A lease or rental agreement is the foundation of the landlord-tenant relationship, and there are certain lease terms that should be in every agreement you create or sign. Here are the most important lease terms you should include in your agreement:
- A list of tenants. When multiple adults plan on living in the same rental, it's crucial to get the name of every adult living in the rental unit on the lease. By getting every tenant's signature, each tenant becomes fully responsible for all of the terms of the lease. This means that you can collect the full rent from any one of the tenants, as well as terminate the entire lease if one of the tenants violates material terms of the lease.
- The amount of rent due. Besides obviously spelling out exactly how much is due, don't forget to include acceptable forms of payment, where payment should be made, whether any grace period exists and any fees for late payments.
- Define the rental or lease term: The proper terminology depends on the state you live in, but generally rental agreements are month to month and leases are for longer periods (typically a year). You need to be specific as to the time period contemplated, otherwise you may find your agreement being defined by the common law of your state (which often has unfavorable terms).
- Any deposits and fees. Security deposits are one of the most commonly disputed items between landlord and tenant, so in addition to defining the amount, also include how the deposit can be used, any non-refundable fees (such as cleaning fees), and how the deposit will be returned after the tenant moves out. Security deposits are governed by state law, so check your state's laws, which typically define maximum amounts and time periods for returning the deposit.
- Specify a right to entry. Spell out exactly when and under what conditions you as the landlord can enter the tenant's unit. State law regulates how and when a landlord can enter tenant's property, so be sure your lease terms comply with state law.
- Maintenance and repairs. Both
the landlord and the tenant have responsibilities to maintain the premises, so spell out the obligations of both parties. Tenants typically have a duty to keep the premises clean, and are responsible for any damage caused by neglect or abuse. Landlords typically have a duty to maintain a livable property and are responsible for necessary repairs not caused by the tenant (such as repairing a leaky roof or fixing a heater). Create an obligation for the tenant to contact you for repairs as soon as he or she becomes aware of the problem and give the tenant contact information to ensure that repairs can be completed quickly and in a cost-effective manner.
- Define limits on occupancy. Ensure that your agreement specifies that only people who have signed the lease (and their minor children) can legally live on the property. This prevents tenants from moving in their relatives and friends or subletting without your permission. It also gives you grounds to terminate the agreement if the tenant does not comply.
- Pets. Specify whether you allow pets at all, and if you do, carefully spell out how many are allowed, what kinds are allowed or prohibited and the tenant's responsibility to keep both the rental and surroundings clean. It is also useful to outline procedures for dealing with any other animal related issues, such as noise complaints from neighbors.
- Restrictions on disruptive and illegal behavior. If you don't restrict certain disruptive and illegal behavior in a tenant's, your other tenants may have justifiable grounds for terminating their agreements based on that tenant's offensive behavior. To prevent this, spell out that certain behavior, such as excessive noise, and certain conduct, such as drug dealing, are prohibited and are grounds for terminating the agreement.
- Miscellaneous terms and restrictions: State law will define many other terms that should be included in your lease or rental agreement. Typical things that states require include notice requirements, rights on subletting, flood and chemical disclosures and antidiscrimination notices. Other lease terms to consider include items on parking, common areas and whether tenants can run a business from the property.