Every landlord wants to use a rock-solid rental lease agreement. But finding or creating one can be tricky and expensive – no less really understanding some of the language we skip over that we wish was written in plain English. Let’s cover essentials of a lease and go a little deeper into some of our favorite clauses.
Essential Rental Lease Components:
At a minimum, a rental lease needs to be comprehensive and legally uphold-able. It details both the commitments and expectations of all parties. Below we list the elemental building blocks that comprise a thorough lease that will appropriately address the needs of the vast majority of landlords:
Relatively Consistent Across the States
- Maintenance & Repairs
- Extended Absences
- Assignment & Subletting (the Prohibition of it)
- Early Lease Termination
- Legal Notices
Tend to Change from State-to-State
- Security Deposits
- Landlord Access
- Late Fees & Supplementary Fees
- Payment Grace Periods
- Lease Default
Tip: Look to see that the above clauses are included, and that the relevant state-specific details are present.
In addition, there are a few ‘bonus’ clauses that are not so typical but should be. They offer more protection to all parties when implemented correctly:
- Renters Insurance
- Use of Premises
Tip: A Rule of Thumb
There are 3-5 standard clauses you simply can’t create a lease without, like identification of the parties, premises, and payment terms. While we’re not correlating lease quality to the number of clauses, take a good look at any lease containing fewer than 15 clauses — ensure all applicable elements are included.
Tip: Look for some of these finer points in these ‘standard’ lease clauses:
Maintenance & Repairs
This should address responsibilities for both the landlord and the tenant. The landlord should repair items in a reasonable time frame, and the tenant should notify the landlord of needed repairs and allow proper access. Additionally, it’s helpful to spell out what you don’t want the tenant to do – namely make repairs on their own. You may not agree with their taste or craftsmanship – even with the best of intentions. Avoid this.
Survey after survey in recent years, the ability for a renter to have pets has moved from a rental perk or add-on to a must-have. The lease should state they are not allowed unless specifically identified and allowed, typically in a Pet Addenda. Be sure to increase the security deposit accordingly and adhere to your lease. If Cujo is replaced by Toonces, your addenda needs to be updated.
Prohibit this. If you want to allow it, state that you must approve the sublet parties and they must sign all relevant agreements as well. Steer clear unless your rental model allows for fluid movement of renters.
This a topic unto itself – see other blogs we’ve written on this topic. If your rental relationship is working well, renew the lease as you both see fit when the initial lease term is coming to a close, ideally 60 days out (more typically 30 days). Do not allow for auto-renewal in your lease — you should either go month-to-month or renew with a new lease term. Otherwise, you can get locked into a longer term commitment for a rental relationship that doesn’t work well for you. The right lease will guide you on these points.
This topic is also a bit more complex. Most times, you don’t want to allow for early termination, and in those cases, it’s best to spell it out. But say you are thinking of selling the property perhaps – then you may want to allow for early termination for yourself. Broadly, if you allow early termination, you should spell out the number of days’ notice (60 days) and/or a monetary relief (2 months’ rent).
In closing, use these tips to quickly peruse a lease and determine if it’s the right lease for you. To be protected, professional, and confident, you need a lease that is comprehensive and legally uphold-able.
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