Not Every Lease Is a Good Lease
“I should have never gone to the office supply store and bought a generic lease for $9.00—I should have used a professionally prepared lease,” said the landlord as he was leaving the courtroom after a $50,000.00 judgment against him was handed down. Do you want that to be you?
Half the battle in providing expert property management is won by utilizing professionally prepared and vetted documentation. The other half is won through operational excellence—systematized and coordinated execution of tasks by highly trained personnel, which is a topic best left for another time.
As a landlord, you need to understand how vitally important it is that you have an attorney-reviewed lease. As a do-it-yourself landlord, you need to go to an attorney and have a custom lease prepared. If you use an expert property management company, they will take care of making sure the proper paperwork is used.
Always Check with Your Professional
What follows is a general discussion of some things you might want to consider addressing in your lease documentation; this list is for conversational purposes only and is not intended to constitute legal advice. Always consult with your legal counsel.
First, What Is the Purpose of a Lease?
In simplest terms, a lease document is a written set of rules agreed to between a landlord and a tenant regarding the rental of a property. The less specific the rules are, the more leeway the parties typically have to do what they want. The more specific the rules are, the less freedom the parties generally have to do what they want. Also, state laws generally define certain, rights, duties, and responsibilities of the parties to a lease, regardless of whether or not these were explicitly written into the lease document, so it is vitally important to know and follow your state’s Landlord-Tenant laws (In Florida, F.S. 83).
By no means is this list exhaustive—or all-inclusive—but serves only as general points of consideration:
- Parties: Names the specific parties entering into the agreement.
- Term of Lease: Identifies lease start and end dates.
- Occupants: Names all of the people authorized to reside in the property.
- Rents Due: Identifies the amount of rent due and the time intervals for payment.
- Security Deposit: Identifies the amount of security deposit and general terms under which it is held.
- Payment of Rent: Identifies where, how, and to whom rent payments are to be delivered.
- Terms of Renewal: If you want a renewable lease, the conditions for such go here.
- Rent Escalation upon Renewal: If you want a rent increase upon renewal, the terms for such go here.
- Additional Rents: Some would call these late fees. The terms for such goes here.
- NSF Fees: What are your rules and terms for bounced/returned checks?
- Legal Notice: Statement regarding legal notices from landlord to tenant.
- Assignments, Subletting, Early Termination: Rules concerning assignments, subletting, and early termination of the lease goes here.
- Vehicles: Will you allow your property to be turned into a parking lot? Acceptable vehicles go here.
- Fixtures and Alterations: Rules regarding tenant alterations and additions to the property goes here.
- Damage to Premises: Who is responsible for damage to the property caused by a tenant or tenant guests, and how will repairs be handled?
- Termination Due to Sale: If you sell the property, what terms have you agreed to regarding the existing lease?
- Right of Entry: When is the landlord allowed to enter the property and under what conditions?
- Default: What happens if a tenant is in default of the lease terms?
- Attorney Fees: Who pays for attorney fees if there is a legal dispute arising from a breach of lease terms?
- Utilities: Who pays for which services?
- Lawn and Shrubbery: Who is responsible for maintaining lawn and shrubbery? What constitutes “maintaining”?
- Risk of Loss: Who is liable if the tenant’s property is damaged while on the premises?
- Tenant Maintenance and Repair: Is a tenant obligated to perform any maintenance items? If so, spell it out in the lease.
- Use of Premises: A general clause regarding the expectations regarding the allowed and disallowed uses and upkeep of the property by the tenants.
- Condemnation, “Acts Of God”: What are the rights/responsibilities of the parties if the property becomes unusable during the term of the lease?
- Return of Security Deposit: What must the tenant do in order to receive a return of the security deposit?
- Abandoned Property: What happens to personal property left behind by a tenant, and who is responsible for it?
Conclusion
The more specific your lease documents are, the less room there is for future misunderstandings between parties. Always make sure that your lease terms comply with state and local laws and regulations. Always have your lease documentation prepared/reviewed by competent legal counsel or expert property management personnel.
About the Author
John Michailidis, JD, is a graduate of the Northwestern University School of Law in Chicago and is the Broker/Managing Member of Real Property Management of Sarasota & Manatee, a Sarasota, FL based residential property management company. Real Property Management of Sarasota & Manatee provides both Full-Service and Lease-Only services to greater Sarasota, Bradenton, Venice, and North Port area landlords. If you own residential investment real estate anywhere in Manatee or Sarasota counties, do feel free to reach out to our team at 941-216-0005, or through our website.
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