There are some problems with tenants that come up all the time. Although covering all eventualities with your lease agreement is impossible, ie. the Eviction Moratorium, covering the most common ones will make your life as stress-free as possible.
Tenants like to know the rules, if you tell them in advance what your expectations and rules are, there will be fewer misunderstandings and if there are you can always point to the lease.
These are the most important clauses you must have in your lease agreement based on our experience managing our own and other people’s rentals.
Parties, Property Location, Terms, and Definitions
This is the basic information, about the landlord, tenants, property location, and the lease duration.
Occupants, Guests, and Sublets
The lease should name all occupants who are not on on the lease. It’s hard to enforce the rules if you don’t know exactly who is living on the property. This clause also specifies how long guests can stay.
A landlord should never allow subletting without permission. The problems that can arise from illegal sublets are numerous, especially if a tenant turns the rental into Airbnb.
Rent, Charges, Nonpayment of Rent
I have found that the best way to avoid late payments is to make it clear from the beginning what the penalties are for late and nonpayments. This clause not only lists the charges for late payments, insufficient funds, returned checks but it clearly spells out what happens if we don’t receive rent by the due date. It also states that we don’t make any exceptions to this rule.
We have had tenants in the past who wait for us to deliver the Eviction Notice before they pay. To avoid this we included not only late charge but also fee for delivering the notice. We use a process server to deliver the notices and we charge the tenants every time we have to do it.
Security Deposit
Some states like Florida require a specific language to be included in the lease explaining where the deposit is held and how and when it’s returned to the tenant.
We also included that we only return security deposits by mail and the check is addressed to all tenants.
Fixtures and Alterations
Tenants have to ask for permission to make any alternations including painting. If permission is granted then those improvements stay with the property.
Uses of the Property
Some of the clauses in the agreement may be common sense for most people but it’s a good idea to explain what the property can be used for i.e. residential use.
Evidently, tenants can have home offices but where we draw the line is Airbnb, child care, adult care, or any other group home.
Some of the additional items in this clause are: list of forbidden equipment like trampolines, allowed window covers, and some safety warnings.
Safety and Crime
This clause simply states that tenants should not be involved in criminal activities. It also gives directions on what to do if an emergency or crime happens on the property.
Vehicles
If you don’t want tenants turning your rental into an auto shop or salvage yard, you have to include this clause. It also lists the vehicles allowed on the property.
Having the license plates of the vehicles registered to tenants on file is also a requirement in many communities with a Home Owner’s Association.
Pets and Animals
The moment you get a call from a neighbor about your tenant’s chickens, you will understand why this clause includes other animals.
This clause simply states that no pets or animals are allowed without the landlord’s permission. If the tenants have pets, it’s best to include the pet addendum.
Smoking
This clause specifically prohibits any smoking inside the property. It also lists everything that’s included in the definition of smoking.
HOA and CDD
Very important in the states with deed restrictions and strict Home Owner’s Associations. In Florida for example, many associations require tenants to be approved by them before the lease starts. As you would expect, they can take their time doing it. This clause makes the lease contingent upon approval from the HOA and also has language that the tenant is responsible for any additional deposits and applications the HOA or Condo Board would require.
Because fines from the HOAs and their managements are common, this clause also lists admin fees for not responding on time to any deed restriction violation.
Right of Entry
Most states have laws on when and why a landlord can enter rental property, this clause is for the tenant’s benefit mostly. State law supersedes what is written in a lease.
Keys and Locks
Lists all provided keys and remote controls. Advices tenants that they cannot change any locks without the landlord’s permission.
Utilities
It’s important to point out not only who is responsible for paying for utilities but also what happens if utilities are paid by a third party like the HOA or Condo Association and they stop paying. Also what happens if the tenant moves in and the utilities are in the landlord’s name. Disconnecting utilities is considered illegal, this clause makes it clear to the tenant that they have a responsibility to turn the utilities on and the landlord has the legal right to turn them off.
Maintenance and Repair Requests
Very often I see complaints from landlords that the tenant ignored a small maintenance issue and it turned into a very expensive problem. This clause has a language that requires the tenant to report those issues immediately.
Have you been called after a tenant moves in with dozens of small repairs most of them cosmetic? The lease should have language that the tenants accept the property AS-IS, in order to avoid the mistaken belief that everything should look perfect after the move-in.
Another issue that needs to be addressed in the lease is what happens if the tenants or their guests break something or cause damage to the property. Who is responsible for that?
Here are the additional points that need to be included under maintenance and repair requests:
- All Maintenance Requests must be in writing.
- What is considered an emergency request and what is not?
- How long does it take to complete a request?
- Tenant must allow access or accept responsibility for delays or damage caused by no access
- The landlord is not responsible for compensating the tenant for any time missed from work because of a needed repair.
- Who is responsible for fixing and changing the batteries in the smoke detectors.
- Who is responsible for fixing the garbage disposal (#1 item in maintenance requests)
- Who has to replace the burned-out light bulbs.
- The dreaded plumbing clogs – what is the tenant’s responsibility
- Pests – what will the landlord cover and when
- Yard maintenance responsibilities- with an exact schedule for watering.
Lease Renewals
The lease renewals and notices are regulated by state law in most states but this is still something that needs to be included in the lease.
Termination of Lease and Vacating
There are a couple of important clarifications that the lease needs to make:
- What happens if the tenant terminates the lease early?
- What happens if the landlord has to sell the property?
- What are the expectations of the condition of the property upon move-out?
Abandonment
A tenant has an obligation to notify the landlord of any extended absences. This clause explains when the property is considered abandoned and what happens to the tenant’s belongings if the property is abandoned.
Insurance
Have you had a call from a tenant asking you to pay for their spoiled food because the fridge is broken?
This clause makes it clear that the landlord is not responsible for the tenant’s personal items including food. It requires tenants to get liability insurance and strongly encourages them to get insurance for their own personal belonging.
General Terms of Agreement
Here are some additional general terms that need to be in the lease:
- Disputes and litigation
- Default
- Attorney Fees
- Condemnation, Damage to Premises, Acts of God.
- Risk of Loss
- Mold
- Assignments
- Application
- Waivers
- Indemnification
- Integration
- Acceptance
- Electronic Signatures
