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Smart Lease Clauses for Landlords

Wednesday, July 2, 2008 posted by Tommi Crow

crow.jpg    Finding and keeping good tenants is top priority for any property manager and landlord.   A good tenant is money in the bank.  They pay on time and you don’t hear from them for another 30 days.  On the other hand, a bad tenant can be nightmare that you can’t wake up from.

As a real estate professional, I have managed my own properties and those of my clients.  During that time, I learned a lot about the value of fostering good relationships and the importance of a well thought out lease agreement.  

 A good lease recognizes potential problems or events where misunderstandings can occur.  It spells out in pure language what the remedies and expectations are for both parties.  Remember that a good lease can make life a lot easier for landlord and tenant.  If you do not have a lease agreement, you can get a free copy of a residential lease by clicking here.

Please review the following idea’s and topics for successful landlord/tenant relations.  Consider adding any clauses to your lease that clarify confusion about expectations or address situations that may leave room for interuptation.

  1. Get Paid on Time:   Obviously, leasing property is a business and the landlord needs to be paid.   A positive way to encourage on time payment is to offer a discount of $25-$35 for rent paid on or by the 1st.   Also, include a $25-$35 late penalty clause for rents received after the 5th.
  2. Cut Repair Expense and Calls:   Charge a $50 deductible for all repair calls.    I have found this invaluable in getting small things done by the tenant versus having to call a repair man to fix a minor item.
  3. Repair and Maintenance Clause:  Specify that the landlord is not responsible for damage or repairs caused by the tenant.   (This clause saved me $100 last month for a garbage disposal failure that resulted from woody flower stems that clogged my disposer.)  In addition, spell out expectations for lawn and shrub care, trash removal, etc that the tenant is responsible for.  Include all remedies and charges for non-compliance in writing.  (If your home has central heat and air, provide the appropriate number of filters for the rental term and advise the tenant in writing about the schedule for changing the filters.)
  4. Occupancy Clause:  State the number of tenants that can live at the property.   Insert a $50 per month charge for each occupant over the maximum number agreed to in the lease.   The number of people on your property affect the wear and tear, utilities, etc.   Make the tenant understand that if you rent to 2 people and 3 live there, then the rent goes up.
  5. Pets:   If you agree to accept pets, describe and specify the pets you are allowing on the property.  Include a $50 per month rent increase for any additional pets that were not a part of the original lease agreement.   (Note:  If you rent to people with pets, always get a separate, additional deposit for the pet.  Pet deposits are not a part of the property security deposit.
  6. Security Deposit:   Ask for a security deposit amount that is higher or lower than the monthly rent.   This will eliminate confusion by the tenant that the security deposit is the last months rent.
  7. Expenses:   List all expenses that each party is responsible for.   Tenant shall pay electric and gas.  Landlord shall pay water and trash pickup.  Etc.
  8. Applicances:  Attach a list of all appliances that are provided with the property.   A list can be essential at checkout, if your microwave is missing.
  9. Tenant Insurance:  Advise the tenant in writing that they need to obtain insurance protection for their contents.  Further, add that the landlord bears no responsibility for personal possessions or losses of personal property.
  10. Nuisance, Noise and Illegal Activity:   Most leases have boiler plate clauses for these items, but add any clause that is applicable to you, your property or your homeowners association to the lease agreement.
  11. Move In/Out Inspection:  Have a Move In Checklist and photo’s of the property condition at the time the tenant took possession.    Have the tenant acknowledge in writing that they agree with the content list and the condition of the property at the time of inspection.   Use this move in checklist when you perform a checkout walk-thru.   This step can eliminate a lot of battles about security deposit refunds.
  12. Smoke Detectors:   Address the number, location and inspection date for all smoke detectors.   Instruct the tenant that damaging or removing smoke detectors is a violation of the lease.  The tenant also has a duty to report any problem that arise with the smoke detectors during their occupancy.
  13. Safety Issues:  At the walk-thru, show the tenant where water and gas cut off valves are.  Also, point out cut off’s at sink and toilet faucets.   Advise the tenant about any water penetration or flooding concerns.  Explain the electric fuse panel.  Instruct the tenant about lighting pilot lights for fireplaces, water heaters and furnaces.   Safety is job 1, so make sure everyone knows what needs to happen in the case of an emergency.

Landlording is a business that moves along much more smoothly if everyone understands what is expected of them.  For more information about landlording responsibilities and rights visit the law center at Nolo Press.

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