What's the best or most useful clause in your lease?

[Will Gaston]

All:

I'm about to begin the annual update on my lease for my student rental properties. What started out as 4 pages in 2006 is currently 17 pages long. And I expect it to fill 1/2 of the Library of Congress by the time I retire. 

It is extremely rare that students aren't willing to sign a lease because of a clause or section they disagree with. They either want the house or they don't. So I continue to add items in an addendum every single year. These may only be applicable to student rentals, but here are the 3 favorites from my lease:

• -The deposit on the property is 1/2 refundable and 1/2 non-refundable

I use the 1/2 non-refundable portion to pay for the lawn care as students aren't going to maintain the lawn. This system has worked well because the tenants see the value on why I'm doing it AND it doesn't affect the monthly cost of their rent. I've gotten close to zero pushback on this since I started doing it and it has been a huge home run.

• -Tenants must "opt in" and pay if they want pest control

Almost all of the tenants decide against opting in and paying for pest control and that's exactly what I want. We provide quarterly pest control to all properties regardless. If the tenants do happen to opt-in and pay for pest control, we will take the money and provide it monthly instead of quarterly. The purpose of this is not to increase revenue, but to dismiss the complaint that the landlord is responsible for any insect that ever comes in the house. "You had the chance to pay for pest control and you chose not to" is our stock response with pest complaints.

• -"As-Is" Addendum

This particular addendum has been invaluable for students, especially as most of them have never lived outside of a dorm. It specifically states the house is rented in "As-Is" condition and that landlord will make mechanical/safety repairs only and has discretion on any and all other repairs or improvements. It very clearly spells out: "What you see is what you get." This is probably the most important item I've added to my original lease.

It's been my experience that the lease is the most powerful management tool a landlord has and I'm looking for additional suggestions so that I can add to it. 

What are some of your favorite lease clauses?

[Justine Scheuher]

@Will Gaston lolol "And I expect it to fill 1/2 of the Library of Congress by the time I retire." too funny! Thanks for posting this discussion. Learning a lot for these comments!

[Jack B.]

Hands down, the most important clause in my leases: Month to month tenancy...

[Marcus Auerbach]

I'd like to offer a different perspective on the question and suggest to stay away from home made and even attoryney made lease contracts! 

Here is why: every time I buy a property or one of my clients buys a property with a tenant in place we are reviewing the existing leases. I sometimes find myself chuckling over a home made contract, because I can tell how it reflects one bad experience the landlord had in the past and they are now trying to avoid future pain they have suffered in the past. Stuff like "tenants are not allowed to have potted plants sitting on hardwood floors" - clearly there was an issue one time with water damaged floors, but next time they get damaged because their dog keeps spilling his water..

We use a set of lease documents (the lease, rules®ulations, lead based paint disclosure, smoke detector and CO2 detector notice, pet agreement) we buy from a specialized provider. There are a number of advantages to this. 

First: it's cheap and easy. 

Second: They are well known and state specific. Tenants and courts are familiar with the documents and that makes everyone comfortable (including the judge, who does not have to spend an hour reading your home made lease and then find's five things he does not like. It also saves you time, because most tenants have seen the docs before and don't have to read them word by word). 

And third and probably most important: the documents have been vetted, improved and refined over the years based on the mutual experience of countless disputes, case law and feedback on issues. So in a way they constitute collective knowledge and experience as well as best practice of a very broad audience including commercial users.