A well-written lease agreement covers more than the basics, such as the property address, lease dates, tenant names, rent, and security deposit. It can also address situations that may arise during the tenancy and clarify the responsibilities and expectations of both the landlord and tenant.
Before adding or changing clauses in your lease agreement, consider consulting a local real estate attorney. Landlord-tenant laws vary by location and may change over time. Here are several lease clauses to consider and discuss with an attorney.
1. Severability Clause
A severability clause addresses what happens if part of a lease is found to be invalid or unenforceable. Generally, the clause allows the remaining provisions of the lease to continue in effect rather than having the invalid provision affect the entire agreement.
Including a severability clause may help protect the enforceability of the remaining lease terms. Because the effect of an invalid provision can depend on applicable law and the language of the agreement, consider consulting a local real estate attorney when drafting or reviewing this clause.
2. Late Fee Clause
A late fee clause explains what happens when rent is not paid by the due date. It may specify the amount of the late fee, when the fee applies, and whether tenants have a grace period before a fee can be charged.
Local and state laws may limit late fees or establish requirements for when and how they can be charged. Before including a late fee in your lease, review the laws that apply to your rental property and make sure the lease terms comply with applicable requirements.
3. Subleasing
Subleasing is when your tenant rents out their rental to a third party while remaining legally responsible for your current lease agreement. Subleasing may occur when a tenant needs to be away from the rental for an extended period but does not want to end the lease. For example, a student might want to sublease a rental for the summer while away from school.
A subleasing clause can establish whether subleasing is permitted and outline any conditions or approval requirements tenants must follow. Because state and local laws may affect a landlord’s ability to restrict or regulate subleasing, review the requirements that apply to your rental property.
4. Joint and Several Liability
Joint and several liability generally means that each tenant who signs the lease may be held responsible for fulfilling the lease obligations covered by the clause.
For example, if Mallory and Mindy sign a lease requiring a total monthly rent of $2,000, each of them may be held responsible for ensuring the full amount is paid rather than just their own portion of the rent. So, if Mallory suddenly moves out, Mindy may be responsible for paying you the full rent amount.
Because the enforceability and application of joint and several liability provisions may vary by jurisdiction, consider consulting a local real estate attorney about how the clause should be addressed in your lease.
5. Termination Clause
A termination clause can identify lease violations or other circumstances that may provide grounds for ending a tenancy. Depending on the lease and applicable law, these could include failure to pay rent, certain safety violations, or prohibited activity at the property.
Landlords should understand the state and local laws governing lease termination and eviction, including any requirements for providing notice or giving a tenant an opportunity to correct a lease violation. The required process and time frames may vary depending on the reason for terminating the tenancy.
6. Lease Renewal
A lease renewal clause explains what happens when the original lease term ends. Depending on the lease and applicable law, the agreement may automatically renew, convert to another type of tenancy, or expire unless the landlord and tenant agree to renew it.
The clause may also address how and when the landlord or tenant must provide notice of their intent to renew or end the tenancy. Notice requirements and renewal procedures can vary by state and local law, so review the requirements that apply to your rental property when establishing these terms.
If the landlord and tenant agree to renew, the renewal may be documented through a new lease, lease extension, renewal agreement, or another method permitted under applicable law.
7. Use of Premises
A use-of-premises clause can establish who is authorized to live at the rental and how the property may be used. For example, the clause may identify the tenants and other approved occupants, address guest stays, and establish any restrictions on using the rental for business or other purposes.
Clearly outlining these terms can help landlords and tenants understand expectations for occupancy and use of the property. Because state and local laws may affect occupancy requirements, guest policies, and other restrictions, make sure the terms of the lease comply with the laws that apply to your rental property.
8. Surrender of Premises
A surrender-of-premises clause can outline a tenant’s responsibilities when the lease ends and the rental is returned to the landlord. The clause may address the expected condition of the property at move-out, cleaning requirements, returning keys or other access devices, and removing personal belongings.
State and local laws may establish requirements for handling property left behind by a tenant after move-out. Review the laws that apply to your rental property before establishing lease terms or procedures for abandoned belongings.
Review Your Lease Terms Carefully
The clauses you include in a lease can help establish expectations and address situations that may arise during a tenancy. Because lease requirements and enforceability can vary by location, consider consulting a local real estate attorney when creating or updating your lease agreement.
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Originally published on December 10, 2020, and has been updated.
