7 Extraordinary Lease Clauses That I Can’t Live Without

Written on August 3, 2015 by , updated on August 4, 2015

7 Extraordinary Lease ClausesMost standard leases will include basic information about the agreement, such as property address, dates, names of tenants, rent amount, security deposits, etc. However, the Devil is in the details.

Most experienced landlords will tell you that the Devil is in the details.

The real headaches come when a situation arises that is not addressed in the lease. By that point, the landlord is emotionally involved in the issue, and can’t truly be objective in his/her decision on how to handle it.

To help you prevent some headaches, I’ve listed seven of my favorite (and useful) lease clauses in the section below. 

These clauses have saved me dozens of hours of correspondence, and thousands of dollars in legal drama, simply because I put them in the lease.

With that said, I am not a lawyer so you should consult with a licensed local attorney before using these in your own leases. You are responsible for performing your own research and complying with all applicable laws in regards to your unique situation.

1. Severability

Though a legal precaution, this is perhaps one of the most important clauses in a lease. This clause states that if one aspect of the lease is found to be illegal, the rest of the agreement will still be legally binding.

Without this clause, a judge who has found one small clause to be illegal, even if accidentally so, might consider the entire lease to be void. No matter how rock-solid your lease is, you should include this clause in your lease.

2. Late Fees and Allocations

Though I’ve never had a late rent payment since I started using Cozy to collect rent, I always include this clause – just in case my tenant turns rebellious.

Further, if you don’t specify a late fee in your lease, it will be nearly impossible to charge a late fee after-the-fact.

Please check your state laws because some have statutes that require a specific “grace period” and limit the amount you can charge.

Regardless, this clause should specify the exact amount of the fee, the time at which it will be assigned, and if there are any additional, daily late fees for nonpayment.

The last sentence in this clauses ensures that all fees are paid first with whatever money the tenants choose to give me. The reason I allocate payments first to fees is because it’s much easier to sue a tenant for “unpaid rent” than it is for an “unpaid late fee.”

3. Subleasing

If you don’t outlaw subleasing, your tenants will do it when you’re not looking. Worse, you can’t penalize them for it.

You might be able to terminate the lease, but that’s not always preferable because then you have to find new tenants.

I always prefer to allow subleasing, for a price. I give my tenants the option to sublease, but they have to pay a one-time fee. Further, the sublessee has to submit an application and is subject to my normal screening process and subsequent approval, only to eventually sign a subleasing agreement.

Subleasing is common with my group houses. Many times, three of the five tenants will travel home for the summer and ask to sublet their room.

The answer is always “yes” and then almost instantly, my wallet feels $900 heavier. To help with the subleasing fee, many of the tenants increase the cost of their room, thereby offsetting the fee (which I’m fine with).

Related: The Landlord’s Guide to Tenant Screening

4. Joint and Several Liability

In respect to a residential lease, joint and several liability means that each tenant is jointly AND individually responsible for the entire rent amount and for any damages.

It allows you to consider all tenants as a single entity, for the purposes of giving notice, serving court documents, collecting rent or suing for damages.

Related: What is “Joint and Several Liability” and Why You Need It

5. Default

Many states have a set list of landlord and tenant obligations, in which either party can terminate the agreement if the other doesn’t fulfill his or her duties – with proper notice.

I go a step further and actually list the triggers for default in the lease, so that the tenant is aware of them. The logic is that if I ever have to terminate the lease for a violation, the lease should back me up.

As you may have noticed, upon default, I force the compiling of rent for the remainder of the lease term. Meaning, if my tenants start selling drugs from my rental in month three of a 12-month lease, I can still hold them responsible for the other nine months of rent (or until I find a replacement if I’m forced to mitigate damages).

Related: Landlord-Tenant State Laws and Regulations. Your state will have their own rules about how many days are required before you can terminate the lease after nonpayment or a lease violation.

6. Renewal

Lease renewal is a tricky thing. Some landlords prefer an automatic renewal approach, however, I prefer not to be tied down like that.

All of my fixed-term leases don’t automatically renew, however I still require a tenant to give me 60 days notice of their intent to move out at the end of the lease. Meaning, the assumption is that they will be renewing (assuming the rent doesn’t go up too much), even though the lease doesn’t automatically renew.

It just means that we need to sign a new lease if they want to stay.

The reason for this clause is that it guarantees that I have 60 days notice to try to find a new tenant. If they fail to provide 60 days notice of non-renewal, they are still held responsible for 60 days of rent, unless I can find a replacement sooner.

