By Robert L. Cain
It is the most important document in the rental process. Its completeness can determine the success of a tenancy. It will let both parties know exactly what is expected. That is, it does that if it is drawn thoughtfully and effectively. That document is the lease or rental agreement.
It is what both the landlord and tenant sign when a tenancy begins. Of course every state law provides for many of the clauses in the rental agreement, but we want there to be no question in either the landlord’s or tenant’s mind about the duties and expectations of each side of the agreement. What we’ll look at here are five things right at the top of the lease agreement that can either confuse or avoid confusion of both parties’ intentions. Some people, of course, make it a practice to “misunderstand,” but there is nothing we can do about that. If it is in writing and the tenants sign though, there can be no claim of “misunderstanding.”
I am looking at a lease agreement from my state’s Rental Owners Association, but every lease agreement worth its salt contains each of the clauses we will look at here.
Some people, of course, make it a practice to “misunderstand,” but
there is nothing we can do about that. If it is in writing and the
tenants sign though, there can be no claim of “misunderstanding.”
Sure, you say, “I put the address in.” But is it the complete address? For example, 1234 Main St. is an address, but it is not the complete one. Suppose the tenant is renting 1234 Main St., Apt. 7. If the address on the lease leaves off the apartment number, does that mean he or she is entitled to occupy any and all apartments at 1234 Main St.? Only a fool would think that, but bad-tenant lawyers have been known come down on the side of foolishness to try to make a case that the address on the lease is incomplete and thus the eviction notice is invalid. And there are tenant-friendly judges who would agree. While you’re at it, add the city, state, and zip code.
Thus the wording of the address needs to be 1234 Main St., Apt. 7, Anytown, XY 98765. Then there’s no question about the address.
“Jointly and severally”
Those words are especially important when renting to roommates, but need to be included even when renting to couples. Jointly and severally means that each tenant is completely responsible for the rent and damages. How many times have you rented to roommates and received only partial rent with the explanation that Joe or Mary didn’t have his or her share of the rent. Jointly and severally means “too bad, pay it all or move.” How many times have you surveyed damage and heard that Joe had a party and his guests did the damage? Jointly and severally means “too bad, everyone owes for all of it—pay it or move. It’s up to you to work it out with Joe.”
Explaining that concept to all tenants at move-in is essential because they almost always don’t know what “jointly and severally” means.
Whom is that you are renting to? The lease agreement I have contains spaces for four names, and since it is a Word document, it is easy to add more spaces. The wording on the lease is that the property at the address is “to be used solely for the purpose of a personal residence and ONLY by the following people.” Then there are spaces for each name. If some of those people are children, list those names, too. It can’t hurt. That means if the tenants move more people in, they are in breach of the lease.
I made the mistake many years ago of renting to a group of single people in their early 20s who thought it was okay to just move in anyone they wanted. The lease they signed was clear that only they were to occupy the property and that anyone they moved in would have to fill out a rental application and be approved by me. They ignored that clause and when I asked for a rental application from the “new” tenants, they ignored me. I came back after a week and asked for it, and they made some remark about losing the application. I went out to my car, fill out a 30-day, no-cause termination and went back in and handed it to one of the erstwhile legitimate tenants.
Dates and times
When does the lease begin, and when does it end? Without specific dates and times, it can be ambiguous, or will “seem” to be in the minds of tenants determined to misunderstand. The term of `12 months begins on October 1, 2015 at 12:00 AM and ends on September 30, 2016 at 11:59 PM. Usually there is a clause later on where the lease reverts to month-to-month after that, but that is beside the point here. The times are just as important as the dates. If the lease is over and at 12:15 AM on October 1, 2016 the tenants are still there, they are in breach and owe another month’s rent.
Where and how to pay the rent
Believe it or not, some lease agreements that you can get free off the internet or buy at Office Depot don’t ask for this information. Where does the rent go? If it is the landlord’s address, then it needs to be just as complete as the property address, physical address, city, state, zip code. If there are special instructions for rent payment, those must be clear on the lease, too.
When is just as important. If it is due on the first of every month, the lease needs to read “the rent shall be $XXX per month, payable in advance, on or before 11:59 PM the first day of each month.” After that it is late and a late fee of $XX per day for each day after the third day of the month is due. Each state law deals with the grace period for late differently, so it is important to know exactly what that is.
Those are five things that not only must be included on the lease agreement but also included as completely and definitively as possible. The completeness of the agreement can make or break an eviction should that be necessary. A few more keystrokes can protect landlord against “misunderstandings” and lets tenants know what is expected.