Leases - Lessons Learned
I was reading some forums and it got me thinking as I am creating my own lease. I've used several local PM companies leases to "learn" from. What have people added to leases after learning from the school of hard knocks?
I use to have my own which kept getting longer and longer but ever since I got licensed and started managing for other people I realized that the one put out by my local real estate board was pretty good and everything was enforceable. My attorney has no issues with enforcing anything because the lease has already been reviewed and approved by the attorneys for the real estate board.
I suggest using your local real estate boards lease, an attorney or realtor can give you a copy. And then what I have done is developed a Tenant Handbook which spells out all of my rules and or policies that are not covered in the lease. I tend to customize these Handbooks for each property or a group of properties based on different area conditions or different owners views.
@Dick Rosen beat me to it. If you need to get professionals involved for whatever reason (e.g. an eviction) 100% are going to know the "standard" VA form. 0% are going to know your proprietary lease. Same is true with small claims judges. They see the 'standard' form and instantly they know what applies and how.
I'm actually using documents from a local PM realtor company to create my own. Of course, they are all copyrighted and only for use by VA realtors. So, I'm creating my own learning from theirs. Longer and longer is the case. I'm up to 16 pages... The handbook I have created as well and view it as a "train your tenant" document. I also figured there were plenty of lessons learned from the BP community to include and educate others if needed.
I can't speak for VA but when I was in MN and not licensed, I got the state approved lease from my attorney, it was a fillable pdf file that worked very nice but did not allow any of the existing verbiage to be changed, which kept it standard. Anything else just goes in your handbook.
You can get the equivalent forms from other sources that have a licensing deal with VAR, like zipLogix , formulator, etc.
In NC, the NC Bar has jointly developed the forms. So NC is like MN in that capacity. Not sure about VA. But I did check zipForms and there are 40 or so VAR forms and addenda in their library.
Agreed. I started this thread to see what people have added to leases based on lessons learned from tenants as well. I will also check out ziplogix.
I use a traditional California lease and than I have altered it over time. I have had a lawyer look at it. I need to make more changes and have the lawyer look at it again.
Addendums
Continuation as Month-To-Month Tenancy after Expiration. On the expiration of the Lease term pursuant to subsection (a) above, the terms of this Lease will continue in the form of a month-to-month tenancy, increasing $300 a month on the last day of the lease except where prohibited by applicable law, regulation, or ordinance. The parties shall give notice and terminate the month-to month tenancy within the time allowed by law.
Delivery of Rent. The Tenant shall pay all Rent to the Landlord on or before the date that payment is due by Direct Deposit into the predetermined designated checking account
Late Fees: If the Tenant does not pay in full the amounts set forth in subsection (a) within 5 days after its due date, the Tenant shall pay a late fee of _________ (10% of rent).
Pet Fee: The Tenant shall pay to the Landlord an additional non-refundable fee in the amount of $50 per month, or one month’s security deposit of _________immediately on the Landlord’s approval of a pet or pets. Notwithstanding the foregoing, if any Tenant requires the use of a trained guide animal, signal animal, or service animal, no pet deposit will be required. The landlord reserves the right to apply the Pet Deposit in the same manor the security deposit can be applied too.
Tenant chooses (circle/initial)
A) No Pets on Premise – No Additional Fee,
B) $50 Non refundable Fee
C) $_____ one months rent as Pet Deposit- applicable as descried above
If an unauthorized pet is found on the premises a fee of $500 is due immediately for having an non-authorized animal on the premise at the time of occurrence or at landlords discretion. Any damage will be assessed separately and billed to the tenant in addition to the $500 fine.
Utilities: The Tenant shall pay all utility charges for services on the Premises including landscaping.
