease before or at its natural end, usually via a written termination letter that documents the date and condition of return.

Maintenance Request

A tenant’s documented report of a repair need. A written policy in the lease sets response times and defines emergencies.

Market Rent

What comparable units in the same area currently command — the benchmark for pricing and for spotting below-market units.

Month-to-Month Tenancy

A tenancy that renews automatically each month and can be ended by either party with proper written notice (commonly 30 days).

Move-In Inspection

A documented, photographed record of the unit’s condition before occupancy — the baseline for any deposit deduction later.

Move-Out Inspection

The walkthrough at lease end comparing condition against the move-in record to determine chargeable damage.

Net Operating Income (NOI)

Gross rental income minus operating expenses, before mortgage payments and income tax.

Normal Wear and Tear

Deterioration from ordinary use (faded paint, worn carpet) that cannot be deducted from a security deposit.

Notice to Pay or Quit

The statutory notice giving a delinquent tenant a set number of days to pay or vacate before an eviction suit can be filed.

Notice to Vacate

Written notice from either party that the tenancy will end on a stated date — most commonly a 30-day notice.

Partial Payment

Accepting less than full rent. In many states this can reset or void a pending eviction notice — handle with care.

Pet Screening

Evaluating an applicant’s animal (breed, size, history, vaccination) and distinguishing pets from legally protected assistance animals.

Proof of Income

Documentation (pay stubs, tax returns, bank statements) verifying an applicant can afford the rent. A common target is rent ≤ 30% of gross income.

Prorated Rent

A partial month’s rent calculated for the actual days occupied, typically at move-in or move-out.

Quiet Enjoyment

The tenant’s implied right to use the property without unreasonable interference from the landlord or other tenants.

Quiet Hours

Lease-defined hours during which tenants must keep noise down — the practical enforcement tool behind quiet enjoyment.

Rent Concession

A discount or incentive (free month, reduced deposit) used to fill a unit without lowering the headline rent.

Rent Control / Rent Stabilization

Local regulation capping how much and how often rent may be raised, often paired with just-cause eviction rules.

Rent Increase Notice

Written notice of a rent change, delivered with the lead time required by state law and only at a lawful point in the tenancy.

Rent Ledger

A running per-tenant record of charges, payments, and balances. Essential evidence in a nonpayment eviction.

Rent Roll

A schedule of every unit, tenant, lease term, and rent amount — the core document lenders and buyers ask for.

Rent-to-Income Ratio

Monthly rent divided by the applicant’s gross monthly income — the standard affordability screen (often a 3x income rule).

Rental Agreement

Often used for a shorter, self-renewing tenancy (typically month-to-month) rather than a fixed term. The distinction matters for notice periods and rent increases.

Rental Application

The form a prospective tenant completes providing identity, employment, income, and rental history for screening.

Rental Inspection

A periodic walkthrough to verify condition and catch deferred maintenance. Requires advance notice in most states.

Renters Insurance

A tenant-held policy covering their belongings and personal liability. Landlords commonly require proof of coverage in the lease.

Roommate Agreement

A side agreement among co-tenants covering rent splits, chores, and guests. It does not override the lease with the landlord.

Section 8 / Housing Choice Voucher

A HUD program paying a portion of rent directly to participating landlords on behalf of qualifying low-income tenants.

Section 8 Housing

Section 8 Housing is a government program that allows low-income families to afford housing in the private market.

Security Deposit

Security deposits are refundable expenses used to protect landlords from financial loss from unpaid rent or property damage.

Squatter / Adverse Possession

An occupant with no legal right to the property. Removal typically requires a formal court process, not a lockout.

Subletting / Sublease

A tenant renting the unit to a third party while remaining liable under the original lease. Usually requires landlord consent.

Tenancy

A tenancy is a right granted to a tenant to temporarily occupy or possess real estate that belongs to a landlord, commonly under a lease.

Tenant Improvement

Tenant Improvements are modifications to a commercial space that are made specifically for a tenant. They’re not the same as Fitting Out.

Tenant Screening

Tenant screening is the process of screening potential tenants to determine if they are a good fit for your property.

Tenant Turnover

The cycle of a tenant leaving and a new one moving in — vacancy days, make-ready cost, and re-leasing expense.

Umbrella Insurance

Excess liability coverage sitting above landlord policy limits — protects owner assets against large claims.

Warranty Deed

A warranty deed is a legal document that transfers ownership of real property and protects buyers and sellers from title defects

Written Notice

Any formal, documented communication required by the lease or statute. Delivery method and timing determine whether it is legally valid.

Zestimate

A Rent Zestimate® (pronounced Zest-ti-met) is Zillow’s estimated monthly rent price, computed using a proprietary formula.