Lease Basics: Elements Every Lease Agreement Needs

The landlord-tenant relationship is a business relationship. One of the most important aspects of maintaining the health of this relationship is the lease. A vague or generic lease agreement is a sure ticket to legal trouble. Some new landlords make the mistake of downloading a lease from the internet. These leases are almost guaranteed to not be legal according to local rental laws.

At best, an unspecific, vague lease can mean a hassle. At worst, it can land you in court. How can you ensure your lease protects you legally? What are the most important characteristics of a lease?

1. Names of all tenants.
When first signing on new tenants, it’s imperative that the names of every person living at the property be included. This ensures all tenants are responsible for obeying the terms of the lease. If any of the tenants break these terms, you have legal recourse. If you fail to obtain the signature of every adult, that person could break the lease and you couldn’t do anything about it.

If one tenant decides to move out before the lease is up, he or she is still responsible for the rent because of his or her signature on the lease. This means he or she has to continue paying rent, or find a sub-leaser. To make sure you are protected, it’s important to know who this sub-leaser is and have him or her sign an agreement, as well.

2. Length of tenancy.
The most common duration for a lease is one year. However, some leases are two years, and a few are six months. As a landlord, you probably want your tenant to stay for at least a year to save you the hassle of finding a new tenant right away. Whatever your preference, it should be clearly stated on the lease. This way, you are protected if a tenant chooses to move out without making arrangements for rent for the rest of the lease. You are legally entitled in most cases to sue him or her for back rent.

3. Amount of rent.

Speaking of rent: the amount of rent you are charging is one of the most important things to put on the lease. It’s so obvious you’d think it wouldn’t need to be stated, but it’s best to note the rent on the first page of the document concisely and clearly. A solid lease will also indicate when the rent is due – typically on the first of the month, or every month on the day the tenants moved in.

4. Include details of rent payment.
This includes the acceptable payment methods. Most landlords accept personal checks as their preferred method. Also spell out any fees required if rent is not paid on time. Indicate the amount of the fee, and whether there is a grace period. There is likely local legislation your lease must obey in the area of fees. You may also indicate a fee amount in the case of a rent check bouncing.

5. Security deposit.
It’s a good practice to ask for a security deposit before permitting tenants to move in. This deposit is typically one or two month’s rent. The security deposit is a common area of friction between landlords and tenants. Indicate its details clearly on the lease to avoid confusion.

The lease should state the dollar amount of the security deposit, and ways in which it may be used by you. Typically, a security deposit is used for any damage the tenants cause to your property at the end of the lease’s term.

6. Repairs and maintenance.

As a landlord, maintaining and performing repairs on your property is part of your responsibility. To avoid mis-communication and hassle, it’s best to indicate on the lease the responsibilities of the tenant and the landlord. A tenant should keep the property clean, and any damage he or she causes as a result of abuse or neglect is his or her financial responsibility. The lease should require a tenant to inform you of any unsafe conditions on your property so you may fix them immediately.

Don’t forget to indicate what changes a tenant may or may not make to a property. Your lease may state that a tenant must ask permission before making any alterations.

7. Occupancy limits.
A landlord’s nightmare is coming by for a property inspection and finding twenty people living in his or her three bedroom property. To legally protect yourself from too many people living at your property, your lease should clearly indicate a cap on how many people are allowed to live there. This allows you to remove or evict anyone who moves in or sublets without your permission. It also protects your property from damages incurred by too many people living there, which is also unsafe for them.

8. Restrictions on illegal activity.
If you fail to indicate on your lease that illegal activity may not occur on your property, you risk becoming legally responsible for a tenant’s misbehavior. Illegal activity can damage your property, bring lawsuits from neighbors, and cause problems between tenants. Indicate on your lease restrictions on behavior such as excessive noise and drug dealing. This protects you and your property.

9. Termination.
A lease should include the terms of termination. Termination naturally occurs at the end of the lease. This section also outlines terms for eviction. Eviction is a legally messy process that can drag on for months. You are legally allowed to evict if your tenants break any of the terms of your lease, including causing excessive property damage, failing to pay rent, and engaging in illegal behavior.

If you think you have grounds to evict, you’re probably correct. However, it’s extremely important to go through the eviction process properly and legally. Different areas have differing local laws regarding eviction. If you fail to follow these regulations to the letter, it doesn’t matter how solid your grounds for eviction were; you will probably lose your case.

Green Residential

Leases are tricky legal documents. To make sure your lease is legally binding and protects you, it’s best to consult an expert. Green Residential is experienced in Houston property management and can draw up leases specifically for your needs with your protection in mind. We can also help if an eviction case comes up. Contact Green Residential today to learn more.