My Top 10... No, I have 13 Favorite Clauses in my Lease
I know many of you have been successfully using the LPA Lease for years, but I like to remind myself and it is good for you to be reminded of the important clauses in our contracts with our tenants once in a while. Often when things go smoothly for a while, we may tend to forget some details and be caught off-guard when tenants start to wander off-track.
The following clauses in the LPA Lease make it possible for me to be an effective landlord and property manager. Each and every one of these clauses have saved me repeatedly from the situations in which they apply. I've included links to related articles and forms I use to enforce these clauses.
- Late Fees, Added Rent & Bounced Check
LPA Lease Clause # 3, Late Fees is one of the most active clauses that frequently need to be enforced for most landlords. Without this clause, you are not legally able to enforce collecting a late fee, so it is very important to have in your lease. I am thankful for this clause because it not only covers us for an initial late fee, but it also provides the tenant with an incentive to hurry up and pay the late fee and the rent by imposing a "Daily Late Fee" that starts one or two days after the initial late fee is due.
The clause also provides for a "bounced check" or NFS charge, which covers the landlord for fees in the event of a dishonored rent check.
A very important detail that is often left out of many leases is "Added Rent" or "Additional Rent". You should always classify unpaid late fees and other charges like bounced check fees as "Added Rent". That makes makes those charges legally collectible as rent. If you really wanted to, (I'm not saying you should), you can evict a tenant for unpaid late fees classified as "Added Rent" even if they've paid the rent each month.
- Early Payment Discount
Many landlords don't like to give the tenant a discount for paying the rent on time or early. The sentiment is: "Why should I reward the tenant for doing something they agreed to do anyway?" I agree with the sentiment, but I have to disagree with the reality of it. I would rather have the bulk of my rents come in a week to 5 days before the first of the month. I usually build a $5. or $10. early payment discount into every lease.
Good responsible tenants want that discount and have a reason to pay early. It sure beats sending late notices and chasing the rent each month. More importantly it saves my valuable time and gives me peace of mind too.
If you don't have this clause already in your lease, you can also present your tenants with an Early Payment Discount Voucher.
- No Pets
In the words of the late Nick Koon, a landlord guru and mentor of mine, "No pet ever improved a rental property." The LPA Lease has a standard No Pet clause.
In the event I decide to accept a tenant with a pet, I require a Pet Agreement Addendum to spell out the specific rules of conduct and care needed to protect the rental property. The Pet Agreement explains that the privilege of having the pet may be revoked if the tenant does not uphold his responsibility.
- Maintenance & Repairs
LPA Lease clause #9 instructs the tenant on maintenance and repairs in detail. This clause has saved me many times in various ways. It includes policy concerning how presentable the property must be for the purpose of showing once notice is given to vacate. A messy or damaged property can prevent you from re-renting.
The clause also requires the tenant to be responsible for minor repairs under a certain determined amount of money. Painting is not allowed without the owners approval. If I find the tenant is not upholding his responsibilities, I will notify him with a Lease Violation Notice.
Do you maintain the grounds or does your tenant. The Grounds clause makes the tenant responsible for the exterior maintenance of your rental property. Part of being my tenant means taking on many of the responsibilities of a homeowner. Taking care of the property with pride is one of them. The clause states that if the grounds are neglected, the landlord may correct any problems or hire a landscaper at the tenant's expense.
I use the Grounds Violation Notice to enforce this clause.
I am thankful for our appliance clause in the LPA Lease. It makes the tenant fully responsible for all the appliances. This clause has saved me countless time over the years, because appliance are sometimes high maintenance items. Especially washers and dryers! My policy is to explain this clause to the tenants when they sign the lease. I tell them many tenants bring their own appliances. We are not in the appliance business, and all of the appliances are in excellent working order and we expect them to be returned that way. If the tenant wishes to replace our appliance with his or her own, we will remove our appliance and they can take their appliance with them when they leave. Most of the time they leave their appliance. If your lease doesn't have an appliance clause, The LPA's Appliance Agreement can come in handy.
- Plumbing Stoppages
A common call you hear from your tenants might be about toilets or plumbing stoppages. I love the plumbing stoppage clause because it has practically eliminated plumbing stoppage calls for us. It is the tenant's waste in the lines and the tenant should be responsible for keeping the waste lines clean. Even if you don't use the LPA Lease, the Plumbing Stoppage & Drain Maintenance Notice can be very helpful.
- Heating & Cooling
I am grateful for our heating and cooling clause because the tenant is required to maintain a heating contract on the heating system and not doing so is a lease violation.
- Attorney Fees
It is very important these days to include a clause for attorney's fees in the event you have to take a tenant to court. The attorney fees are not normally recoverable if you do not have a clause like this. Before starting an eviction, I like to send an Attorney's Fee Warning Notice to give the tenant one last opportunity to pay and avoid an attorney's fee before sending the account to my eviction attorney.
- Renters Insurance
I'm glad this is in our lease. I remember an incident years ago when the garage roof leaked during a heavy rain storm. The tenant called threatening to sue us for the damage to his sofa, which he stored in the garage. I was doubly thankful for our clause in the LPA Lease because of a) the Renter's Insurance clause which makes the tenant obligated to have renters insurance and b) the Maintenance Clause which indicates that garages and basements are not included in the rental, but may be used at the tenant's own risk.
- Service of Process
This is a clause I'm grateful for when serving an important notice because it gives each person listed on the lease 100% authority to receive or give a notice on behalf of the other tenant(s). Just imagine how difficult it could be if you had to serve eviction papers to multiple tenants who are trying to avoid you!
I once had a tenant's attorney tell me he was going to have my lease declared "illegal" and the eviction case "thrown out of court" because he thought he could prove one of the clauses were "illegal". Then I pointed out the Illegality clause which states that if any part of this lease is not legal according to local laws, the rest of the lease agreement will be unaffected. That shut him up and the eviction proceeded without further incident.
- No Smoking
Have you ever painted after smoking tenants? You probably know what I'm talking about. It's sometimes hard to find non-smoking tenants to rent a property where heavy smokers have been. The LPA No Smoking Notice & Reminder form can be used to inform tenants that they are in violation of their No Smoking clause in the lease agreement. It can also be used a new Notice to initiate a new No Smoking rule for your rental.
That's why I'm thankful for the No Smoking clause.
There are many more important elements of The LPA Lease that you should be using! If you're not, you can easily implement them into your property management.
I hope you have a Happy Successful New Year!