A lease agreement is the central tool in every tenancy. It gives you the legal authority to hold your tenants accountable for their behavior both outside and inside the courtroom.
Do you have the following crucial policies in your standard lease agreements?
1. Notice requirements to terminate the tenancy
When you accept a qualified tenant, there’s no way to know how long he or she will stick around. It doesn’t matter if people sign a two-year lease; they might still move out in five months.
To protect yourself, make sure your lease agreement states explicitly how much notice a tenant must give before moving out based on the specific lease agreement. Also specify the fees renters will incur for breaking the lease early.
If they’re on a lease, make it clear that moving out before the life of the lease is over makes them responsible for the rent through the end of the lease. For month-to-month tenants, specify the notice you require, whether it’s two weeks or one month, in most cases.
2. A separate cleaning fee
Texas law allows Houston landlords to collect a separate cleaning fee from tenants when it’s written into the lease. Be sure to include the cleaning fee to cover that cost when your tenant moves out.
Many landlords are shocked to discover how dirty their units are after a tenant has vacated. Too often, the security deposit isn’t enough to cover the cost of deep cleaning.
When faced with this situation, landlords who didn’t collect any cleaning fee have to pay for extensive cleaning out of pocket. Don’t let this happen to you: Collect a small non-refundable cleaning fee up front from every one of your tenants.
3. Long-term guests
Long-term guests can turn into accidental tenants if you’re not careful. If that happens, you’ll have to evict the unauthorized guest with the assistance of the courts.
Whom do you consider a long-term guest? Someone who stays more than seven nights in a row? Someone who stays every weekend?
You should have a specific plan for when you’ll allow long-term guests and who will be considered long-term. It’s smart to require written permission for guests to stay longer than seven days.
4. Lease termination or transition to month-to-month
At the end of the lease period, do you want to terminate the lease or automatically transfer the tenant to a month-to-month arrangement? Whichever you choose, make sure it’s specified in the lease.
For example, if you wish to terminate a lease entirely and expect the tenant to move out, specify how much notice you’ll give him or her when the lease is not renewed. It might be 30 or 60 days’ notice.
If you’d prefer to shift the tenant to a month-to-month lease, specify that in the lease instead. Whichever you choose, be sure to follow Texas lease termination and renewal laws.
5. No texting
Place a clause in your lease that prohibits your tenant from texting you. Otherwise, you’re likely to face several problems when your tenants may text you.
Once you start texting back and forth with a renter, you’ll risk developing a casual relationship. Texting also gives tenants more access to you than they ought to have.
Your tenant might text you at 3 a.m., and if you lack the ability to turn your phone to silent for any reason, this can turn into a major annoyance.
You may avoid such problems by requiring tenants to call instead of texting. Make it clear that they can also still mail you a letter.
6. Late fees
If you’re going to collect late fees for late rent, that must be clearly stated in your lease. You’ll want to include a clause that governs when late fees are due, how much fees will be charged per day, the maximum amount of late fees a tenant can accrue per rent period, and how late fees must be paid.
It’s always wise to include a clause for late fees as a deterrent, even if you decide not to pursue them. If you don’t include the clause, you could regret it later.
Prior to 2019, Texas didn’t have a maximum amount for late fees, but that has changed. Late fee maximums now exist in Texas, but the amount depends on the type of unit.
Your late fees must be reasonable. You may not charge $100 a day for three weeks and expect to win in court if a tenant sues you. Be reasonable about late fees.
Ten to twenty dollars per day is enough. Cap it at a $200 fee maximum per rent period.
7. Notice of lease amendments with proper notice
Tenants don’t necessarily know their rights or landlord-tenant laws in general. Sometimes it’s wise to include clauses in your lease that reiterate Texas law.
Your lease will be the document to which your tenants refer when they want to verify what they’ve agreed to, so reiterating basic laws can prevent a confrontation.
Including details about your right to amend a lease, for example, can prevent a tenant from getting angry when he or she receives an unexpected lease amendment notice. To avoid unnecessary conflict, choose which terms to amend with care.
However, keep in mind that you may not amend a lease in the middle of the term. You may only amend it at the end of the term.
This clause will be relevant for tenants who wish to renew a long-term lease or who have an ongoing month-to-month lease.
Amending a long-term lease
On a 12-month lease, you are not allowed to change any lease terms until the lease ends. The same goes for a month-to-month lease; you can only change the lease terms after the 30-day lease period has ended.
Amending a month-to-month lease
Under a month-to-month tenancy, the lease expires every 30 days and is automatically renewed until either you or the tenant decides to terminate the tenancy. For this reason, you’ll need to give your tenants at least 30 days’ notice with regard to lease amendments.
For example, if your tenant pays rent on the 10th of the month, you must provide at least 30 days’ notice so the new lease terms start on or after the 10th.
8. A forum selection clause
A forum selection clause determines where contracting parties must have disputes litigated. With this clause written into your lease agreements, you’ll be able to require that all legal disputes will be handled in Houston.
You can also require tenants to waive their right to litigate outside the courtroom. A forum selection clause prevents tenants from dragging you to court in another county or state.
Sometimes tenants move out of state and attempt to file a lawsuit against their landlord in their new state. Most people have a basic understanding of this clause at signing, but tend to forget about it over time.
Although the clause is important, you should be prepared to manage a potential lawsuit filed in another state.
A property management company will build and enforce your lease agreements
If creating and enforcing a solid lease is exhausting or cumbersome for you, Green Residential can help. Our experienced property managers know Houston’s landlord-tenant laws to the letter.
We’ll create an ironclad, legally binding lease for your tenants, and enforce all lease terms on your behalf. Contact us today to learn more about our property management services, or sign up to get a free property management rental analysis.