The Top 10 Lease Terms Landlords Should Include in a Lease

A rental or lease agreement is the foundation of the landlord-tenant relationship. Whether you are considering a commercial or residential lease, every written lease you create or sign should include specific terms. These terms help protect the property owner and the new tenant.

This article outlines the top 10 lease terms landlords and rental property owners should include in a rental agreement. Knowing these important terms can protect your rental income, minimize liability, and help you run a profitable business. 

Successful landlords often have professional legal help on their side. Whether it’s reviewing contracts and leases, advising on rent amounts, or navigating evictions, an experienced attorney can be a valuable asset to your real estate investment business.

1. Names

Ensure the lease identifies the lessee (tenant) and the lessor (landlord). Identify every adult, including roommates, living in the rental unit on the lease. Having every tenant sign makes each tenant fully responsible for the lease terms. This means you can collect the full rent from any tenant and terminate the entire lease if one tenant violates a material term.

2. Amount of Rent

Spell out the exact amount of rent due each month.

Include:

• 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

Owning a rental property is your business, and you rely on rental income to cover your expenses and turn a profit. A small business attorney can help you determine appropriate rents, navigate state and local laws, and stay profitable. Find local legal help.

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. Include the landlord’s contact information to ensure repairs are completed promptly.

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
• Whether you require pet rent or an additional pet deposit

9. Disruptive and Illegal Behavior

Restrict specific disruptive and illegal activity from your tenants. If you don’t, other tenants may have justifiable grounds to terminate 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.

An eviction gone wrong can harm your business and your bottom line. Evicting a tenant is a legal process that must be done carefully and correctly to avoid liability and other legal issues. Find local legal help.

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

Before You Sign a Lease: Get Legal Help

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.

FindLaw’s directory of landlord-tenant lawyers can connect you with qualified legal help near you. Because state law is relevant, your attorney should be licensed in the state where the rental unit is. Enter your city or ZIP code for a list of legal professionals in your area. Your search results will also show important details about prospective attorneys, like ratings, areas of practice, and whether they offer free consultations.