I usually set a Google calendar reminder, and I try to notify my tenants of their responsibility at 70-75 days from the end of the lease – so that they can start thinking about their options.

7. Use of Premises

Though I can’t discriminate based on familial status, I can restrict the number of people based on the number of people in the initial group of tenants. Meaning, if a family of four moves in, the lease should restrict usage to only those four people.

This clause keeps existing tenants from moving in unapproved “family” (yeah right), and keeps unemployed boyfriends or girlfriends from becoming rogue tenants.

BONUS: Surrender of Premises

Last but not least, this clause saves the day every time I have a tenant moving out.

A few weeks before they plan to move out, I simply remind them of this lease clause and send them the “move-out cleaning instructions,” which details my expectations and suggestions to ensure they get their full deposit back.

Where can I get a Full Lease?

Though I think these clauses are helpful, they are not a complete lease.

There only four websites that I recommend for premium, state-specific leases.

I, nor Cozy, are NOT affiliated with any of these companies. I just think they have excellent state-specific residential lease templates. You can read more about them on the Landlord Directory page.

Pay it Forward

Congratulations on reading the whole article! At 2,472 words, it’s about 4 times longer than my normal.

I’m curious to hear your stories. What are your personal or favorite lease clauses and how have they helped you with your rentals?

Let me know in the comments section below.

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96 CommentsLeave a Comment

  • Barry Scovel

    Hi Lucas, We thought we had a good handle on our leases! Now time to take a look at them, and see how they stack up. Good points that I may have forgotten or never known. Several years back, after I didn’t specifically say No Pets…I signed the lease and out in the tenants car as I passed it.. was a REALLY big dog. Lesson learned…

  • Al Williamson

    Wow – this is really good. I’ve been skimming over these terms without know the full meaning. Thanks for the breakdown.

  • Susan b barry

    Have a lease that says no locks and no ro heaters. Judge allowed lock to stay, let me in to inspect that heater was removed, which it was that day. When electric bill came on the quarter it was obvious it was back. Courts in massachusetts suck. next tenant didn’t pay for two months. I was given a judgement. Big deal, he still hasn’t paid. Get a ss# so at least you can report it to credit bureau. Here we have to pay for tenant to leave after eviction. Tenants have all rights. Doesn’t matter what you have in writing.

    • DAN HUNTER

      HI SUSAN, YOU MENTIONED THAT YOU WERE GIVEN A JUDGEMENT AND TENANT STILL HASN’T PAID. IN MOST STATES THE DEFENDANT GETS 30 DAYS TO PAY A JUDGEMENT. IF IT’S NOT PAID THEN IT’S YOUR MOVE. YOU CAN GARNISH WAGES, HAVE THE BAILIFF REPLEVIN THEIR CAR OR OTHER POSSESIONS (BOAT, CAMPER, ETC.) AND/OR GARNISH BANK ACCOUNTS, ETC. I’M NOT AN ATTY. AND THIS IS NOT LEGAL ADVICE. GOOD LUCK !!!

      • Susan b barry

        Thank you. I’m glad to have my room back. my pets are safe. Everything else is just stuff. Just stuff. I will try courts one more time.

    • Joyce

      Best way to not have these issues is to screen tenants thoroughly and make sure their FICO scores are high and they have enough income to easily cover the rent. I learned the hard way, but now know that SCREENING is the most important rule in renting your units. It’s not totally fool-proof, but the more thorough you are, the better your chances of getting an excellent tenant.

  • Munro Merrick (SBN 73811)

    Late Fee: Many, perhaps most, judges do not consider Late Fees as “rent”. That means that in preparing a 3-day notice to pay or quit, you cannot risk asking for the late fee because if the judge says it is not rent, you have to start over. Therefore, you want the judge to call it rent.

    Therefore, on page 3, line 5 of the late fee section, after late fee (I would delete the quotation marks), insert : as additional rent. And in the next paragraph, delete “such as late fees”.

    Page 5: “several Liability”. That is a common term in contracts, and lawyers know what it means. I would prefer the phrase: “jointly and individually” liable. I think it also makes it clearer when you have a officer signing as a corporate rep & individually.

    • Lucas Hall

      Hi Munro,

      I’ve heard the same thing from other folks – that you shouldn’t worry about trying to collect late fees. Just go after the unpaid rent and you’ll have an easier time winning over the judge.

      Your suggested changes have been implemented into this article. Thanks so much!