Satellite Dish Installation:The Tenant may install, at the Tenant’s sole expense, a satellite dish on the Premises, if the dish, its placement, and its manner of installation, and in all other respects, comply with the Federal Communication Commission’s Over the- Air Reception Devices Rule (47 C.F.R. Section 1.4000), as amended with LANDLORDS WRITTEN APPROVAL. Before vacating the Premises at the termination or expiration of this Lease, the Tenant shall remove the dish. If the Tenant does not remove the dish, the Landlord may remove the dish and deduct any removal and repair expenses from the Security Deposit in accordance with applicable state law or, the in Landlord’s discretion, the Landlord may leave the dish on the Premises and treat the same as a fixture thereof, subject to the premises of Article X of this lease.
No Smoking:The Tenant and the Tenant’s household members, invitees and guests may not smoke on the Premises. Any evidence of smoking will result in a $500 fine to the tenants due at the time or discovery or landlords discretion for violating the lease. Any damage will be assessed separately and billed to the tenant in addition to the $500 fine.
Maintenance:The Landlord shall maintain the Premises in good repair at all times. The Landlord shall, at the Landlord’s expense, maintain the Premises in a safe, habitable, and sanitary condition and comply with all laws, ordinances and regulations pertaining to the condition of Premises. Landlord reserves the right to only pay for repairs that he/she authorized in writing.
ALTERATIONS OR REPARATIONS BY TENANT: Except as expressly provided in this Lease or by applicable laws or regulations, the Tenant may not alter or make repairs to the Premises without the Landlord’s prior written consent. Unless otherwise set forth in this Lease, any authorized alterations or repairs, including any fixtures installed as a part of such alterations or reparations, will, at the Landlord’s option and in the Landlord’s sole discretion, become the Landlord’s property on the expiration or termination of this Lease; provided, however, that the Landlord may require the Tenant to remove any such fixtures at the Tenant’s cost on the termination or expiration of this Lease. The Tenant shall perform all authorized alterations or reparations to the Premises diligently in a good and workmanlike manner, and in compliance with all applicable laws, ordinances, regulations and rules of any public or private authority having jurisdiction over the Premises. The Tenant shall keep the Premises free of all claims for labor performed on and material delivered to the Premises.
PETS
The Tenant (including any guests or invitees of the Tenant) is allowed to keep the following as pets:
*
*
***No other animals are allowed on the premise without the Landlords WRITTEN
permission****.
Entry By Landlord: If at any point during the tenancy the landlord is denied access with proper notice provided to the tenant, the tenant will be accessed a $100 fine per occurrence at the time or discovery or landlords discretion for violating the lease.
LEASE TERMINATION PROVISION FOR MILITARY PERSONNEL: Subject to applicable state law, if the Tenant joins the military during the Lease term and is called to active duty for a period of 180 days or more, the Tenant may terminate this Lease by providing written notice and a copy of the military orders to the Landlord.
If, during the term of this Lease, Tenant or Landlord is a member of the U.S. armed forces and receives permanent change-of-station orders (more than 35 miles away from current duty station) or is deployed for 90 days or more, the Tenant or Landlord may terminate the Lease by providing written notice and a copy of the military orders to the applicable party. The Lease will be terminated 30 days after the due date of the next Rent payment.
Tenant Assumes Responsibility for the following Routine Maintenance:
- Granite and stainless steel appliances if applicable.
- Yard Maintenance (mowing, edging, feeding, seeding, maintaining sprinklers) but not all inclusive
- Tenant responsible smoke/CO detector, changing all the batteries and alerting (by written notice with a written response signifying the letter has been received) the landlord to when they are no longer in working orders.
- Tenants are responsible for all windows. Any damage to the springs is the tenant’s responsibilities.
- Any cracked tiles not outlined in the move in inspection
- Filters are the responsibility of the tenants. Any damage incurred to the AC system by filters or lack of will be accessed to the tenants.
Steam Cleaning: Tenant is required to professionally steam clean the carpet upon move out and provide the Landlord with receipts.
Professional Cleaning: Tenant is required to return the house in the manor such that it appears to be professionally cleaned. If there are any questions, Landlord reserves the right to professionally clean the house at the tenant’s expense.
