Things to Consider as a Landlord Before You Sign a Lease with a Tenant

Becoming a landlord has the potential to be extremely profitable, providing steady income and long-term investment growth. However, the journey from property owner to successful landlord involves numerous responsibilities, especially when it comes to signing a lease with a tenant. A well-crafted lease or a form provided by a lawyer that includes any specific landlord/tenant provisions specific to local or state law, is essential in protecting your interests and ensuring a smooth landlord-tenant relationship. Here are key considerations to keep in mind before finalizing that lease agreement.

1. Define Maintenance Responsibility

First and foremost, it is crucial to clearly define the tenant's maintenance responsibilities within the lease. Ambiguities in this area can lead to misunderstandings and disputes down the line. Common maintenance tasks that tenants may be responsible for include lawn care, snow removal, and minor property upkeep. Keep in mind that you’ll want to make it clear whether the tenant is supplying their own lawnmower or snow blower, for example.  If the lease doesn’t mention it and the tenant takes it with them when they leave, or it breaks down, you could have an argument down the road.  It’s also very important to be clear about what the tenant can and cannot do in the home.  Are they allowed to smoke - anywhere around the house? How many pets (and what kind) can they have?  Are you going to include a pet deposit?  Is the home within a homeowners association?  If so, are there any rules or regulations that a tenant must be sure to abide by that you should write into the lease clearly to avoid a fine that they will need to pay (e.g., picking up/taking out the trash by a certain time).  Also, from personal experience, it’s a really good idea to specifically write into the lease that tenants are not to put flushable wipes down the toilet.  They are not actually flushable and can cause problems with a sewer line - nuff said.  Clearly outlining the above mentioned duties into the lease ensures that both parties understand their obligations. This not only helps in maintaining the property but also fosters a sense of responsibility in the tenant, contributing to a more harmonious tenancy.

2. Renters Insurance

Another vital aspect of a lease agreement is whether you require the tenant to obtain renters insurance. Renters insurance provides coverage for the tenant’s personal belongings and can offer liability protection in case of accidents or damage. Requiring this insurance can be beneficial for landlords as well, as it adds an extra layer of protection for your property. Including a clause in the lease that mandates renters insurance can help mitigate potential risks and ensure that tenants are adequately covered in unforeseen circumstances. It also shows tenants that you are serious about protecting both their interests and your property.  If (real life example) your tenant fails to drain the dishwasher for months and the water eventually overflows and leaks into the unit below yours, the claim could/should be covered by your tenant’s renters insurance.  This is a great result all around because it was the tenant’s negligence that caused the leak and you don’t need to report the loss on your insurance, thereby (potentially) increasing your premium.

3. Clearly List All Individuals Over 18 on the Lease

The lease should also specify that all tenants are jointly responsible and that every individual over the age of 18 residing in the rental unit is named on the lease. This is a crucial point often overlooked by new landlords. Having all adult occupants listed on the lease ensures that each person is legally accountable for adhering to the lease terms. It prevents scenarios where an unauthorized individual lives in the home without being bound by the lease agreement. Joint responsibility means that if one tenant fails to meet their obligations, the other tenants can be held liable, which means that the landlord would be able to recoup what they are entitled to against one tenant, against any of the tenants on the lease.  This provides an added level of security for the landlord.

In addition to these key points, it's important to review the lease for overall clarity and comprehensiveness. Ensure that the lease covers essential aspects such as the duration of the lease term, rent amount, payment due dates, security deposit details, and policies on late payments and property access (all of which can vary state to state and sometimes even local jurisdictions can differ on lease provisions). A well-drafted lease should leave no room for ambiguity, providing clear guidelines and expectations for both parties. To further protect your interests, consider having a trusted lawyer review the lease to ensure it aligns with legal standards and adequately safeguards your property. Taking the time to thoroughly review and understand each clause in the lease can prevent many common issues that arise during a tenancy.

In conclusion, being a landlord involves more than simply finding a tenant and collecting rent. It requires careful planning and attention to detail, particularly when it comes to drafting and signing the lease agreement. By clearly defining maintenance responsibilities, requiring renters insurance, ensuring all adult tenants are named on the lease, and meticulously reviewing the lease terms, preferably with the assistance of a trusted legal professional, you can create a solid foundation for a successful and hassle-free landlord-tenant relationship. A thoughtful and well-prepared approach to leasing not only protects your investment but also sets the stage for a positive and productive rental experience.