      • Ann I

        Some PM’s/ owners make sure that the late fee, if owed, is paid before rent when the tenant makes a payment. That way, the “additional rent” (great terminology, btw) isn’t as much of an issue if a judgement needs to be issued in the future.
        Lucas: Thanks so much for providing valuable information- it’s the most complete site I’ve ever seen. Thanks as well to landlords who share experiences. There’s always something to learn in this business!

    • Walter K.

      Late charges can be used as a bargening chip but judges will never allow a tenant to be evicted based on late charges regardless of the amount. Other way around it is to have a language in your security deposit clause that allows Landlord to use security to cure tenant’s default and then sue tenant for replacement of security as additional rent. You should still include late charges in your demand notices as some judges will allow you collect some late charges.

      • Lucas Hall

        That’s really great advice Walter!

      • Munro Merrick (SBN 73811)

        The magic words, “additional rent.” If the lease state that lte charges are additional rent which the tenant is free to choose — it is his option — I think our judges in San Diego woujld not hesitate to allow late charges to be added to any3-day demand to pay rent or quit. I have not tried the payment from security deposit, and then demanding replacement, but I see n o reason why that would not work also.

  • SYR

    Gr8 article. I only have one unit and been refining my lease over the yrs too. I write contracts in procurement for a living so I know the power of a good contract (solid ts and c’s ) from the start. I’ll be updating my lease before the next tenant with your advice.

  • Cox

    Great article, and I will be updating my agreements THIS WEEK!!!

    Thank you again,

    (re your comments about the length of this post, 2600 words, for me no problem BECAUSE you have made them into a great article. More More!! Please . Another thing I like, you are willing to take on the comments of others, and/or explain without egotistical slant why you agree or not. very refreshing.

    Keep the info flowing.

  • Celenia

    If there are pets I include name and description of each pet (instead of just stating “pets ok” or “1 dog”) so that if that pet should leave or pass away it doesn’t automatically mean they can now get any pet they want

  • AS

    Hello Lucas – thanks so much for this information. I’m a first-time landlord in Virginia, and wanted to make sure I understood your “Default and Compiling of Rent” clause completely. Specifically, this statement:

    “If Tenant(s) fails to pay rent when due and the default continues for five (5) days thereafter, Landlord may, at Landlord’s option, declare….”

    For example, if a lease requires payment on the 1st of the month (with no grace period) – and the default period starts on the next day, the 2nd – does this clause state that the Landlord may declare that the remaining balance of the entire lease be paid if the rent is still unpaid by the 7th of that month? If so, that’s a heck of an incentive. :)

    Thanks!

    • Lucas Hall

      Hi AS

      That’s basically the gist of it. In VA, the amount of notice required to terminate a lease for nonpayment (AKA default) is 5 days. http://law.lis.virginia.gov/vacode/55-225/

      Therefore, the clause you mentioned says that on the 2nd of the month, when rent is not paid and there is no grace period, a landlord can give a 5 day notice to pay or quit. If the tenant fails to pay or move-out within those five days, then the lease is officially terminated. The added incentive is that because the tenant defaulted, the landlord can still sue for the full remaining amount due on the lease (compiling of rent).

      However, realistically in many states including VA, a landlord must mitigate damages to the tenant. This generally means that the landlord must try to find a replacement tenant, and can only old the former tenant responsible for the rent up to the point when a new tenancy starts.

      But I suppose if there was only a month or two left on the lease, the old tenant could be responsible for the rest of the sum.

      I hope that helps. Please know that I’m not a lawyer, nor is this legal advice.

      • Walter K.

        No judge will sign off on eviction
        If tenant is late on rent few days and now is being sued for the back rent plus the balance of lease term.

  • Carol

    Somewhere (I can’t find it now) a fellow was commenting on the return of security in NYS. Outside of New York City, which has some specific laws for rent controlled apartments, New York landlords have no statute for the length of time one has to return a security deposit. It says “reasonable time” as per the State Attny. General. We are not subject to 30 days with a written list of items which are deductions from security. There is also no non-compliance “double security” etc.

    I just went through this with a PA landlord (of my college age daughter). He did not provide his list within 30 days and was unable to make any claims on security deductions.

  • Carol

    I also want to state what may seem very obvious: last spring I was getting ready to start the eviction process. The town constable (a type of sherrif) told me to go through my lease with a “fine tooth comb” and compile a list of defaults. The more defaults a tenant has, the more likely a judge will be to side with the landlord.

    So thanks to you Lucas and particpants on this site for helping us all stay informed!

