Can the agreement be signed electronically?

Yes. Electronic signatures are legally valid under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided intent, consent, attribution, and retention are documented.

Is a separate consumer disclosure required?

For consumer-facing transactions include the ESIGN-required disclosure showing a right to paper records, methods to withdraw consent, and demonstrating the consumer can access electronic records (15 U.S.C. §7001(c)).

How can a tenant revoke authorization?

Specify a clear revocation method and notice period in the agreement. Also advise tenants to notify their bank and the payee to prevent future debits.

What happens if a bank rejects a debit?

Follow your stated retry and fee policy, notify the tenant promptly, and retain records of attempts; returns and NSF occurrences can trigger additional handling or termination under the agreement.

Are notarization or witnesses usually required?

Not typically for PAD authorizations, but certain states or specific lease forms may require notarization or witnesses—verify state rules before execution.

How long should I keep signed agreements?

Retain the signed authorization for the lease term plus several years; follow federal and state retention rules such as IRC §6501(a) for tax records and 45 CFR §164.530(j) where HIPAA applies.

Lease PAD Agreement

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LEASE PRE-AUTHORIZED DEBIT (PAD) AGREEMENT

This Lease Pre-Authorized Debit Agreement (the Agreement) establishes the terms under which the Landlord or Landlord's Agent is authorized to collect recurring rent payments and other charges from the Tenant's designated bank account by pre-authorized debit. Property:

Property Identification

Full Property Address Parcel / APN Number Legal Description

Parties

Landlord / Lessor Name Landlord Contact Address Tenant Name Tenant Contact Address

Payment Authorization Details

Tenant authorizes the Landlord to debit the Tenant's bank account for Rent and other charges as specified in the lease. Monthly Rent Amount: $ . Start Date of PAD: .

Payment Frequency (select one)

Monthly Twice Monthly Weekly Other:

Debit Day: the Landlord will debit the account on day of each payment period. If the scheduled day falls on a non-banking day, debit may occur on the next banking day.

Bank Account Information

Account Holder Name Financial Institution Name

Branch / Transit Number

Institution Number

Account Number

Account Type: Chequing Savings

Authorization and Consent

By signing below the Tenant irrevocably authorizes the Landlord and the Landlord's financial agent to debit the specified account for rent, late fees, utilities or other amounts due under the Lease. This authorization remains in effect until revoked in writing by the Tenant in accordance with the Revocation and Cancellation provisions herein.

Tenant Certification (check to confirm)

I certify that I am an authorized account holder and that I grant the Landlord the authorization to debit the account as set out in this Agreement.

Revocation, Cancellation, and Notice

The Tenant may revoke this authorization at any time by providing written notice to the Landlord at the contact address shown above at least 10 business days prior to the next scheduled debit. Revocation does not affect debits processed prior to the Landlord's receipt of notice. The Landlord may cancel or suspend PAD privileges upon three business days' written notice where there is suspected fraud, repeated non-sufficient funds events, or breach of lease.

Non-Sufficient Funds and Fees

If a debit is returned for non-sufficient funds (NSF), the Tenant agrees that the Landlord may re-submit the debit and may charge an NSF administration fee in the amount of $ and interest or other charges as allowed under the Lease and applicable law.

Privacy, Records, and Liability

The Landlord will keep records of PAD transactions and make them available to the Tenant upon request. The Tenant consents to the collection, use and disclosure of banking and contact information for the purposes of administering the PAD. Except for gross negligence or willful misconduct, the Landlord is not liable for indirect or consequential losses related to PAD processing delays caused by financial institutions.

Default, Termination and Remedies

Failure to maintain an account with sufficient funds or to provide current, correct banking information shall constitute a default under this Agreement and the Lease. The Landlord may terminate PAD privileges and pursue any remedy available under the Lease or at law, including acceleration of rent and collection of costs.

Governing Law and Entire Agreement

This Agreement is governed by the laws of the jurisdiction where the Property is located. This Agreement, together with the Lease, constitutes the entire agreement between the parties with respect to pre-authorized debits and supersedes all prior agreements, representations or understandings, whether written or oral.

Governing Jurisdiction (State/Province)

Acknowledgement

The Tenant acknowledges receipt of a copy of this Agreement and understands the rights and obligations contained herein, including the right to revoke the authorization by written notice as specified.

Signatures

Landlord Name:

By:

Date:

Tenant Name:

By:

Date:

What the Lease PAD Agreement Is and why it matters

The Lease PAD Agreement is a written authorization that lets a landlord or property manager initiate Pre-Authorized Debits (PAD/ACH) from a tenant's bank account for rent and related charges. It records payer and payee identities, bank routing and account numbers, agreed debit amounts or calculation methods, payment frequency, effective date, and the tenant's consent to electronic processing. In U.S. practice this agreement documents authorization needed for automated collections and supports compliance with electronic signature and payment rules under federal ESIGN law and applicable state UETA or ESRA provisions.

Why use a formal Lease PAD Agreement

A clear Lease PAD Agreement reduces missed payments and disputes by documenting tenant consent and payment mechanics. It standardizes bank details, timing, and cancellation terms, and helps landlords meet electronic-consent requirements under 15 U.S.C. ch. 96 (ESIGN) and applicable state law.

Who commonly completes a Lease PAD Agreement

Typical users include landlords, property managers, and third-party payment teams that handle recurring rent collection electronically.

