The Benefits of a Standard Lease Agreement
Many landlords use standard lease agreements, which can be helpful in the right situation. Most states issue a standard lease agreement as a guide for landlords, and there are other templates provided by the National Association of Realtors and other industry groups.
A standard lease agreement usually includes the following: Name, contact information for lessor and lessee, property address, term of the lease, rental rate, security deposits, and other such details. These forms are a great reminder of what must be in a valid lease, but there is more to consider. A standard lease agreement ought to be used as a starting point, not a final lease agreement. Below are some suggested lease clauses that you should consider adding to your lease agreements.
Suggested Additions to Standard Lease Clauses
- Severability
This clause, an important one, states that if one part of the lease is deemed to be illegal for some reason, the rest of the contract is still legally binding. - Subleasing
This clause details whether the landlord is comfortable with residents subleasing the apartment, and if so, under which conditions. These details should be included as part of the initial contract, before the resident might try to sublease to someone else. - Joint & Several Liability
This is one of the most common lease clauses, especially with leases that involve roommates. Each party to the lease is jointly and individually responsible for fulfilling the contract, which allows the landlord to go after all residents in the event of default, and prevents roommates from trying to blame each other. For example, even if just one person is responsible for damages, all are held liable. This encourages roommates to resolve issues together. - Renewal
Detail how the lease will be automatically renewed, if at all. Some lease clauses require the landlord and/or residents to give at least 60 days’ notice if they don’t plan to renew the lease at the end of its term. This clause can also be used to add an escalator (percent increase) that the lease will go up upon renewal (e.g. 2% per year). Including the escalator helps residents to anticipate rent increases so they aren’t caught off-guard. - Use of Premises
This clause details who can use the unit (e.g. only the residents listed on the initial lease) and for which purposes. The language might stipulate that any person staying in the property for more than 2 weeks in any 6-month period will be considered a tenant, rather than a guest, and that the landlord reserves the right to add that person to the lease agreement. Also, be clear about whether the unit is to be used solely for residential purposes, or whether it can be used for short-term stays (e.g. Airbnb) or commercial uses (e.g. resident who bakes goods to sell at a local farmers’ market). Be sure to check local regulations, as there might be laws regarding how residential units in specific zones can be used.