Landscaping: Tenant is held accountable for all yard responsibilities. Tenant understands that if this house is located in an HOA and it must be kept to HOA rules. Tenant is responsible for watering the lawn per city code/HOA code. If the yard deteriorates due to mismanagement, tenants will be held responsible.
Landlords are not responsible for any fines that the tenant receives. All fines will be taken care of by the tenant immediately. Landlord using Tenants Security deposit will pay any fines not paid by the tenants on move out. A processing fee to equal to the total fine (including fees, penalties and any other charges) will also be taken out to compensate the landlord for handling.
House ______ IS or ______ IS NOT an HOA.
Keys, Garage/Gate Remotes: If Tenants or their guests: break, lose, damage, or lock themselves out pertaining to keys, garage or gate remotes. The tenants are responsible for any cost replacement, locksmith or other cost to rectify the situation. If the locks must be changed for any reason due to the tenants fault, the landlord must be informed and provided a set of keys immediately on replacement of locks.
Damages: Tenant is not responsible for normal wear & tear as assessed by the landlord. Damage due to lack of routine maintenance will be the responsibility of the Tenants for cost or replacement fees that will be assessed "AS" landlord notices and identifies them. If damage is caused because of tenants derelict whether direct cause or due to a non-reporting a maintenance issue than they will be held responsible for all damage.
On notification, the tenant is required to pay for the damages by the next rents due date.
All monies received, will first be accessed towards damages or fees. Rent will be accounted secondary.
Renter’s Insurance: Tenants are required to carry renters insurance in amount to cover their personal property and liability. Landlord assumes NO RESPONSIBILITY towards tenants, occupants or any of their guest’s personal property.
Buy Out: This allows either the tenant or the landlord to break the lease without penalty as long as they have provided 60 days’ notice and two months break lease fee (______). 60 days’ notice begins on the day that the fee is received. If the tenant moves out before the end of the 60 days’ notice, the additional days will be accessed as a fee. For military provisions please refer to XVIII.
Alterations: Any alterations/improvements/additions to the house (painting, ceiling fans, outdoor landscaping, etc) must have written approval by the landlord. All alterations/improvements/additions are at the tenants expense/liability and will become part of the house thereby being left upon the tenant’s vacancy. All work must be performed either by a licensed, bonded professional or in a similar manner. Any damage to the home due to the improvements will be assess/fixed by the landlord at the tenant’s expense. Landlord discretion at whether the tenant will be required to pay immediately upon discovery or at moveout.
The only exception is when the landlord requires the alterations/improvements/additions to be returned to the original condition. If the tenant fails to return it back to the original condition the landlord reserves the right to deduct it out of the security deposit.
Pest Control: Pest Control is the tenant’s responsibility with the exception of termites.
Home Business: Home Businesses are not allowed to occur within the house structure or on the premises. Violation is grounds for eviction and a $1,000 fine.
Attic Storage: No Storage Is Allowed in the Attic/Ceiling at Any Time! The house is not built structurally built for storage in these locations. Any items found in these locations will be immediately fined $500. The fines are automatically assessed and must be paid immediately or at the landlord discretion.
Additionally the landlord reserves the right to hire an inspector at the tenants expense to assess the possibility of any damage. Any damaged will be fixed at the tenants expense.
Fees/Violations: All fees are access first, rent second. Any late rent will be accessed a late fee and proceeded as set forth above.
I checked Zipforms but all of them have this on the bottom, so I don't think they can be used by an individual like myself.
COPYRIGHT©2011 by the Virginia Association of REALTORS®. All rights reserved. This form may be used only by members in good standing of the Virginia Association of REALTORS®. The reproduction of this form, in whole or in part, or in the use of the name “Virginia Association of REALTORS®”, in connection with any other form, is prohibited without prior written consent of the Virginia Association of REALTORS®.
