23 Apr Lease Agreement
The lease agreement is probably one of the most important documents landlords use. It is the legal agreement between you and each tenant that occupies the space you own. And therefore, it acts as the rules by which they will live and it defines the repercussions should they ever break the rules. This is why it is important for every landlord to have a lease agreement that includes certain legally required clauses, and some other additional clauses that will help make the lease agreement even stronger. But, lease agreements can be tricky. One that is written poorly can expose a landlord to loopholes that allow their tenants to end a lease early. For this reason, knowing what goes into creating a good lease agreement is important.
Please Note: this information is not a substitute for qualified legal advice.
Specifying the Rental Terms
A well-crafted lease agreement sets a landlord up for success. A good lease agreement protects your interests and prevents misunderstandings that could potentially lead to litigation. It is important to be as specific as possible when defining the rental terms. Some of the basic rental terms for a lease agreement should include the following:
- Rental terms (month-to-month, 12-month, etc.)
- Start date and end date
- Description of the rental property
- Residents’ names, each resident must be listed
- Maximum occupancy
- Cosigners names (if any) contact information and signatures
- Rent amount, due date, and late rent fee rules
- Rent payment instructions
- Security deposit amount
- Additional fees: move-in fee, pet deposit, etc.
- Pet requirements, are they allowed if so what size, etc.
- Maintenance protocol: how you will handle repairs and maintenance
- Utilities, which ones are included in the rent, and which ones are tenants expected to pay
- Instructions for setting up utilities
Adding the Right Clauses
Most standard lease agreements will include only basic information about the agreement. Generally speaking, this includes the property address, names of tenants, rent amount, security deposits, etc. To make your lease agreements even better, add the right clauses. Clauses are one of the most helpful ways to mitigate legal problems. Lease agreement clauses essentially make your lease agreement a guidebook. For example, when you need to inspect your unit or make repairs your rights of entry and inspection is clear on how repairpersons may gain entry and who is authorized. Additionally, it spells out your rights, and the notice you will give before entering the unit. With this in mind, here are other lease agreement clauses to consider.
- Limits on Use and Occupancy
- Right of Entry and Inspections
- Disruptive Behavior and Illegal Activities
- Damage to Premises/Alterations
- Severability Clause
- Holding Over
- Security Deposit Lease Clause
- Lessee to Maintain
- Attorney’s Fees
- Rent Liability
- Lease Renewal
Mandatory Lease Agreement Disclosures
Lease disclosures are statements on the lease that disclose information about a property. These state mandated disclosures inform tenants if there has ever been mold, asbestos, or lead-based paint on the property. Landlords and property managers are required to follow federal, state, and local laws about informing tenants of policies, facts, and rules, about the property. For this reason, ensuring you include the right disclosers in your lease agreement is extremely import. Because, failure for doing so can result in fines and/or potential legal problems.
- Bed Bug (Civil Code §1954.603)
- Mold ( Health & Safety Code §§ 26147 and Cal. Civ. Code §§ 1941.7)
- Lead-Based Paint
- Asbestos Rule 1206
- Pest Control (Business and Professions Code Section 8538, Cal. Civ. Code §§ 1940.8–1940.8.5)
- Murders/Death (Cal Civil Code 1710.2)
- Megan’s Law ( Civ. Code § 2079.10)
- Former Military Base Ordnance Location ( Civ. Code §§ 1940.7)
- Demolition Permit ( Civ. Code §§ 1940.6)
- Methamphetamine Contamination (Health and Safety Code Sections 25400.10-25400.46)
A good lease serves as a communication tool between you and your tenants. It informs them of your requirements and expectations, and serves as a guide in case problems arise. It can even help mitigate problems before they occur. To reap all the benefits of a high quality lease agreement, you may want to consider hiring a property management company, let them worry about the hard stuff so you can focus on your properties.