Completely clueless when it comes to drafting a lease? Don’t be! With our guide, you’ll have a clear and concise lease in no time. Remember—states’ laws differ greatly, so be sure and check on your local laws. What is legal in one state could be unconscionable in another.
A “strong” lease:
It is a known fact that courts will refuse to enforce agreements that are made in bad faith, meaning that the lease terms are outrageous and unreasonable. Furthermore, a lease should be strong, but not so restrictive that it will be held invalid by the court. Each state is different in regards to documenting a lease, so it is recommended to check your state’s regulations prior to drafting your agreement.
What is a severability clause?:
Under the severability clause, the terms of the contract are independent. Therefore, if just one term in the contract is seen as unenforceable, the contract as a whole cannot be deemed unenforceable (this can come in handy). Make sure to include this clause, or else your entire lease could be impossible to implement!
It is important to include the amount of the security deposit in the lease, otherwise it can be difficult (or impossible) to impose later. Additionally, if you do not collect the security deposit because you “trust their character” or some other reason, the tenant could start to take advantage of the situation and fail to pay rent, damage the property, or some other unfortunate consequence.
What should I include?:
Here are some of the articles that we believe would be beneficial to include in your lease. Keep in mind that this is not by any means the entire list, but will give you a good head start on the process. Furthermore, each point can differ depending on the state that the lease is drafted in, so keep that in mind:
- Will you allow subletting?
- Is there limit on the number of occupants and animals that are allowed to live on the property?
- What is your state’s definition (and remedy) for default (when one party to the contract fails to fulfill the terms of the agreement)?
- Who are the parties to the lease? (This is important for numerous reasons. One example is that if two people, such as a couple, are renting a unit, then both signatures should be included on the lease, or else this could become a complication later on).
- When is rent due? When is rent considered to be late?
- What repairs are the responsibility of the landlord? What about the tenant?
- What will happen if the tenant breaches the lease agreement?
Do you have any other important items to include while drafting a lease?