What Should Every Landlord Include in a Residential Lease Agreement

Sarah Martinez thought she was clear about the terms of the lease for her duplex last spring, when she rented to a young couple for $800 a month per unit. But six months into the tenancy, she finds herself in the middle of squabbles with her tenants over issues such as lawn maintenance, pets and payment due dates — all details that were never included in their lease agreement.

She recommends that landlords and renters enter into a comprehensive lease agreement that outlines the terms of the rental, serves as a reference point throughout the tenancy and outlines what to do in the case of a dispute.

Financial Terms That Prevent Disputes

Another area which could cause problems between a landlord and a tenant is the financial side of the lease agreement.

Rent Structure and Payment Details

When publishing your monthly rent on websites such as Vacation Rental By Owner or Airbnb, make sure you include the specific date the payment is due, accepted payment methods and how much of a grace period you are granting the tenant before payment turns late. Clearly stating your late fees, as well as the circumstances in which they are applicable, can save you a lot of time consuming aggravation with tenants. These items are commonly left out or clearly stated the wrong way by many landlords.

They won’t.

Should you as a landlord be willing to accept partial payments during times of financial difficulties on the rental property, or would it be better to require full payment every month? While some landlords have been known to be more compassionate during hard times and accept partial payments from time to time, the risks far outweigh any benefits. Even though you may on occasion accept a partial payment, the fact remains that over time this can lead to a pattern of underpayment. It is best to clearly outline your position on late payments in your landlord tenant lease, as changing your position in the future is extremely difficult. In fact, it can also be illegal.

Security Deposits and Additional Fees

Security deposits and how they may be used vary from state to state, but the terms of such deposits are typically included in the lease. This may specify the amount of the deposit, the types of expenses it covers, and the conditions on which a lessee may expect to get the deposit back upon expiration of the lease.

Other rental fees and charges? Pet deposits, pet cleaning fees, application fees, and other services or damages for which the landlord collects can all be included in the rental agreement. Landlords may also charge for other damages or services that are not listed in the rental agreement, and then be responsible for legal issues that arise from them.

Property Use and Maintenance Responsibilities

At some point in the leasing process, discussions are likely to turn to maintenance and repairs. Landlords and property management companies may assume that tenants are responsible for fixing broken items or for performing basic maintenance and upkeep, and tenants may assume that all repairs are the landlord’s responsibility. This is a potential source of conflict and it should be addressed before it becomes a problem.

Landlord Obligations

We anticipate the Property Owner will be responsible for repairing and maintaining items such as major structural repairs, foundation repairs, and any issues pertaining to heating and air systems. If a Furnished unit is furnished with a furnace, stove, refrigerator, washer and dryer, the Property Owner’s agent shall repair or replace when said items malfunction. Please note the response times for maintenance and repairs, i.e. immediately for life threatening emergencies, and within a reasonable time frame for painting touch ups.

Tenant Responsibilities

Tenant’s maintenance and repair responsibilities These are generally the same as those found in most tenant agreements and include: keeping the property and its contents clean and decent; carrying out minor repairs such as replacing light bulbs, fixing leaks, clearing blocked drains; mowing and maintaining lawns (where provided); using all electrical and gas appliances, heating systems, air conditioning and refrigerating systems properly.

In addition to collecting a security deposit when you turn over a rental property to a new tenant, many landlords require tenants to be responsible for replacing air filters or smoke detector batteries as part of their normal upkeep of the home. However, while tenants are fine to call you in the middle of the night to have a blown light bulb fixed, they should not call an electrician to install neon pink GFCI outlets in your bathroom.

Occupancy Rules and Restrictions

Your lease should specify who is allowed to live in your rental property and under what terms. This means including in the lease agreement the names of any approved occupants as well as any rules regarding guests or subletting. Many landlords make the mistake of not having a guest policy — until they wake up to find the two-bedroom house they rented out is now home to six people.

SET A MAXIMUM NUMBER OF DAYS FOR GUEST STAY REQUIRE WRITTEN APPROVAL FOR EXTRA PEOPLE

Your pet policy, also known as animal or pet addendum, requires some attention. Even if you are allowing pets, the rental agreement should outline the details that you are allowing. Define what type of pets are allowed (cats and dogs, birds, small animals), what sizes and weights. Also, list some restrictions. For example, you might say no pets on the ground floor or you allow 2 dogs, no cats. List the pet deposits and any monthly fees that are allowed by state or local laws. If no pets are allowed it should clearly state that to avoid disputes with a tenant claiming to have an emotional support animal, like a Rottweiler.

Legal Protection and Documentation

A good lease agreement provides much-needed legal protections for landlords and tenants alike. However, its value is only as good as the quality of its terms and the completeness of its execution under local, state and federal laws. While many landlords opt for free lease agreements downloadable from the Internet or generic forms available for purchase that are known as boilerplate leases, these documents offer limited protection.

This section covers: the steps both Tenant and Landlord must take to end a lease agreement; the Lease Renewal Options available to both; and the grounds for eviction of a Tenant. A landlord often includes language from a lease agreement form (also known as a Land Contract Form or Residential Lease Agreement Form) that includes general legal language and some landlord preferred terms not adverse to public policy and allowed by the state.

Take high quality photos of every aspect of the property before the tenant(s) move in. Create an “Inspection Checklist” that outlines every detail of the property. Sign the checklist and give a copy to the tenant. This helps to avoid disputes and ensure that only reasonable deductions are made from the security deposit when the tenant moves out.

Lease violations and their impact on both tenants and landlords are significant concerns for the rental property investor. Here is a step by step strategy for handling any problems that arise in order to protect your investment while being fair to the tenant. Don’t forget, what begins as a minor problem can quickly turn into a huge headache if not handled in the proper manner.

The lease agreement is the primary documentation between the landlord and the tenant. The well drafted lease serves to prevent a majority of landlord-tenant disputes before they occur. However, should a dispute occur despite the lease agreement, the lease provides the basis for the dispute and the parameters in which the conflict is to be resolved.

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