I can't speak for or represent ZipForms as a company, but the idea behind this is that a licensed product (like the WVU flying WV) can be used (often times in limited or very limited context) by those who pay to use the license. The phrase "...prohibited without prior written consent..." is the key part, and if you pay, for example, Formulator (I've used them for NC forms) then you get restricted rights to use the form. There are restrictions on what you can do (per the details in the "prior written consent") so you can't sell the form, for instance,... but using it for your own leases is the general intent. Conceptually, then, VAR (or WVU) holds the rights, and licensed companies can distribute the forms (or logoed products).
Our "standard" lease in this area is only 5 pages long and doesn't deal with any issues that I have had come up. So I have a 16 page addendum that keeps getting longer and longer that I read to my tenants at lease signing. You need to make sure you have the clause that says if part of the lease is unenforceable, only that part of the lease is. My attorney who looked at my addendum had me change the legal fee clause to say that if the tenant loses a lawsuit, or breaks a lease provision resulting in me paying lawyer fees (such as to consult with a lawyer) that the tenant pays those fees. I know a clause like this is not allowed in some states but it is in Illinois. You have to be careful, I know in Wisconsin that if you say one of 7 forbidden things in your lease, the whole entire lease becomes unenforceable. It's very state specific.
I think another great thing to add to a lease is to make sure that you say that all existing due balances will be settled by received funds prior to being applied to the rent due.
Example: If someone has a late fee of $30 due on next months rent and they only pay the amount of rent normally due, you'd first apply $30 to their outstanding balance. The result is that tenants are basically forced into ensuring they cover all balances due or face an eviction notice.
We've recently added a clause that the Tenant shall keep the heat at no less than 58 degrees during colder weather and is responsible for emailing me if the home will be vacant for a period of more than 7 days (used to be 10 days).
My pet clause (I allow a well-trained family dog) has the name and breed of the dog and specifies no other pets, including guest pets, that vaccinations and licensing must be kept current, and that they certify their dog has had no previous signs of aggression to people or animals. (North Carolina is a state where the owner is not initially held liable for a dog bite or occurrence unless they have a history of aggression).
Renters insurance policy required with minimum $300,000 liability listing us as additional insured.
@Landon Elscott and @Lynn McGeein
Thank you. I think this kind of info will continue to benefit other people on this website. That's why I started this thread. All landlords can learn from other lessons that came through the good and bad times.
@Don Martin: I like the idea of a tenant handbook for each unit. That minimizes (hopefully) a lot of misunderstandings. I'm definitely going to use that concept. Thanks so much for the great idea.
I use the standard forms from Florida Association of Realtors which is fairly complete.
I do have a two page addendum.
One addendum pertains to all the appliances. It listed everything from refrigerator, microwave, washer, dryer, dishwasher, garbage disposer, central AC compressor, handler, water heater etc...with model, brand, serial number, and responsibilities. For example, in one unit I provided a garbage disposer, but I told the tenant when it dies, it will not be replaced or repaired, I will repipe the kitchen drain to get rid of it. Also sometimes tenants want their own appliances, such as a fancier dishwasher, and I would note that my dishwasher has been removed and their's is in use and their responsibility to maintain.
The other addendum deals with a list of minor items, such as:
How tenant payments are to be applied, first to outstanding damages, second to fines and charges from previous months, third to outstanding rent from previous months, forth to any outstanding charges and fees to the current month, fifth to court cost and legal fees, and last to the current month rent. I lifted this out of a BP post.
The need for them to secure renter's insurance.
In the event of a tropical storm or hurricane watch or hurricane warning, who is responsible to install storm shutters and how far ahead of time etc...
Operation and frequency of the sprinkler system - only for SFR properties.
Originally posted by @Sam Leon:In the event of a tropical storm or hurricane watch or hurricane warning, who is responsible to install storm shutters and how far ahead of time etc...
Operation and frequency of the sprinkler system - only for SFR properties.
I am curious what your storm/hurricane states. Good idea about the addition of the sprinkler system.