Important Lease Clauses For Landlords

When preparing a property for rent, you handle key tasks like painting, cleaning carpets, making minor repairs, and ensuring that plumbing, electrical, and HVAC systems are safe. While you prioritize your residents’ safety, protecting your investment, cash flow, and relationships with neighbors is equally important. Managing a rental property can be rewarding, but dealing with residents’ questions and details can be overwhelming. A clear and comprehensive landlord-resident lease agreement is the best way to prevent misunderstandings. Outlining expectations and responsibilities reduces confusion and minimizes potential conflicts. 

Why Are Lease Clauses for Landlords Required 

Clear communication is essential in any business, and a well-written contract removes uncertainty. It outlines details like pet policies, guest allowances, parking, and maintenance procedures. You will also specify rent due dates and payment methods. Addressing these points upfront ensures smooth interactions with your residents and strengthens your relationship with them. In addition, a strong lease agreement safeguards you against potential legal issues, offering peace of mind. 

What to Include in Lease Agreement 

You can write an effective lease agreement without needing to consult an attorney. Numerous websites offer customizable lease templates that let you tailor clauses. Be clear and straightforward, minimizing legal jargon. For instance, if rent is due on the first day of the month, specify when it is officially considered late. Will you impose late fees? If so, how much? Decide how you prefer to collect rent. 

Online lease agreement templates can help create a contract that safeguards you and your investment property. Always include specific critical clauses in your agreement, considering that these clauses can vary by state. You can research local laws through your state government website. 

A good lease agreement should include: 

• Names and Contact Information: List both landlord and resident details. For emergencies, it is wise to include a relative or friend’s contact information. 
• Address and Type of Property: Specify whether it is commercial, residential, or a room in a private home. Make it clear that the unit is for residential use only to prevent issues like short-term rentals. 
• Term of the Lease: Decide between annual or month-to-month leases, ensuring both parties understand the terms. 
• Deposit Amounts, Rent, and Payment Dates: Clearly outline the amounts due and your preferred payment method. 
• Late Fees and Penalties: Explain how late fees and penalties will apply. 

Essential Lease Agreement Clauses  

Here is the list of essential lease agreement clauses to include in your rental agreement: 

1. Rental Agreement vs. Lease

One of the most common questions is whether to go for a rental agreement or a lease. Every rental document needs to specify whether it’s a rental agreement or a lease in California. Rental agreements create short-term tenancies that renew automatically until terminated by a landlord or a resident. A lease ends after a specific term (usually a year). Be sure to note important dates so you and your residents know what to expect for renewals. 

2. Ownership of Inhabitancy

We recommend that all residents over 18 years of age sign the lease or rental agreement, making every adult in the unit legally responsible for paying rent. This is especially important for non-family rental, ensuring all residents follow protocols mentioned in the lease/rent agreement. It also helps keep tabs on the number of people you allow in the rental. And, if you see any unapproved roommates or sublets on the premises, you can terminate the tenancy and evict the residents if required. Additionally, it gives you coverage if/when you face damages or payment delays.  

3. Mode of Communication

To facilitate better communication with your residents, add a clause to ask your residents to contact you in writing (or email). While communication over texts or calls can add a personal touch, it can cause issues, too. If your renter needs to request maintenance, for example, having it in writing in an email provides you with details of the request and a date and time stamp of when it was sent. You should also respond in writing (via email) to keep a record of the conversation. It reduces unnecessary miscommunications and would be treated as proof if a dispute arises. 

4. Description of Rental Property

Ensure lease agreements include the complete address of the associated rental property. Everything from unit number to location details must be in the lease. In addition, you should add details of all the inclusions and exclusions. For instance, specify included parking space and storage areas if applicable.  

5. Rent

Besides writing in the rent amount, specify the due date to avoid confusion. Acceptable payment methods include cash, check, ACH, online, or mail to your home/office. Please also provide details on any late charges, grace period, cleaning fees, etc. 

Pro Tip: Read on California laws- California Civil Code Section 1947 (California Civil Code Section 1962) about when rent is due and where rent gets paid. 

6. Deposits & Fees

Clearly mention the required security deposit, how much, what for, and how. Also be sure to mention when you will return the deposit. Specify in the lease if you intend to cover last month’s rent. Also, include any legal non-refundable fees like pets or mandatory cleaning.  

