Landlord Basics: Lease Clauses

Lease

(This post is part of our “Landlord Basics” series, which seeks to help the new landlord / investor understand some of the basics of tenant relations and property management.  Click here to view the entire Landlord Basics archive.)

The Landlord Basics series has covered a few different aspects of leases so far, from basics such as what a lease is and what it does (here), to security deposits (here), to late fees (here).  The lease is between a landlord and tenant is so important, that I wanted to do another entry on some various clauses you may want to consider adding to your leave to protect your investment.

These are just ideas from clauses, and if you are looking for specific wording you should check with your lawyer, a local real estate agent, or perhaps someone in your investment club.

Pets can be a bit of a challenge.  They can destroy your property in a variety of ways, including poor bathroom habits and chewing on woodwork.  Whether or not you choose to allow pets, you should protect yourself with a clause in the lease.  The clause can be written showing that NO pets are allowed, or written very specifically to show that the tenant is allowed 1 grey cat (Sammy), approximately 2 years old, weighing approximately 5lbs.  This may seem too specific, but 6 months down the road when your tenant has an orange and black striped beast that is destroying your apartment, you can go back and say “this one has to go, it violates the lease.”  You should also include the fee for the pet in this clause, whether it be monthly or a one time fee.

Clogged Drains are another problem area.  Tenants will often flush things that should not be flushed, or put things down the drain that don’t belong there.  Cooking grease is a prime example.  You may want to add a clause that anything you can determine to be tenant caused will be charged to the tenant.  Be sure to outline in your clause what sorts of things will be considered “tenant caused”.  You will have to be firm on this, but be fair as well.

Bounced Checks should be covered in your lease.  Many banks will charge you a NSF fee if a check you deposit bounces.  This fee should be passed on to your tenants.  You should also include a late fee, since their rent was not paid in full by the time it was supposed to be.  If the tenant is prompt in rectifying the issue, you could consider letting them off the hook for the late fee, but if they are a chronic offender, you should enforce it.  This is also a good place to spell out that after a bounced check, you will only accept funds in cash or certified bank check so that the problem can not reoccur.

Smoking inside a rental unit means you will most definitely be repainting during tenant turnover.  Be sure to outline if you allow smoking on the property or in the unit.  If you do not allow smoking, and determine that smoking has occurred in the unit, the charges can come off the security deposit for repairs and maintenance as a result.

Illegal Activity should be an instant eviction notice.  Spell it out in the lease.  Any arrest, search warrant execution, or known illegal activity that has taken place can be grounds for immediate eviction.  Discuss this with your lawyer to make sure your bases are covered!

Lockout Fees should be charged to tenants who call you for lock outs.  You should specify the amount that will be charged, and whether it is due up front or will be added to their account ledger.  This is something you should try to enforce whenever possible, because more often than not, lockouts mean a visit to the property.  This may mean leaving dinner on the table while you cater to the tenants needs.

Lease Renewal is important to cover both at the lease signing and in the lease.  Specify the amount of notice they need to give (usually 30 days) if they want to keep the unit or are planning to move out.  It’s a good idea to call the tenant 60 days before their lease expires to remind them you need to know their intentions.  This clause could also specify that if they remain in the property as a month to month tenant after the initial term, that the rental charge will increase by a set amount.  Speak to your lawyer to see how this should be written, or if it is acceptable to do so in your area.

These clauses will help you manage your tenants and your investments a little easier.  If you have comments or suggestions for additional clauses, I would love to hear them!

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One comment to Landlord Basics: Lease Clauses

  • A Rental Story From Mom | Andrew-Schultz.com  says:

    […] Always have a pet deposit or monthly pet fee as I had described in the article on lease clauses (here).  The extra fee or deposit will help cover the incidental damages of even the “perfect […]

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