Strengthen Your Lease

Strong lease clauses protect the landlord’s business. A strong lease is a risk management tool to defend against known risks and a risk preventative measure for unexpected events.

A lease agreement is a legal contract that governs the landlord-tenant relationship. The lease transfers possession, use and enjoyment of the rental premises from the landlord to the tenant for a specified period of time and for a stated amount of rent. The lease agreement is a working agreement between landlord and tenant that sets out duties, obligations, rights and responsibilities of each party. As a business tool a lease must be strong for enforcement of terms and conditions and provide remedy for lease default.

A detailed lease agreement helps to reduce tenant misunderstandings of important issues. The lease provides guidance to the tenant regarding the standard of conduct expected during tenancy. A short form generic lease cannot provide the detail required to properly inform the new tenant of rental policies and practices, rules and regulations specific to the named premises and the landlord’s business.

It will be the quality of the lease language, fully detailed to business necessity and legal compliances that will furnish the greatest protection for the landlord’s business. Failing to provide adequate detail of policies and practices or falling silent on important issues (wherein a lease does not address an issue) can prohibit or limit the landlord from exercising his rights n enforcement of lease terms and conditions or in a defense against legal actions. Having written detailed rules and regulations included within the lease helps the landlord to remain objective in handling landlord-tenant matters, particularly when enforcing rental policies.

There may be specific lease language required by state statute or local ordinance regarding lease issues of deposits, fees, landlord disclosures, or legal notices, etc. that must be inserted in the lease.

The following items are important lease issues that can help protect the landlord’s business.

  • Date of execution
  • Identification of parties to the contract
    • Landlord  or owner name
    • Tenant name (s)
  • Identification of rental premises
    • Street address, unit number, city, state
  • Term of the agreement
    • Fixed-term lease agreement (beginning and ending dates)
    • Rental agreement (month-to-month)
  • Occupancy
    • Named tenants  and minor children only
  • Use of Premises
    • Limited to residential purposes
    • No illegal activities
  • Appliances or Equipment at rental premises
    • Landlord provided
    • Tenant to provide
  • Joint and Several liability
    • Each adult tenant is jointly AND individually responsible for the entire rent amount and for any damages
  • Severability
    • If any portion of the lease is held to be invalid, its invalidity will not affect the validity or enforceability of any other provision of the lease
  • Rents
    • Monthly amount
    • Due date
    • Manner of payment
    • Delivery of payment
    • Pro-rated first month’s rent
    • Last month’s rent
  • Late Rent
    • Grace period, if required by law or desired by landlord
    • Late Fee Amount
    • Late Fee Application
  • Fees
    • Returned NSF check fee
    • Other bank charges
    • Non-refundable fees
  • Security Deposit
    • Dollar amount of security deposit
    • Use of deposit (per law)
    • Return of deposit
    • Itemized statement of deductions
    • Applicable state security deposit rules and requirements
    • Prior written approval from landlord if security deposit may be used for last month’s rent
  • Move-in Procedures
    • Property inspection and checklist
    • Fees, deposits collected
    • Keys/access codes transferred to tenant
  • Utilities
    • Tenant responsibilities
    • Landlord responsibilities
    • Disclosure of shared utilities
  • Repairs and Maintenance
    • Tenant responsibilities
    • Landlord responsibilities
  • Repairs and Alterations
    • Tenant alteration or repair to premises prohibited unless authorized by written consent of landlord or as provided by law
    • Tenant prohibited from altering, rekeying, or installing locks or security systems to premises unless authorized by written consent of landlord
  • Covenant of Quiet Enjoyment
    • Tenant right to quiet enjoyment of rental premises
    • Tenant, guests, or invitees prohibited against violation of laws and ordinances, committing waste or creating nuisance
  • Landlord Right to Access Rental Unit
    • Emergency access
    • Applicable entry by statute
    • Notice requirements for entry
  • Property Inspections
    • Health, safety inspections as required
    • Scheduled property inspections for interior and external conditions
  • Lease Defaults
    • Material terms and conditions of lease
    • Disruptive behaviors
    • Excessive noise
    • Criminal activity
    • Grounds for termination
  • Guest Policy
    • Limitation of guest stay without approval
    • Written landlord approval needed for extended stays
  • Sublease/Assignment
    • Tenant is prohibited from subleasing or assignment of rental premises
  • Landlord Disclosures
    • Lead-based paint pamphlet
    • Other environmental disclosures
    • Disclosures required by state statutes or local ordinance
  • Alarms and Detectors
    • Tenant acknowledgment of operable smoke alarms, carbon monoxide detectors at move-in
  • Tenant Absence from Premises
    • Absences from the rental premises for more than the landlord specified number of days require written notification to landlord
  • Alternative Dispute Resolution
    • Mediation
    • Arbitration
  • Renters Insurance
    • Required to purchase renters insurance as a condition for tenancy
  • Abandoned Property
    • Personal property of the tenant abandoned in the rental unit will be handled in accordance with state statute requirements
  • Hold over Tenant
  • Reverts to month-to-month,
  • Automatic renewal for specific term, with a specified rent increase
  • Lease terms and conditions may change including rent increase
  • HOA
    • Tenant acknowledges receipt of HOA CC&Rs
    • Tenant held responsible to comply with HOA requirements and pay landlord for any penalties incurred
  • Other Rental Policies
    • Property Rules and Regulations
    • Home-based Business
    • Pet Policy
    • Parking Policy
    • Smoking Policy
  • Termination of Lease and Move-out Procedures
    • Tenant instructions regarding move-out responsibilities
    • Property inspection and checklist
    • Return of rental premises in good condition to landlord

The above mentioned lease provisions are not all inclusive of an adequate lease to protect business interests. Certain types of properties or certain locations of properties may require customized lease clauses that should be included in the lease agreement or as a referenced addendum to the agreement.

Lease clauses that that violate applicable federal, state, and local laws, i.e. Fair Housing, Americans with Disabilities Act, landlord-tenant statutes, zoning laws, building codes, health and safety codes, etc. are illegal.

The lease should not contain provisions that require the tenant to waive his rights under law. As examples, a tenant cannot waive the landlord’s responsibility of the warranty of habitability or agree to hold the landlord harmless for breaches of the warranty. A lease provision that prohibits the tenant from holding the landlord responsible for the landlord’s negligent acts or other attempt to circumvent landlord-tenant law is illegal.

A tenant may not be evicted without legal due process, that is, without notice or a hearing on the issue. In almost every state a lease agreement cannot contain a landlord lien clause, a provision that permits a landlord to take possession of the tenant’s personal property without due process because of non-payment of rent.

A lease agreement cannot contain a clause that penalizes a tenant for informing government authorities of a landlord’s violation of the law. Most states address the issue of retaliatory eviction in response to a tenant’s complaint to authorities by prohibiting a tenant eviction for any cause immediately following a complaint.

A significant percentage of problems related to property management can be avoided or at least minimized by adequate research of applicable statutes and attention to detail regarding business needs. As a result, a well drafted lease agreement can help protect the landlord’s business and help the tenant to comply with lease terms and conditions.

Comments are closed.