  • Zoe

    I have a tenant wanting to rent a separate unit and use it as a second very small business with clients coming, perhaps a couple times a week. How would you recommend I extend the private use and liability clause? Is the following which I have written sufficient? Thanks for your thoughts!
    “If any part of the Premises shall be used at any time during the term of this Agreement by Tenant for the purpose of carrying on any business, profession, or trade of any kind, or for any purpose other than as a private single family dwelling, tenant assumes all liability for any issues or expenses arising from such endeavors including contracts undertaken with third parties.”

    • Lucas Hall

      Hi Zoe,

      I can’t really give you legal advice on that verbiage. However, if I were going to do something like this, I would require proof from renter’s insurance for the personal dwelling space, and I would also require him to to get business liability insurance for a min of $300K.

  • Zoe

    Many thanks for your thoughts. Good suggestions. (I liked the general clauses you suggest in post as well.)

  • Dan Kelly

    I have a tenant that would not pay her city utility fees on time and they would let her go 2 months. before they would shut off water. Now the city require the new customer coming on to there system they have to pay at least 2 month deposit to cover the utilities if they have to shut them off this all came from me notify the city that the owner and management would not be responsible for what the city allowed them to do, by not paying on time. Now we are not hung out for the city charges or lack of collecting them.

    • Lucas Hall

      Hi Dan,

      Generally speaking, a property owner is always on the hook for the water and sewer bill. My only advice to you would be to settle up with the utility so that you don’t get a lien put on the property.

      If the tenant was suppose to pay the bill, but didn’t, you might have to take them to small claims court for the difference. I don’t agree with it, but that’s just the way most water bills work. Here’s a helpful article on it: https://www.landlordology.com/monitor-bills-property-liens/

  • Luis Esteban Caballero

    Thank you Lucas, we are nearing the end of our first eviction and Landlorology has been a great help.
    I look forward to using COZY for my next tenants screening process.

  • Carol

    On a little different note, still on leases; does anyone require your tenants to obtain rentors insurance? My current leases say “it is recommended” . I don’t require it, but one of my tenants said she just bought rentors insurance and she is covered for $100,000 liability for accidental harm as well as for her belongings. Seems like it would help mitigate some of my liability, sure can’t hurt!

    • Lucas Hall

      Hi Carol,

      I do require it on some properties. I think it’s a wise idea to require it. I’d recommend that the tenant get a minimum of 300K in liability. $100k isn’t going to go very far in a liability lawsuit.

      Further, I think it’s wise for a landlord to get umbrella insurance for $1M, which will cover you above and beyond your property insurance in case anything severe happens. Cheers!

  • Niccigreen

    Hi. I was wondering if I am required to hand over a 30-day at the end of a year lease if I plan to not renew.

    I’m a landlord in California.

    Thank you.

  • Dave Morgan

    TOBACCO: Tenant agrees and understands that the consumption of tobacco and or similar products such as smoking or vapor is not allowed within the tenant premises and may be limited to areas outside of the building so designated by Landlord.

  • F. Davis Quarles

    Hi Lucas,

    I’d like to thank you for the wealth of knowledge and experience you have openly shared with the landlord community. Your site has become a go to resource for the many rental questions that arise. I just wish I had found your site sooner.

    I also appreciate your advocacy of cozy, and am actively introducing my tenants and applicants to the service. To that end, I was wondering if you could provide the clauses you use for your cozy tenants?

    • Lucas Hall

      Hi F. Davis

      Sure thing – but PLEASE realize that this clause might not be allowed in your state, or locality. This is just what works for me, according to my state laws. Please talk to a lawyer before use it (which I am not).

      “Landlord requires that rent installments be paid through COZY SERVICES (https://cozy.co) – a secure online payment processing website approved by the Landlord. Landlord reserves the right to discontinue this service and require at any time that Tenant(s) pay all rent and other sums by certified check, money order, personal check, or other method, following the same schedule and due dates. No personal check from a person or entity who is not a lessee or approved occupant will be accepted.”

  • Renee Bourgeois

    I am considering attaching a photo of all tenants, (including any pets), to my lease and Cozy account, thereby eliminating any confusion of who was and is included in original lease contract. Any thoughts on this?

    • Lucas Hall

      Hi Renee,

      Who’s confused? Is this just to help you keep things straight, or are your tenants arguing with you about who’s specifically on the lease?

      In Cozy, each tenant’s profile/application will have a picture (if they uploaded one of themselves).

      As for attaching a picture to your actual paper lease, I had never thought of that, but sure, sounds like a good idea.

