5 Terms to Include in Your Lease Agreement

Becoming a landlord or property manager can serve as a lucrative source of income when done correctly. But many landlords in the process of renting out their first property fail to include the necessary terms in their lease agreement. As a result, these first-timers often neglect to provide themselves with adequate protection and security when renting to new tenants.

To avoid common and possibly major mistakes, it’s imperative to carefully look at what terms are in your lease agreement. Including these five terms in your lease agreement will provide you with peace of mind and legal security.

Signing of All Parties Living in the Unit

When creating a lease agreement, it’s important to include the names of both you and your main tenant. This may seem obvious, however, many landlords forget to require all the adults living on the premises to sign the lease agreement.

Requiring a signature from all parties to the agreement will ensure that all adults living in the rental are responsible for upholding the duties and obligations outlined in the lease agreement. In addition, requiring a signature from all parties gives you the ability to terminate the lease agreement if any individual tenant violates the terms. When only the main tenant is listed, this can be more difficult.

The Length of the Lease

Although most leases are year-long agreements, indicating the period of the lease agreement in writing is necessary. This clause outlines whether the agreement will be potentially renewed on a month-to-month basis or a year-to-year basis. Lease agreements can also run on a three-month- or six-month-renewal period. The agreement should also set out options for renewal upon expiration of the term, along with termination options.

Security Deposits and Other Fees

Security deposits can cause tension between landlords and tenants, so it’s important to be clear and specific in the lease contract about all matters related to the deposit. Make sure to include the amount of the deposit, as well as the criteria for how the deposit is returned, and how the deposit is used. The agreement should also outline what kinds of fees the landlord can deduct upon return of the security deposit. Since laws regarding security deposits vary per state, ensure that the terms in your contract are compliant with your own state laws.

Repairs and Right of Entry

Lease agreements should dictate maintenance obligations for both landlords and tenants, and these obligations should be clearly outlined. For example, tenants are typically responsible for maintaining a clean premises, as well as alerting the landlord of any necessary repairs to the property. On the other hand, landlords are responsible for performing repairs in a timely manner, and making sure the premises are safe and habitable.

Failing to perform repairs can put you in violation of the lease agreement. However, some tenants will refuse to provide landlords with access to their apartment, making it impossible to complete repairs. Your lease agreement should clearly set out the conditions under which you are allowed to enter a rental unit, along with what notice is required before entry. State laws regulate the right of entry for landlords, so again, ensure your lease agreement is compliant.

Pets

The lease contract should also state whether pets are allowed. If pets are not allowed, it’s important to include this in the property listing or on the free online rental application. If pets are allowed, the agreement must specify the maximum amount of pets and whether an additional deposit is required for each pet. It should also include state restrictions regarding the types of pets you allow. While some landlords allow all pets under a specified weight limit, others only allow certain breeds.

Although it can be tempting to stick to a standard lease agreement, including these terms in your agreement will provide you with legal protection in the event of a problematic tenant.