The Lease that Kills (Your Business)
October 1, 2010
I found a free lease on the internet. All I had to do was download it and print it off. Then I won’t ever have to pay for a lease form again! Wow!
I didn’t even have to search hard for the lease. I believe it was the first one I came across. This lease has a problem, though. Included in its six pages of 10-point type are 29 errors, each of which could mean the end of a landlord’s business.
I did have ulterior motives for looking for and finding that lease. It was research for my new landlord manual Leases: Traps and Pitfalls. In that manual, I point out the dangers of using a lease that was not written specifically for the state the rental property is in. Those leases can be illegal, unenforceable, voidable or maybe all three.
You see, here’s the problem. Every state’s landlord-tenant law is slightly different. Those differences range from little things such as how long a landlord has to make repairs and how much notice a landlord has to give before entering a rental property to big ones such as how late fees, and security deposits must be handled. Trouble is, bad tenants, who often know the law much better than landlords do, can use even “little” mistakes by a landlord to get to stay rent free for two or three months. Don’t believe me? Read your state’s landlord-tenant law.
What happens, then, when a landlord uses a lease full of illegal or unconscionable clauses. If the landlord has rented to a bad tenant, that tenant will be dancing around the living room in glee to Blondie’s “One Way or Another,” calling his friends to come over for a huge celebration that will likely do major damage to the property, and planning how to spend the rent money he won’t have to pay for several months.
What were those 29 errors in the “free” lease? They range from clauses that are in direct violation of the laws of some states to sentences that are unclear or ambiguous.
One of the most egregious, and one that could result in a landlord being the biggest loser in a Fair Housing complaint is paragraph four, which reads “Tenant agrees to use said dwelling as living quarters only for _____ adults and _____ children.” Not only will a bad tenant be dancing in glee at that one, but so will the Fair Housing enforcers.
Then there’s paragraph 22F, which reads that the tenant will,
“Allow the Landlord or his agent access to the premises for the purpose of inspection, repairs, or to show the property to someone else at reasonable hours, and to specifically authorize unannounced access anytime rent is late.” In addition to the grammatical error, that clause is a guarantee of the tenant getting to stay rent-free.
This lease contains 27 more errors that could mean the end of a landlord’s business.
If this were the only lease that endangers a landlord’s livelihood, that would be a simple aberration. But many other leases available either free or for sale do exactly the same thing. You can obtain acceptable leases from the internet or the local office-supply store, but you will have to pay for them. And even at that, just to make sure, you will need to thoroughly check the lease against your state law. The most common errors in one-size-fits-all leases have to do with notice procedures, especially for tenancy termination and property access, and security deposits. Those are the most likely things to differ from one state to the next. But even if the termination and access clauses are correct, others could crop up that a bad tenant would spot immediately and delight in. You see, checking the lease yourself assumes that you know your state’s landlord-tenant law perfectly and that you would spot any error, right down to a misplaced comma.
The best idea is to buy a lease form from your local landlord, rental owners or apartment association. That will be one that was drawn up by attorneys that know your state law backwards and forwards. Oh, by the way, in case you didn’t know, the pertinent lyrics to Blondie’s “One Way or Another” are the bad tenant’s mantra, “I’m gonna getcha, getcha, getcha, getcha.”