Independent landlords managing a small rental portfolio and wanting predictable cash flow.
Property management firms processing recurring rent and fees for multiple properties.
Third-party payment processors or accounting teams onboarding tenants for automated ACH debits.

Tenants complete the authorization; property owners or authorized managers retain the signed record to support withdrawals and dispute responses.

Core elements to include in a professional Lease PAD Agreement

A complete agreement clearly assigns responsibility, specifies bank credentials and payment cadence, and describes cancellation and dispute-handling procedures to minimize ambiguity and regulatory exposure.

Authorization

Explicit language where the tenant authorizes recurring debits from a specified account, including signature, printed name, and date to demonstrate intent and attribution.

Payment Schedule

Clear statement of amount or calculation method, due dates or trigger events, frequency (monthly, prorated, or variable), and initial effective date for withdrawals.

Bank Details

Routing and account numbers, account type (checking/savings), and an explicit instruction to notify the payee of account changes to avoid returned items.

Adjustments & Fees

How late fees, NSF charges, prorations, and rent increases are applied to debits, including any maximum fee caps and notification requirements.

Revocation & Cancellation

Process for tenant to revoke consent, required notice period, and the effect of revocation on future debits and outstanding balances.

Disputes & Records

How disputed debits are handled, where to send notices, and retention of transaction records and audit trails for compliance and customer inquiries.

Security, privacy, and compliance checkpoints

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest

Audit Trail: Detailed signing timestamps and IP logs

HIPAA Support: BAA available where required

ESIGN / UETA: Meets ESIGN and UETA standards

Access Controls: Role-based permissions and SSO

File Formats: PDF, DOCX, and downloadable audit reports

Primary risks and potential penalties to watch for

Returned Items: Bank NSF fees

Unauthorized Debits: Consumer chargebacks

Regulatory Fines: State consumer protection penalties

Contract Disputes: Tenant claims and litigation risk

Data Breach: Notification and remediation costs

Record Gaps: Weakened defense in disputes

Common preparation errors to avoid

Entering incorrect ABA routing or account numbers, which leads to returned transactions and additional fees for both parties.
Failing to include a clear consumer disclosure about electronic consent as required by ESIGN 15 U.S.C. §7001(c), which can invalidate the electronic authorization.
Using vague debit descriptions (for example, 'monthly charge') instead of linking debits to specific lease terms, causing tenant disputes and reconciliation issues.
Not documenting revocation or cancellation procedures — unclear processes increase liability when tenants request stop-payments or chargebacks.

Step-by-step: how to complete a Lease PAD Agreement

Follow these core steps to gather information, obtain consent, and archive a signed authorization for recurring ACH withdrawals.

01

Gather information: Collect tenant name, routing number, account number, and account type.
02

Draft authorization: Specify amounts, frequency, effective date, and revocation method.
03

Obtain signature: Get tenant signature and date, in person or via eSignature.
04

Store record: Retain signed copy and transaction audit trail securely.

Configuring an online PAD workflow

Set up authentication, notifications, and retry rules so electronic authorization and payments flow reliably.

Field	Configuration
Authentication Method	Email link or SMS code for signer verification
Payment Method	ACH debit via stored bank account
Notification	Automated email receipts and debit notices
Retry Rules	Number of retry attempts and interval

How the electronic PAD process typically flows

This overview shows the common sequence from authorization to completed transaction and recordkeeping.

Prepare document: Populate agreement with tenant and bank details.
Request signature: Send for eSignature or obtain physical signature.
Initiate debit: Submit ACH debit per agreed schedule.
Record transaction: Store signed agreement and audit trail securely.

Technical and platform considerations for digital completion

Choose a platform that supports secure eSignatures, audit trails, and the file formats you need.

Integrations: CRM and accounting system connectors
File support: PDF and DOCX signing
Security: AES-256 storage and TLS transport

eSignature pricing and feature comparison for Lease PAD workflows

Compare baseline pricing and essential features for common eSignature vendors; signNow is listed first for vendor parity in comparisons.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial, no credit card required	No	No	Yes, limited	Yes, limited
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently asked questions about Lease PAD Agreements

Answers to common questions about electronic authorization, signature validity, revocation, and recordkeeping when using a Lease PAD Agreement.

Need help? Contact support

Can the agreement be signed electronically?
Yes. Electronic signatures are legally valid under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided intent, consent, attribution, and retention are documented.
Is a separate consumer disclosure required?
For consumer-facing transactions include the ESIGN-required disclosure showing a right to paper records, methods to withdraw consent, and demonstrating the consumer can access electronic records (15 U.S.C. §7001(c)).
How can a tenant revoke authorization?
Specify a clear revocation method and notice period in the agreement. Also advise tenants to notify their bank and the payee to prevent future debits.
What happens if a bank rejects a debit?
Follow your stated retry and fee policy, notify the tenant promptly, and retain records of attempts; returns and NSF occurrences can trigger additional handling or termination under the agreement.
Are notarization or witnesses usually required?
Not typically for PAD authorizations, but certain states or specific lease forms may require notarization or witnesses—verify state rules before execution.
How long should I keep signed agreements?
Retain the signed authorization for the lease term plus several years; follow federal and state retention rules such as IRC §6501(a) for tax records and 45 CFR §164.530(j) where HIPAA applies.

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