A lease agreement is a formal contract between a landlord and a tenant signed by both parties before move-in. This essential, legally binding document outlines the terms of the agreement including monthly rent, deposit, and more. Oftentimes, lease agreements can be intimidating because of the complex language typically used, however they do not have to be. This blog post aims to educate our readers on common lease clauses, what they mean, and how they affect the rental agreement.
First, we will discuss the most common lease agreement clauses. Almost every lease agreement you will ever come across will contain the following:
- Party identification. Every lease agreement must state who the agreement is between. In the case of a lease agreement, it is typically between the landlord and tenant. All occupants must be included in this section of the lease.
- Description of the rental property. The leased property must be identified using the full address, including city, state and zip code.
- Length of tenancy. The term of the lease establishes a start and end date to the agreement.
- Rental price & requirements. The rental rate defines the monthly rent due, as well as the total amount due throughout the duration of the lease. It will also specify when the rent is due each month, late charges (if any), and accepted payment methods. This clause should identify who is responsible for utilities, and what happens in the case of utility over use.
- Deposit amount & terms. This is an important clause explaining the deposit amount, the collection date, reasons for deducting from the deposit, and how the deposit will be returned at the end of the lease.
- Tenant/landlord responsibilities. This clause details the specific obligations of each party. This includes keeping the property up to code, maintenance, safety, hazards, and more. Depending on the complexity of the lease, this can either be a simple clause or go into in-depth detail of requirements, rules, and responsibilities.
- Party signatures. Without signatures, the contract is irrelevant. In order for the agreement to take effect, both parties must sign the agreement.
Now that we have identified some of the most standard lease agreement clauses, let’s dive into some additional details you might find in the common lease agreement.
- Damage & Repairs
- Property Inspections
- Rules & Important Policies
- Emotional support and service animals
- Liability & Idemnification
1. Damage & Repairs
Identifying who is responsible for what throughout the duration of the lease is incredibly important. Repair clauses are the first defense against end of lease battles over the deposit. In California, the landlord must maintain a safe, habitable, and hazard free environment for the tenant, but it is between the landlord and the tenant to determine who must pay for basic repairs and maintenance.
Tenants must maintain clean, sanitary, and safe premises at all times and are expected to pay for any damage caused on their behalf. The lease must clarify that they are responsible for any tenant abuse or neglect, excluding normal wear and tear. Tenants must alert the landlord or property manager of all broken or dangerous conditions. The lease agreement should outline the process on how these complaints and repairs should be handled.
Another important part of the repairs clause is the discussion of what the tenant cannot do. For example, a tenant cannot paint the house, cut down a tree, remodel a bathroom, or perform any other type of alteration without the explicit consent of the landlord.
2. Property Inspections
This clause needs to clarify the terms in which the landlord or property manager can legally enter the property. For example, it is standard to give 24 hour notice before entering or performing repairs, but that may not be possible if there is an emergency. This clause is incredibly important to avoid any claims against illegal entry or violation of privacy rights.
3. Rules & Important Policies
Every lease agreement should include a list of important rules and what could happen if they are violated. For example, a landlord would want to include a rule against any illegal activity to limit landlord liability.
As a landlord, you have every right to determine whether your property allows pets or not. However, it’s also important to understand the role of emotional support and service animals.
No-Pets Policy If you choose to keep your property a pet-free zone, the lease should explicitly state that there are to be no pets living on the premises. If you allow certain kinds of pets (or breeds) but not others, the lease should specify exactly what is and is not allowed.
Allowing Pets If you choose to allow pets, include what types of pets are allowed, specific breeds, pet deposits, and any additional rules and/or requirements.
5. Emotional Support and Service Animals
Emotional support and service animals can get around any no-pets policy because they are not considered pets.They provide a service to their owners, which excludes them from the traditional rules. There are very specific rules on how to handle emotional support and service animals. For example, you cannot ask questions about the owner’s disability, but you can ask if the dog provides a certain service. This article goes into depth what you can and can’t ask when determining whether to allow an animal on your property.
6. Liability & Idemnification
Liability clauses are important in protecting both the landlord and the property. While all landlords are required in some capacity to have insurance in place protecting against injuries suffered on their property, a lease agreement should outline specifics on what may or may not be the landlord’s responsibility. For example, if there is a hot tub on the property, the lease should state that the tenant is responsible to maintain the water and safety of the tub and that the landlord is not responsible for any injuries suffered from misuse. This can go for fireplaces, BBQs, and more.
You can also include specifics like how to properly use or care for the property, its fixtures, furniture, etc.
The number of people you have staying on the property can significantly affect the amount of ‘normal wear and tear’. However, because normal wear and tear cannot be deducted from the deposit, it’s critical to have an occupancy clause restricting who is allowed to reside in the home. You should also include a guest clause that states how long guests are allowed to stay. For example, any guest staying longer than 7 days would violate the lease agreement.
While a lease might contain a number of additional clauses, these are the most common clauses that every lease agreement should include. Lease agreements are not only there for the protection of the landlord, but also the tenant. They establish guidelines and rules that each must follow in order for everyone to maintain an honest, professional, and pleasant landlord-tenant relationship.