Let’s face it; leases can be lengthy, complicated, and filled with hard-to-understand legal jargon. The leases that we know today originated in the early 1920s by landowners who needed income but didn't want to lose their property. Even though the wording can be a bit awkward and challenging to read, it's essential to understand your lease before signing on the dotted line. Every lease is different, with many of the clauses and addendums varying based on your state laws.
Lease Clause vs. Addendum
A lease consists of clauses and addendums. A clause is a provision written into the lease agreement. Lease clauses are usually written to comply with state and local landlord-tenant laws. These clauses are included to protect the rights of both the renter and the landlord. An addendum is a separate document added to the lease, containing additional information not included in the lease document, meaning they modify, clarify, or add something to the original lease agreement.
Common Lease Clauses
There are a handful of standard lease clauses that you should familiarize yourself with before signing your lease. Doing research beforehand will ultimately save you from conflicts in the future.
Severability
The severability clause states that if one portion of the lease is ruled invalid by a court, the remaining terms in the lease remain in effect.
Access to premises
This permits the landlord to enter the premises during specified hours, as long as they provide reasonable notice to the tenant.
Subletting
Subletting is when a tenant rents out their rental home to a third party but remains responsible for complying with the lease. Generally, the tenant must notify the landlord in writing of the tenant’s interest in subletting the unit. The landlord will conduct a background check of the party looking to sublet the unit before approving any sublet.
Lease termination
Typically, this clause states that if any lease violation or breach of the rental agreement occurs, it is grounds for terminating the lease.
Security deposit
A security deposit clause should consist of the amount that will be collected at execution and the terms on how the deposit will be held. The reason money can be deducted from the deposit should also be included within this clause. Lastly, how the deposit will be returned to the renter should be specified.
Pets
Landlords have the right to prohibit pets or restrict the type as well as the number of pets. You'll also find the fees associated with having a pet, which can be a pet deposit, pet fee, or pet rent. You may also need to include your pet's breed, weight, and vaccination records. Service animals are not considered pets and are always allowed regardless of pet policy, but this does not omit the tenant from paying fees associated with damages caused by service animals to the property.
Alterations and renovations
Many leases will state whether you can alter or renovate the property. Major alterations and renovations typically require consent from the property owner or manager unless otherwise indicated in your lease.
Excess usage by tenant
If utilities are included in the rent, this clause specifies that the tenant will pay the difference if there is evidence of utility over usage. For instance, if the electric bill is under $70 per month, the landlord will pay it on the renter's behalf. Whereas if the electric bill is over $70, the renter is responsible for covering the remainder of the bill over the set limit of $70.
Property inspections
Some leases include a "right of entry" clause that specifies the landlord has the right to enter the property for routine inspections and the amount of notice that needs to be given for entry to the home.
Use and repair liability
This clause lets the tenant know that they are responsible for repairs if anything is damaged due to neglect or abuse.
Renters insurance
Some properties require that the potential tenants have renters insurance. Renters insurance will cover your personal property in cases of major incidents or losses such as robberies, fires, floods, etc. This clause will specify the amount of coverage supplied by the insurance and the time range for the coverage.
Noise
Landlords may be required by state or local law to keep tenants from disturbing their neighbors. With this clause, the tenant agrees not to allow any excessive noise or activities in the property.
Knowing how to navigate your lease can be tricky, but it's essential to understand the clauses that are housed in your lease agreement before you sign. Hopefully this guide helps you better understand your lease agreement and prepares you for a successful lease term in your new rental.