  • Alf M

    I’ve been renting a room in an apartment for more than 3 years now. Yesterday, Jan. 23, 2016, my Roomate who is in the lease had his former Roomate moved in at the living room. I asked the the new person what his condition is and he said he us going to pay $600 for the whole living room. My roomatedidnt communicate nor even write anything on the said situation. I’m paying $500 with the bathroom and garage included, me and my Roomate are not into talking. For the last three months I’ve been only at home for about 6 days as I lost my job but is continuing on my applications in other cities. I’ve started packing about 4 months ago but had not really moved out since I wanted to just stay in this apartment even if I landed a job in other area

    • Lucas Hall

      Hi Alf,

      If you aren’t on the lease, than any tenancy you do have will likely be considered month-to-month, if not an unauthorized sublet. If you don’t have a lease with your roommate, he could change anything about the agreement with very little notice (usually 30 days). The bottom line is that I don’t think you have much ground to stand on without a lease. Good luck to you. Please know that I’m not a lawyer, nor is this legal advice.

  • Cathy

    Thank you for this article! We’ve only been really land lording for a couple of years, but with every tenant I find new holes in my lease agreements. Thanks for the info–I’ll be sure I’ve included each one of these on my upcoming lease.

  • Joe T

    Hello,
    Great resource. Thank you for taking the time to build this out.

    In the “Use of Premises” section, is it permitted to list out the occupier’s names?
    Something along the lines of:
    “The Premises shall be used and occupied as a private dwelling only by the following individuals: _________________ .”

    Thank you
    Joe

    • Lucas Hall

      Hi Joe,

      You certainly could do that. I think it’s a good idea to mention all the occupants by name, even the children – even if those occupants aren’t technically responsible for the lease.

  • Joe T

    Lucas,
    Thanks for the prompt response yesterday. I hope you can help me with another question – that of lease renewal.

    I see your sample clause above. However, it does not seem complete to me, in that I would like to clarify that a 1-year lease, if not renewed by both parties by signing a new agreement, will become a month-to-month lease.

    New Jersey law as stated in the NJ Lease Information Bulletin (http://www.state.nj.us/dca/divisions/codes/publications/pdf_lti/lease.pdf) appears to have contradictory statements. In one, it says “Yearly and month-to-month
    leases will automatically renew for another term unless a valid notice to quit is given by the
    landlord or unless the tenant gives notice to the landlord…” But it also states: (TBC)

  • Joe T

    (.. continuing..)
    “If the tenant or landlord does not renew the lease and the lease was for a term of more than one
    month and the tenant holds over (stays after the expiration of the lease), the tenancy will become
    a month-to-month tenancy, if the landlord continues to accept the rent and there is no other
    agreement between the landlord and the tenant…”

    So, which is it – automatically renew, or month-to-month? Like you recommend, I would prefer the latter. So, how to word this so as to make it clear?

    Thanks so much!
    Joe

    • Lucas Hall

      Hi Joe,

      Great question. I’ll try to explain.

      There are two types of tenancy. A “fixed-term”, and an “at will” tenancy.

      An “at will” tenancy automatically renews – always – for the term is was set. It does not have an end date, and in order to prevent it from renewing, the landlord or tenant needs to give proper notice to terminate.

      A fixed-term never automatically renews because it has a “fixed” end date. It certainly can be renewed, but some sort of action needs to happen by the landlord and tenant.

      The confusion comes in when someone refers to a “yearly” lease. Sure, most fixed-term leases are for a year, but that’s not a “yearly” lease. A yearly tenancy is a Year-to-year at will agreement. It’s the same as a month-to-month, except that it’s year-to-year and renews automatically.

      The 2nd part of that NJ statute is saying that if a Fixed term lease is not renewed, and the landlord continues to accept rent, then a month-to-month at-will tenancy is automatically created. This is very common in most states.

      So, I think you just need to pick what kind of lease you want (fixed-term or at-will), and then if it’s at-will, what is the duration going to be that automatically renews (yearly, monthly, or weekly).

      Personally, I always do fixed-term (no automatic renewal), with a 60 day requirement to notify the landlord if the tenant does not want to renewal. Does that make sense?

  • Nicole Quaintance

    Hi Lucas, thank you for all the effort and advice you put in to this website, it is such a resourceful tool! I am a first time landlord of a single family residence and my tenants are coming up to the end of their lease. I’m wondering what other formalities/steps do you take when renewing a lease, besides just signing a new agreement? Do I do another walk thru to document any damages, or wear and tear? Confirm employment/proof of income? Also, I do plan on adding your “7 lease clauses” to the new agreement, should I tell them upfront that these changes have been added?

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