Ten Essentials of Lawsuit Proof Lease Or Rental Agreements

By E-Renter Tenant Screening
Posted on September 20, 2006 under Landlord Tenant Lawsuits | icon: commentBe the First to Comment

Every rental property owner wishful of avoiding expensive litigation must and should know the ten essentials to include in lease or rental agreements, in the event things turn sour between a landlord and a tenant.

The purpose behind lease or rental agreements is to set out a set of rules that landlords and tenants mutually agree to follow in their rental relationship. A binding legal contract, a lease or rental agreement is an immensely practical document containing critical information, such as, duration of a tenant’s occupancy, including rental amount due each month. Whether, the lease or rental agreement is brief or lengthy, typed or handwritten, it is important that it covers all basic terms of the tenancy.

The following important items are of extreme importance and should be covered in lease or rental agreements, a landlord may draw up for a new tenant.

  1. Names of All Tenants. A landlord must ensure the names of all people living in his / her rental unit, including both halves of a married or unmarried couple are named as tenants, as well as, all of them have signed the lease or rental agreement. This way, each tenant is made legally responsible for all agreement terms, including full rental amount payment and using the property in a proper manner. Should, any of the other tenants skip without paying rent, the name and signatures of all the other tenants on the agreement will legally entitle you to claim the entire rental amount from other remaining tenants. In addition, even if one tenant violates an important lease term, a landlord can terminate the tenancy for all the other tenants.
  2. Limiting Occupancy. You must clearly specify in your agreement the rental unit is only for those tenants, who have signed the lease. Incorporation of this clause guarantees a landlord’s right to determine only those he / she has screened and approved live on the rental property. As well, this clause helps limit the number of occupants living on your premises. If, a tenant moves a friend or relative, or sub-lets, without first taking your permission, this valuable clause provides you with adequate grounds to evict the tenant.
  3. Tenancy Terms. It is important for every rental document to clarify, whether it is a rental agreement or a fixed-term lease. Rental agreements usually run month-to-month and are automatically renewed, unless terminated by the landlord or the tenant. On the other hand, leases, typically last a year, or longer. Choosing one or the other depends on how long you wish the tenant to stay, and the flexibility you want in the rental arrangement.
  4. Rent. Specify the rental amount, its due date (typically, the first of the month), and how it is to be paid in the agreement. To avoid later confusion and tenant disputes, the following should be made clear to them:
    • Acceptable payment methods i.e. personal cheques only.
    • Late fee charges for rent not paid on time, late fee charge amount, grace period, and
    • Charges, in the event of a bounced cheque.
  5. Deposit Fees. As a general rule, use and return of security deposits often proves to be a frequent source of friction between landlords and tenants. To avoid confusion and legal hassles, a landlord must ensure his / her lease or rental agreement is clear on:
    • The amount of security deposit to be paid, but, be careful to comply with state laws if any, that may have set the maximum amount that can be charged from tenants.
    • Clarify how a landlord may put the deposit to use e.g. he / she may use it for repairing any damage caused by the tenant, including making it clear a tenant cannot apply the security deposit amount to last month’s rent.
    • A landlord must also make it clear, when and how the deposit will be returned, as wells as, accounting for deductions after a tenant moves out, and
    • Any legal non-returnable fees that may be charged e.g. for cleaning or damage caused by a tenant’s pet.

    As well, it is a good to idea to include details regarding which bank the deposit is being held in (legally required in s a few states and cities) and whether, interest on the deposit will be paid to the tenant.

  6. Repairs and Maintenance. Defend yourself against rent-withholding issues and other problems (especially, security deposits) by clearly setting out both landlord and tenant responsibilities for repair and maintenance in the lease or rental agreement, including:
    • Tenant responsibility to keep the rental premises clean and hygienic and paying for any damage caused by his / her abuse or neglect.
    • Tenants should alert you to defective or dangerous conditions on rental premises, with specific details on procedures for handling complaint and repair requests, and
    • Restrictions on tenant repairs and alterations, such as, adding a built-in dishwasher, installing a burglar alarm system, or painting walls without a landlord’s permission.
  7. A Landlord’s Entry Rights. To avoid tenant claims of illegal entry or violation of privacy rights, clarify your legal right of access to the property in the lease or rental agreement. State how much advance notice will be provided to the tenant if, a landlord needs to enter the rental unit for maintenance or repair purposes.
  8. Restricting Tenant Illegal Activity. To avoid tenant trouble, prevent property damage, and limit potential lawsuits from residents and neighbours, include an explicit lease or rental agreement clause that prohibits disruptive behaviour, such as, excessive noise, and any illegal activity e.g. drug dealing.
  9. Pets. If you do not allow pets, include a No Pets clause in your lease or rental agreement. In case, you do allow pets, identify any special restrictions i.e. pet size, or number of pets or a yard kept free of animal waste.
  10. Other Restrictions. Ensure your lease or rental agreement complies with all relevant laws, including rent control ordinances, health and safety codes, occupancy rules, and anti-discrimination laws. The key is to conform to State laws especially, setting security deposit limits, notice requirements for entering rental property, tenant rights to sub-let or additional roommates, rules for changing or ending a tenancy, and specific disclosure requirements, such as, past flooding in the rental unit.

Do spell out clearly, other legal restrictions i.e. limits on the type of business a tenant may run from his / her rental premises. As well, specifically mention important rules and regulations covering parking and use of common areas in the lease or rental agreement.

To avoid expensive litigation, screen prospective tenants and employees, weeding out undesirable elements that carry past evictions or criminal pasts. Visit www.e-renter.com for tenant screening and background check services.

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