7. Repairs and Maintenance.

Clearly outline responsibilities for maintenance and repairs to avoid disagreements. The resident’s responsibilities include keeping the property safe and sanitary, and paying for damages caused by them. In normal wear and tear, you can take up the maintenance responsibility and list the appliances or areas you will cover (windows, doors, appliances, etc.) Also, be sure to list restrictions for self-repairs or alterations in the rental space by the residents. It will help you ensure your maintenance resources properly handle issues with expensive appliances and parts of your property.  

8. Restricting resident’s illegal activities

To prevent property damage, avoid trouble, and limit your exposure to lawsuits, you must include this clause and prohibit illegal activities like dealing drugs, excessive noise, pets (if applicable), etc. For instance, if you allow pets, specify restrictions on breeds, types, sizes, etc. Furthermore, the requirements for keeping the interior and yard area free of animal waste should be added.

If you prohibit smoking inside the unit, you can state where and what residents may smoke (cigars, pipes, cigarettes, etc.).

Pro Tip: California legalized smoking marijuana, but landlords hold the rights to prohibit or restrict where and what to smoke on the property. 

9. Late Payment

Rent is due on the first of the month, the fifth, or any day you prefer. You can assign a grace period of three to five days or whatever suits your needs. After the grace period, you can apply a late fee, either a flat rate or a daily charge. Additionally, specify any penalty fees for returned checks or payment denials from financial institutions.

10. Occupancy

List the names of all occupants who will reside in your rental. Since life circumstances can change, family or friends may move in or out during the lease period. As the property owner, knowing who is coming and going is important. Unauthorized occupants can lead to issues with neighbors, such as additional vehicles, noise, and other conflicts. Clearly outline visitor rules, indicating that guests are welcome but can only stay for a limited time.  

Additionally, it is crucial to prohibit subletting or using any part of the property as a short-term rental. Complaints from neighbors could be the least of your concerns if your resident is caught using the property as an unlicensed short-term rental. Moreover, your insurance may not cover injuries to unauthorized paying guests. 

11. Pet Policy

An increasing number of landlords welcome pet owners. If you maintain a no-pets policy, clearly communicate that to potential residents. If you are open to pets, you can specify the allowed size, type, and number of animals. Many pet-friendly landlords require an additional cleaning deposit to cover any potential damages caused by pets. Some may also charge a monthly fee for each pet. Remember, it is illegal to deny a disabled person the right to have a service animal.  

12. Utilities

Residents can manage their own utility accounts for electricity, gas, water, sewage, and waste removal by contacting the local providers directly. Landlords do not take responsibility for power outages and may temporarily shut off certain utilities for essential repairs. To help residents prepare, landlords should provide written notice of any anticipated utility disruptions. Typically, residents also cover their internet and cable services. While some landlords might offer free Wi-Fi, sharing connections among multiple unknown users may not be secure.

13. Rights to Enter the Property

Respecting your resident’s privacy is essential, but there will be times when you need access to the unit for emergencies, repairs, or inspections. Always provide your resident with a 24-hour written notice before entering the property. Plan your visits during regular business hours unless it is an urgent repair. You can schedule repairs or maintenance at other convenient times if your resident agrees. 

You might also need to show the property to potential buyers or future residents. Apply the same notice rules and clearly communicate your expectations regarding the unit’s condition and cleanliness. Additionally, always familiarize yourself with the local laws that apply to these situations. 

14. Insurance

This is a great opportunity to discuss insurance coverage. You can ask your resident to provide adequate proof of rental insurance when they sign their lease. Residents need to protect their property and belongings in case of a disaster. Rental insurance premiums are typically available for under $20 a month. 

15. Severability Clause

Include this crucial clause in your lease document to prevent future issues. A severability clause ensures that if a court deems any part of your lease non-applicable, the remainder of the agreement remains valid. 

By adding a severability clause, you protect yourself from the risk of the entire contract being invalidated by the court. 

Sign Your Lease with Beach Front Property Management 

Ready to get leasing docs off your desk so you can focus on more important things? Beach Front Property Management is the leading property management company in Southern California, and we can put our expertise to work for you.  

We can efficiently help you manage your investment property for maximum ROI and get peace of mind knowing that you have a trustworthy property management solution on your side! If you need to fill a vacancy, handle renewals with your current residents, or approach a property remodel, contact us and let our experts take it from there. 

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