Lease Clauses I Like

Someone asked me for a list of clauses that are usually not in standard form leases. Here they are some of my favorites:

  • A separate Rules, Regulations and Fee Schedules. Outline your rules and attach a price tag to each of them.  You should not be limited to default notices as your only remedy.  For example, confirmed noise complaints are $25 each.  If there is a second complaint in the same day (or the noise is so loud you can’t hear my phone call) and I have to travel to the premises, the fee is $100 plus mileage, portal to portal.  Brainstorm this one for all the things that make your life crazy, and attach price tags.  Look at HOA rules and fees for inspiration.  Be prepared to waive a fee the first time, but imply you moved heaven and earth to get your investor/spouse/whoever to agree to this. Ask the tenant to review the Rules, Regulations and Fee Schedules, and PLEASE do not allow problems to recur, because you won’t be able to get any more fees waived.
  • Animal Addendum, not a Pet Addendum. An Animal Addendum covers all animals, even emotional support animals. They are not pets.  Make it clear that owners of pets AND service/assistance animals must keep them under control so they don’t injure or intimidate others, they must clean up deposits in the yard, they must pay for re-sodding if there is urine burn, they must keep their animals quiet so they don’t disturb the neighbors, animals must be current on customary shots, dogs cannot be kept on a chain in the yard, if a pen is required, it must meet landlord specifications and tenant pays for it, and tenant is liable for all damage to the property beyond normal wear and tear.
  • Provide that all expenses and fees are additional rent, and must be paid with the next month’s rent. That way, you are not limited to waiting until lease end to collect out of the deposit, and finding out the deposit is not large enough.
  • Any lease concessions, such as discounted rent or reduced security deposit, are revoked in the event of default, whether that default is cured or not.
  • A list of people who can be given access to the premises if the tenant cannot be reached. This covers situations like death, incarceration, incapacity, mysterious disappearance, latch key kids who lose their keys, etc.  Otherwise, if your tenant dies, for example, who do you let in the property? Legally, only the executor or administrator of their estate.  Otherwise, the other heirs could sue you if the wrong person takes everything. Yes, people sue each other over stuff like this. I once handled a divorce case in which the parties argued about a 5-year old set of towels and washcloths and who was going to get them!!  Get the monkey off your back by making the tenant choose, at time of lease signing.
  • A list of permitted occupants.  Run a background check on anyone of legal age.
  • List of vehicles to be kept on the premises, and proof of liability insurance.  Make it a default if additional vehicles are routinely present on the premises (and attach a price tag.)
  • If a restraining order is issued against one tenant, you may deny access to the premises until receipt of an order dissolving the restraining order. Make it clear you are not REQUIRED to deny access. Make it clear that party is still liable under the lease. This gets you out of the middle of domestic disputes, but does not make you liable if you do let the offending party into the premises.  If the judge refuses to dissolve the restraining order, then that’s between the three of them.
  • Some states, like Alabama, do not allow lease clauses imposing attorney fee liability on tenants. If the problem results in an eviction lawsuit, the judge can impose legal fees, but the lease can’t say that. But, if you have a guarantor, you can make the guarantor liable for all legal fees, in that clause.  This allows you to collect legal fees for problems that do not go all the way to an eviction lawsuit.
  • Mold clause. This makes it the tenant’s responsibility to report mold within 48 hours of observing it, allow the landlord to inspect, and then requires the tenant to follow landlord’s instructions for cleaning and follow up. If the tenant fails to report mold within that time period, there is an inspection fee.  If tenant fails to report mold for two weeks, then landlord is relieved of liability and tenant waives any rights as a result of the mold.  This clause usually takes care of the tenant who engages in poor housekeeping practices, wants to move out early, claims common household mold is toxic mold, and basically extorts the landlord into lease cancellation.  If the mold reappears, then you either have a water problem or you have a housekeeping problem. You, as the landlord, need to know this and fix water problems as soon as possible. With the clause, you at least have a chance of finding out early and fixing it before the problem becomes huge.  If it is a housekeeping problem, then it has to be managed, via a fee schedule.
  • Light bulbs must all be in working order at time of lease expiration.  This includes appliance bulbs. If more than one bulb is burned out (things happen, after all) then there is a materials and labor replacement fee.
  • Finally, ask your insurance agent for clauses they recommend that might reduce your premiums. Things like prohibitions against BBQ grills on porches, trampolines, space heaters, etc.