Residential Lease Clauses
Since residential tenancies are much more strictly regulated than commercial tenancies, you should carefully check your state and local laws, or speak with an attorney, to be sure that any lease you use complies with state and federal laws.
The landlord wants to be sure that the tenant does not do anything that will cause a lien to attach to the landlord's property. For example, if a tenant contracted for some repair to the property, a mechanic's lien or construction lien might be placed by a contractor who was not paid.
This clause designates parking areas and can also include reference to other vehicles such as boats or trailers. In some larger cities there may be virtually no street parking at certain times. Tenants should investigate this before entering into a lease, especially if there is a possibility of having a parking space included in the lease.
This clause governs the use of appliances. The electrical systems in some buildings are not capable of supplying current for large appliances and use of such may cause damage . Also, where landlords include the electricity in the rent they do not want the tenant to use excessive amounts.
If the tenant plans to use an appliance such as a clothes dryer the electrical system of the property should be checked prior to signing the lease and an agreement made with the landlord.
This clause sets out in general how many persons will be living on the premises. The landlord does not want additional parties moving into the premises because it may violate zoning or condominium rules. New landlords may be surprised to hear of experiences of small apartments being used by multiple families, but it is not that unusual an occurrence.
This clause governs whether pets are allowed, which pets, and whether an extra deposit is required.
Because pets can cause damage to property and leave lasting odors, landlords often want to forbid them or require additional deposits. In some cases landlords charge additional rent or make the pet deposit non refundable due to the extra wear and tear caused by pets.
This clause should dearly set out who is responsible for lawn maintenance.
In apartment buildings or owner-occupied buildings the landlord usually takes care of the lawn and yard maintenance. But, when a tenant rents a single family residence, the tenant is often responsible for it. Either because it is too much work, or because water may be costly, tenants occasionally ignore yard maintenance, which can result in a major expense for resodding. To avoid this possibility, when the tenant has the duty of maintaining the yard, it should be spelled out clearly in the lease.
The tenant would not want to be liable for any damage to the lawn which he did not cause, such as from drought.
This clause establishes that condominium association rules must be followed. Also, the lease should spell out in this clause who is responsible for maintenance fees and who will pay the lease approval fee, if any.
If the property is a condominium, the landlord must take reasonable care that the tenant does not violate any of the rules or requirements of the condominiums, or the landlord may have to pay damages to the association.
A person considering renting a condominium unit should obtain and read a copy of the "declaration of condominium" and any other rules and regulations prior to entering into the lease. These should be available from the landlord or from the condominium association. Otherwise you should be able to view them in the public records office of the county in which the property is located.
Note: Some condominiums have very strict rules, such as forbidding the parking of trucks and recreational vehicles on the property, forbidding pets over a certain size, or requiring curtains be of a certain color.
If a tenant has agreed to pay maintenance fees as part of the lease, he should be sure that the lease does not make him responsible for assessments as well. Assessments could include one-time charges for roof replacement or painting the building.
This clause explains whether assignment or subleasing are allowed. An assignment is where the tenant turns over all of his or her interest in the lease to a new party. The new party takes the place of the tenant and pays rent directly to the landlord. A sublease means that the tenant acts as a landlord and releases the property to a new tenant. The new tenant pays the rent to the old tenant who forwards it to the landlord. In some cases the tenant can charge a higher rent to the sub-tenant and keep the difference.
The long standing rule of law has been that a landlord could refuse to accept an assignment for good reason or for no reason. However, in many states the landlord can only reject the new tenant for good reason, such as bad credit.
If there is no clause in the lease governing assignments or subleases, the right would be governed by state law. In some states the tenant has the right to assign the lease unless the lease states otherwise. In other states the tenant has no right to assign the lease unless such right is included in the lease.
If the tenant thinks that he or she may need to vacate the premises early, such as for a home purchase or job transfer, then the right to assign the lease or sublet the property would be important. If the possibility is known at the beginning of the tenancy the tenant should discuss it with the landlord and try to negotiate a right of assignment.
This clause sets out the parameters of using the rental property. The landlord does not want the premises used for any dangerous or illegal activities which could cause insurance rates to rise or even result in liability for the landlord.
