Leases are legally binding agreements between the tenant and landlord. And, as a property owner, it’s important to sign a comprehensive lease to protect your real estate investment. Free online templates are an option, but they might not give you the protection you need. We have highlighted a few important lease clauses to save you from any legal or financial trouble.
Essential Lease Clauses In Your California Rental Agreement
Here are nine essential lease clauses to include in your rental agreement.
1. Rental Agreement vs. Lease
One of the most common questions we get 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 tenant. A lease ends after a specific term (usually a year). No matter what you choose, be sure to note important dates so you and your tenants 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 renting, ensuring all tenants 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 sublet on the premises, you can terminate the tenancy and evict the residents if required. Additionally, it gives you the cover if/when you face situations of damages or delays in payments.
3. Mode of Communication
To facilitate better communication with your tenants, add a clause to ask your tenants to contact you in writing (email is great). 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. This reduces unnecessary miscommunications and would also be treated as proof if there is ever a dispute.
4. Description of Rental Property
Ensure lease agreements include the complete address of the associated rental property. Everything from unit number to any smaller location details must be in the lease. In addition, you should add details of all the inclusions & exclusions. For instance, specify included parking space and storage areas if applicable.
Besides writing in the rent amount, to avoid confusion, specify the due date. You can include acceptable payment methods like cash, check, ACH, online, or mail to your home/office. Also detail any late charges, grace period, cleaning fees, etc.
6. Deposits & Fees
Clearly mention the required security deposit, how much, what for, and how & when you 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 tenant’s responsibilities can include keeping the property safe and sanitary as well as paying for damages caused by their abuse or negligence. In case of 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 tenants. This will help you make sure your maintenance resources are properly handling issues with expensive appliances and parts of your property.
8. Restricting tenant’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, pet (if applicable), etc. For instance, If you allow pets, specify restrictions of breeds, types, sizes, etc. Plus, add the requirements to keep the interior and yard area free of animal waste.
If you prohibit smoking inside the unit, you can state where and what tenants may smoke (cigars, pipes, cigarettes, etc.).
Pro Tip: California legalized smoking marijuana, but landlords hold rights to prohibit or restrict where and what to smoke on the property.
9. Other restrictions
Based on state laws, your lease must include all relevant clauses around:
- Rent control laws and ordinances
- Anti-discrimination laws
- Occupancy rules
- State disclosure laws
- Common areas use
The complicated and detailed process of creating foolproof leasing documents can be overwhelming. A property management company can be a great resource to take this and all other investment property concerns off your plate. Look for a company with lots of experience and an active portfolio of clients in your areas to ensure they are fully up to date with all local and state laws and regulations.
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 management company in Southern California and we can put our expertise to work for you.
We can efficiently manage your investment property for maximum ROI and help you 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.