The Top 10 Lease Terms You Should Have When Renting
A rental or lease agreement is the foundation of the landlord-tenant relationship. Whether you are contemplating a commercial lease or a residential lease, specific terms should be in every written lease you create or sign. These terms help protect the landlord/property owner and the new tenant.
This article outlines the top 10 lease terms you should include in a rental agreement. This list is not a substitute for legal advice.
Ensure the lease identifies the lessee (tenant) and the lessor (landlord). Identify every adult, including roommates, living in the rental unit on the lease. Getting every tenant's signature makes each tenant fully responsible for the lease terms. This means you can collect the total rent due from any of the renters and terminate the entire lease if one of the tenants violates the material terms of the lease.
2. Amount of Rent
Spell out the exact amount of rent due each month.
- Acceptable forms of payment
- Where to send rent payments
- Whether any grace period exists
- Any fees for late payments
- Any rent increases (for example, rent may increase after a year if the tenant goes to a month-to-month lease)
- If the property has rent control
3. Lease Terms
The proper real estate terminology depends on the state and local laws, but generally:
- Rental agreements are usually short-term or month-to-month
- A standard lease is for more extended periods (six months or one year)
Be specific about the period. Without a specified lease period, state common law defines the lease agreement. The lease should have a definite end date or a deadline for the renter to renew the lease.
4. Deposits and Late Fees
Security deposits and extra fees are two commonly disputed items between landlords/property managers and tenants.
In addition to defining the amount of the deposit, also include:
- Any nonrefundable fees (such as cleaning fees)
- Procedures for returning the deposit after move-out
- What constitutes normal wear and tear vs. real damage
- Penalties for unpaid rent
State laws govern security deposits. State laws also define maximum amounts and time periods for returning the deposit. Security deposits are often equal to one month's rent.
5. Right to Entry
Identify when and under what conditions the landlord can enter the tenant's rental unit. Be sure your lease terms comply with state law. Most state laws require proper written notice at least one day in advance.
6. Maintenance and Repairs
Both the landlord and the tenant have responsibilities to maintain the premises. Spell out the obligations of both parties. Tenants typically have a duty to:
- Keep the premises clean
- Repair any damage caused by neglect or abuse
Landlords usually have a responsibility to:
- Maintain a livable property throughout the tenancy
- Complete necessary repairs to damage not caused by the tenant (such as repairing a leaky roof or fixing a heater)
In the lease, you should clarify that the tenant must contact the landlord for repairs as soon as they become aware of a problem. The tenant should have contact information to ensure timely completion of repairs.
7. Occupancy Limits
Ensure that your agreement specifies whether the tenant can sublease the property. If not, tenants can sublet without permission. But with the proper terms in place, subletting without permission gives the landlord grounds to terminate the agreement before the end of the lease.
8. Pet Policy
Specify whether the property allows pets. If so, carefully spell out the following:
- The number of pets allowed in each rental unit
- Prohibited breeds, if any
- The tenant's responsibility to keep both the rental and surrounding areas clean
- Procedures for dealing with any other animal-related issues, such as noise complaints from neighbors
9. Disruptive and Illegal Behavior
Restrict specific disruptive and illegal activity from your tenants. If you don't, your other tenants may have justifiable grounds for terminating their agreements based on that tenant's offensive behavior. To prevent this, spell out all unacceptable behavior, such as:
- Excessive noise
- Large parties or pool parties
- Drug dealing
- Underage drinking
Ensure prospective tenants know of these prohibited actions and that they are grounds for lease termination and eviction.
10. Miscellaneous Terms and Restrictions
State law will define many other terms to include in a lease or rental agreement. These include:
- Early termination policies
- Subletting rights
- Flood and chemical disclosures
- Anti-discrimination notices
- Use of common areas
- Move-in date
- Whether tenants can run a business from the property
Landlord-tenant laws can be complex. You can use a template to draft different types of leases, but an experienced landlord-tenant attorney can help you understand your legal rights. They can also prepare a written agreement that does not infringe on tenant rights. Contact a landlord-tenant attorney who can help you carefully draft your lease agreement and protect your rental property.
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