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Essential Lease Clauses Every Rental Agreement Needs

Essential Lease Clauses Every Rental Agreement Needs

 

A well-written lease is more than a contract; it is a landlord’s defense against disputes. That said, not all rental agreements are created equal. While you can include a multitude of various clauses to suit your particular property, some leasing clauses are universal. Take a look below as we outline the most important lease clauses every landlord should know.

Important Lease Clauses for Rental Agreements

For the lease to hold up in court, landlords must cross every T and dot every I. Part of that process is having your lease agreement reviewed by an attorney to ensure it complies with Fair Housing and local laws. Read on for essential clauses to include in your property lease.

Rental Agreement Lease Clauses

Basic Lease Terms –

  1. Who is Everyone – A contract must identify the parties held to the agreement. This includes the full names of all tenants or occupants over the age of 18 and the landlord or representing property management company,
  2. Contract Term – Dates must be specific; day, month, and year. So, avoid saying “6 months” or any general timeframe.
  3. Responsibilities of the Tenant – Residents have an obligation to maintain the safety and sanitation of the rental. In addition to these clauses, tenants must acknowledge they cannot cause any damage to the property or dwelling.
  4. Signatures – It may seem obvious, but a rental agreement with no signatures is rendered useless. Therefore, rental agreements must be signed to truly be valid.

Lease Agreement Financial Obligations

Financial Obligations –

  1. Security Deposit – Terms of the security deposit process should include the amount, date of collection, where the deposit is held, interest rate, reasons deductions can be taken, and the procedure for returning the deposit, which is usually required within 45 days of move out. Common reasons to withhold a deposit include delinquent rent, excessive cleaning, repairs above and beyond normal wear and tear. However, whatever security policies you put in place, ensure they meet all legal requirements.
  2. Monthly Rent – From the amount to the due dates, everything needs to be clearly outlined in the lease agreement. Write out all monthly charges such as the rent, pet fees, utility charges, and prorate amounts along with the due dates. Also, list out the types of payments accepted, such as cashier’s check, money order, check, or electronic.
  3. Late Payments – Typically, rent is due on the first of each month. Most landlords incorporate a grace period into their agreements of 3 to 5 days. When tenants pay late, they must understand the consequences, and any late fees that will be assessed are clearly explained. In addition to late payments, outline the policy and fee for returned checks or payments that are not honored by the bank.

Additional Lease Clauses –

  1. Guests and Occupants – Landlords will want to address guests and occupant restrictions within the lease. This helps to prevent potential issues and guests from overstaying in the rental.  If guests plan to stay longer than 7 days, the landlord needs to be notified.
  2. Use of Premises – To prevent any confusion, dictate how the property shall be used. This clause should state that the property is for the sole use of the tenant for residential purposes only and shall only be occupied by those listed on the lease.
  3. Pets – Over 50% of renters have a pet, making a pet clause good practice for any standard lease agreement. Whether you decide your property will be pet friendly or not, all of that needs to be clearly stated. Outline any additional fees or pet deposit, extra cleaning fees, responsibility for pet damage, and punitive damages if pets are not, in fact, allowed. Ensure the tenants provide a photo of the pet along with current vet records.
  4. Lead Paint Disclosure – As required by Maryland law, any rental home built before 1978 must provide new tenants with lead poisoning education materials. Additionally, landlords must prove that the home has been professionally inspected and certified as safe and habitable.
  5. Opt-Out Clause – An “opt-out clause” is a legal way to break the lease. It gives your tenants the option to pay an agreed-upon penalty fee, which protects landlords against a tenant unexpectedly leaves.

Other Important Lease Clauses

The list above covers many of the key lease clauses landlords need, but it is far from all of them. Different properties, area laws, and landlords may require additional more specific addenda or clauses. So, in conjunction with the list above, landlords should consider these other lease clauses below.

Important Lease Clauses

  • Renters Insurance
  • Entry by Owner
  • Quiet Conduct
  • Nuisance, Property Damage, and Waste
  • Alterations
  • Repairs
  • Utilities
  • Parking
  • Assignment and Sublease

 

Final Thoughts

Writing an effective and lawful lease is the most important task for any landlord. The lease agreement, its clauses, and addenda are what protect landlords and property owners from disputes. Without proper experience in lease agreement drafting, owners run the risk of failing to include some of the essential lease clauses that serve as protection to both you and your tenants.

Looking for lawful and thorough leasing services? Bay Property Management Group Washington DC has a tried and true system for finding quality tenants and having them sign a lawful lease. With property management services throughout Maryland, Pennsylvania, DC, and Virginia, we stay up to date on all of the local, state, and federal regulations required for a landlord-tenant relationship allowing owners to rest assured their interests are protected. Contact one of our dedicated staff members today to find out more!