Seven Clauses that Landlords Must Include in the Lease Agreement

For any landlord, renting out residential property creates significant risk. This is the reason they must always sign a lease agreement that outlines the arrangement’s details. A lease will protect the landlord’s assets and limit their legal exposure. But, just like other legal contracts, landlords must understand the terms before they sign. Here are some of the common lease clauses that landlords must be aware of:

Severability Clause

It’s important to ensure your lease contains this clause to make sure the rest of the agreement will be upheld should the court rules one or more clauses invalid. Without this clause, a contractor could be deemed unenforceable due to a default on a part of the contract.

Joint and Several Liability Clause

This clause holds every tenant in a multi-person rental liable for rent and damages. Even if only a roommate did not pay their share of the rent, the deficit will be shouldered by all tenants.

Use of Premise Clause

This clause states how rental must and must not be used. The tenant agrees that the premise must only be used for the permitted uses specified in the basic provisions.

Access to Premise Clause

Landlords may have to enter the premises for repairs, inspections, or maintenance. With this clause, visits are limited to reasonable hours and require prior notice.

Clause for Rent Due Dates and Late Fees

Landlords must specify the due date for rent, the specific amount of any late fees, and their definition of “late,” including any grace period. This clause is important to ensure the landlord can collect late fees.

Sublet Rules

Landlords that do not want their tenants to sublet their rental must state this in the lease agreement. If they allow sublets, they must establish certain rules, limitations, and procedures.

Agreement Renewal or Holdover Clause

With this clause, tenants must provide the landlord with advanced notice of their intention to move out or renew the lease. If the tenant does not want to renew for another fixed term, they can opt to transition to a month-to-month agreement, if the holdover clause is included in the agreement.

Renting out property is an excellent way to earn income. However, it also comes with legal risks. Landlords do not have to be legal experts to make an enforceable contract. But, they need to understand all terms before they agree to them. And if they have any questions about the language used in the specific lease agreement, they must ask a lawyer.