Writing a Good Lease
A landlord’s lease is a legal contract binding landlord and tenant(s) to mutually agreed upon rental terms and conditions for a specific period of time as witnessed by signatures of all parties named on the lease.
The lease must be compliant to federal, state, city and county regulations and requirements. The lease transfers possession, use and enjoyment of the named rental premises from the landlord to the tenant for a specified period of time for a stated amount of rent. The lease furthers sets out in detail the terms and conditions of tenancy, duties and responsibilities of landlord and tenant, and remedies for lease default.
A landlord should customize his lease agreement to protect his business interests. If a rental issue represents a risk or a potential risk to business operations, an appropriate lease clause should be written to address the issue through policy, practice and remedy for default.
The landlord’s lease agreement is the critical business document that governs rental business operations. A compliant lease is the working document that defines and controls the landlord-tenant relationship. When issues arise, the first question asked is “What does the lease say?”
Consequently in drafting a good lease agreement, care should be taken to ensure the lease is not only legally compliant but provides all clauses necessary to protect the landlord’s business. A good lease provides risk prevention practices against known rental risks and the potential of unknown risks. Failing to provide adequate detail of rental policies and practices within the lease or allowing the lease to fall silent on rental issues, can prohibit or restrict the landlord in exercising his rights to enforce lease terms and conditions.
What makes a good lease? A good lease is written from a clear understanding of laws applicable to rental housing matters including but not limited to federal laws such as the Fair Housing Act, the Americans with Disabilities Act, and the Fair Credit Reporting Act; state landlord-tenant statutes; and local rental ordinances. The lease must be in compliance with health and safety codes, occupancy rules, rent control laws, anti-discrimination laws, and consumer rights protections.
A good lease should be sufficiently detailed to provide instruction to the tenant on rental obligations, duties, rules and regulations during tenancy. What should be included in a lease is the landlord’s business decision, but there are common lease clauses used by many landlords in their leases to protect the business.
As examples, a lease may utilize some or all of the following clauses.
- Lease execution date
- Identification of Lessor (landlord) and Lessee (tenant)
- All adults of legal age should sign the lease agreement.
- Identification of the rental premises
- The street address, city, state, and zip code of the rental property should be noted as well as a rental unit designation, building number, and the apartment complex or community name associated with the property. Tenant assigned parking spaces, designated storage units, or other rental privileges granted to the tenant for use during tenancy should also be notated on the lease.
- Term of tenancy
- Fixed term lease with beginning and ending dates
- Month-to-month rental agreement
- Renewal Terms
- Early termination of lease provisions
- Occupancy of rental premises
- Only the named tenants on the lease and their minor children are permitted to occupy the rental premises.
- Use of rental premises
- The use of the rental premises is restricted to residential purposes only. Illegal activities are prohibited.
- Guest Policy
- Written landlord approval is required for extended guest stays. A landlord may set a time limit on length of guest stays. Written approval by the landlord is required for extended guest stays.
- Rents
- Monthly amount
- Date due
- Payment/delivery method
- Grace period
- Late charges
- Last month rent
- As allowed by statute or ordinance, a landlord may require last month rent at time of tenant move-in.
- Security deposit
- Dollar amount collected
- Use of deposit
- Where deposit is held
- Interest rate as applicable by statute
- Reasons for deductions that can be taken
- Procedures for accounting and return of deposit
- Deposit replenishment requirement for damage deduction before end of lease term
- Written approval of landlord required if security deposit may be used for last month rent
- Nonrefundable fees or deposits
- As allowed by statute or ordinance, a landlord may require a nonrefundable such as a cleaning fee.
- Utilities
- Landlord provided
- Tenant responsibility
- Landlord disclosure of shared utilities may be required by statute.
- Repair and Maintenance responsibilities
- Landlord responsibilities
- Tenant responsibilities
- Tenant required to keep rental premises clean, sanitary and in good condition
- Tenant required to notify landlord of defective or dangerous conditions on rental premises
- Tenant required to reimburse landlord for costs of repairs for damages caused by the tenant or the tenant’s guests
- Alterations to rental premises
- Tenant alterations to rental premises prohibited unless authorized by prior written approval of landlord or as provided by law such as reasonable modification. Tenant is prohibited from altering, rekeying, or installing locks or security systems to rental premises unless prior written consent given by landlord.
- Appliances
- Furnished by landlord for tenant use
- Tenant required to furnish own appliances
- Landlord right to access rental premises
- Notification to tenant as required by statute
- Landlord policy and practice for request to enter rental premise
- Permissible reasons for entry
- Scheduled inspections
- Property repairs and maintenance
- Property showing to prospective tenants or buyers
- Repairs or maintenance during tenant’s extended absence
- Emergency situations
- Grounds for termination of lease
- Lease Defaults
- Material terms and conditions of lease
- Disruptive behaviors
- Excessive noise
- Criminal activity
- Waste and nuisance
- Holdover tenant at lease expiration
- Conversion to month -to- month tenancy
- Automatic renewal with increase in rent
- Other changes in lease terms and conditions including rent increase
- Renters insurance
- Required tenant purchase of renters insurance as a condition for tenancy if allowed by law
- Proof of insurance required at move-in
Leases may also have special clauses:
- Joint and Several Liability
Each tenant is jointly and severally (individually) responsible for the entire rent amount and damages to the rental unit caused by any tenant.
- Severability
If any portion of the lease agreement is held to be invalid, its invalidity will not affect the validity or enforceability of any other provision of the lease agreement.
- Address of each party for service of legal notices
- Sublease and Assignment
- Tenant is prohibited from subleasing or assigning of rental premises.
- Alternative Dispute Resolution
- Mediation
- Arbitration
- Abandoned Property
- Personal property of the tenant abandoned in the rental unit will be handled in accordance with state statute requirements.
- Tenant Absence from Premises
- Absences from the rental premises for extended period as specified in lease require written notification to landlord.
- HOA
- Tenant acknowledges receipt of HOA CC&Rs
- Tenant held responsible to comply with HOA requirements and pay landlord for any penalties incurred
- Attorney fees and Court costs
- Entirety of agreement
The lease agreement, lease addendum, or attachments such as Tenant Rules and Regulations constitute the entire agreement between landlord and tenant. Any changes or modification to the lease agreement must be in writing and signed by landlord and tenant.
Other Lease Clauses or Tenant Rules and Regulations Attachment to Lease
- Pet Policy
- Non-smoking clause
- Move-in Procedures
- Property inspection and checklist
- Fees and deposits collected
- Keys/access codes transferred to tenant
- Property Inspections
- Health and safety inspections
- Termination of Lease and Move-out Procedures
- Tenant instructions regarding move-out responsibilities
- Final property inspection and checklist
- Return of rental premises in good condition to landlord
A landlord’s lease cannot require a tenant to waive his rights under law by agreeing to waive the landlord’s responsibility for the warranty of habitability; agreeing to hold the landlord harmless for breaches of the warranty; or agreeing to hold the landlord harmless for his negligent acts or other actions by the landlord to circumvent landlord-tenant law.
A landlord should always conduct his own due diligence for compliance requirements. The above mentioned lease clauses are representative of commonly used lease clauses but do not constitute legal advice or rental housing recommended business standards.