The lease should dearly spell out who is responsible for what maintenance on the premises. In some cases, such as apartment buildings, the landlord usually does most maintenance. In other cases, such as single family homes, tenants can be put in charge of all maintenance. By making the tenant responsible for maintaining the property the landlord can avoid both the headaches of management and the liability for negligent maintenance.
Since rents can vary greatly, you can mention that the regular rent is a higher amount but that there is a discount if the tenant handles the maintenance.
Note: In some areas landlords must provide maintenance and cannot put the duty on the tenant and in other areas landlords must provide maintenance for apartment buildings, but single family homes and duplexes can be maintained by tenants.
The agreement should clearly spell out who pays for what utilities on the premises. In some cases a landlord will put the utilities in his own name if a tenant does not have the deposit money. This is risky because a landlord may get stuck with a big bill. Landlords may not shut off utilities if a tenant does not pay rent. But a landlord should not have to pay a tenant's utility bills if they are paid separately from rent.
Landlords who have utilities in their names and anticipate possible problems with tenants should consult a local landlord/tenant attorney to see what local courts allow.
If the tenant defaults in any way under the lease, the landlord wants to quickly force the tenant to cure the default or to vacate the premises If the tenant refuses to accept a certified letter notifying the tenant of the default, the landlord has still fulfilled his obligation of giving notice. The post office usually gives the recipient two chances to claim the letter and it may take ten days to two weeks for the letter to come back.
Note: Each state or city may have different requirements for terminating a lease. Often there are specific rules for what notices must be given.
One way to increase the chances of that rent being on time and that the tenant complies with the lease is to offer a discount on the rent. Suppose that you need $450 rent from a property. If you can reasonably say that there are other houses like it renting for $500, set the rent at $500, but tell the tenant that he or she will get a $50 discount for paying rent one day early and for maintaining the premises.
The amount of rent and the due date should be clear and the inclusion of additional fees can avoid problems. Late fees and other such fees should be reasonable; otherwise a court may invalidate them.
As a landlord, you have the right to decide how rent is collected. You could instruct your tenants to mail a check to your home or office or set up an on-site office where tenants can deliver their rent. Another option is to personally collect the rent by going door to door or setting up a drop box. A locked drop box allows tenants to pay their rent after hours and also helps you to easily determine by the next day who has paid on time. With online banking, you may even have the option to draw rent directly from the tenant's bank account. You can check with each bank to determine if this is feasible.
The lease can be for a set term such as a year, or for renewable terms of a month or a week each. If there is a set term the document is properly called a lease; if it is of indefinite duration then the document would be called a rental agreement. In any case, the term should be clear, including the starting and ending date.
Note: Some states have laws stating that if no notice is given the lease is assumed to renew. Others have laws that state the opposite-the lease is assumed to terminate unless renewal is agreed upon by the parties. You should get in touch with your landlord or tenant well in advance of the expiration to discuss whether the lease will be renewed and whether there will be any changes.
Holdover by Tenant
This clause governs the situation where a tenant stays beyond the lease term. The landlord wants to be sure the tenant vacates the premises on time, and to be sure the terms of the lease still apply if the tenant does not. In many areas these matters are covered by law, but it is always best to spell them out clearly in the lease. Double rent is common because a holdover tenant (one who does not leave on time) may cause the landlord other problems if the property has already been rented or sold.
Damages to Premises
This clause defines the rights of the parties in the event of destruction of the premises. Sometimes the landlord may want to terminate the lease if repairs or expenses become too costly. State law may control the rights of the parties in such situation. If the premises are damaged or destroyed, the tenant might not want to live there, especially if he has to find temporary quarters elsewhere for several weeks or months. Therefore the tenant would also like the option to terminate the lease.
If any furniture or other specific items are part of the rent property, this clause governs them. If the property is furnished, the landlord will want to keep track of items of furnishings and to be sure they are returned in good condition. It is also in the tenant's best interest to check the items at the beginning and end of the tenancy to be sure that he or she is not charged for some item that was removed or damaged before he or she arrived at the premises.
In most cases the landlord wants the tenant to be responsible for extermination services. In large apartment buildings laws may require that the landlord keep the premises free of pests, but in single family homes and small apartment buildings the landlord may be allowed to transfer that responsibility to the tenant.
The logic for the difference is that in a single family home the tenant has complete control over the premises and should be able to keep it free of pests, but in an apartment building the tenant has no control over the neighbors whose lifestyle may encourage such pests.