Negotiate a Lease Designed to Protect Landlords

Optimizing the rental process as a landlord is critical to the long-term profitability of your real estate business. Using a lease that is drafted with a landlord’s interests in mind is an important first step.

Landlord negotiating a lease with a couple
close up of hand signing a lease

The Lease Should Cover Certain Key Terms and Conditions

An effective lease must adequately protect your financial interests and be enforceable while also complying with federal, state and local laws.
 
Working with a lawyer can help ensure that the terms and conditions covered in your leasing documents are both effective and enforceable. 

Tenancy Term

A lease that sets expectations and addresses common issues related to tenancy during the lease term can help you avoid tenant disputes and prevent unexpected gaps in rentals, regardless of market conditions.

Should your lease be month-to-month, for 6 months with renewals, a full year, or something else?

Choosing the right term for your lease is a balance between risk and reward. Month-to-month leases provide flexibility but may sacrifice revenue stability depending on the current market. A long lease may provide a stable stream but can be a problem if a tenant turns out to be troublesome. However, a good tenant would be perfect for a two-year lease.

What date, specifically, should the lease start and end?

To avoid hassle related to pro-rating rent, notice deadlines, late fees and other time-sensitive elements of a lease, it may be best to start and end leases on the first and last day of a month. 

What happens if a tenant wants to leave early? Or stay longer?

If a tenant stays after the end of the lease term and the landlord accepts rent from that tenant, they may become a holdover tenant with the right to occupy the property under a new lease term. Make sure your lease properly covers this situation to avoid having to evict a tenant who won’t leave. A lease normally will provide when a landlord or tenant may terminate the lease and the notice that is required.

family with moving boxes
one person giving a paper to another

Financial Terms and Conditions

Every state has laws that address what landlords can and cannot do when it comes to security deposits, fees, and rent increases. For example, California allows landlords to charge up to two months’ rent for a security deposit, three months if the unit is furnished, and some states require landlords to pay tenants interest on their security deposits. Have you checked the laws in your state to see if your lease complies? 

If you offer multi-year leases, it’s important to address rent increases so you don’t get locked in to lower rent payments over the long term. Also, some states prevent landlords from billing tenants for shared utilities, so you’ll want to make sure utilities, HOA fees, and other financial items beyond the monthly rent are clearly articulated in your lease. 

Get a legal plan from LegalShield and have a provider lawyer help make sure you’re following the law.

Occupancy Rules and Regulations

There are a variety of issues beyond the rental rate and term that warrant attention in your lease document to both proactively avoid disputes and provide adequate legal protection should you end up in front of a judge.
 
Many landlords are not aware that they can include lease clauses that protect landlords from renters’ abuse of the property. For example, you can require tenants to maintain the lawn, use felt pads under their furniture to protect hardwood floors and require guests to remove their shoes. Adding specific details to the terms of the lease is an important part of protecting your property. Here are a few other common areas you may want to address in your lease.

  • Rules for roommates, guests, and subletting the rental unit 
  • Neighborhood noise ordinances or other regulations
  • Who is ultimately responsible for the rent if there are multiple “roommates” and one skips town
  • If the power goes out through no fault of the landlord, tenants can hold the landlord liable for damages, unless you address it in the lease
  • What pets, including specific breeds, if any, are allowed to reside in the rental unit

A LegalShield business legal plan provides landlords access to vital legal assistance at an affordable price.
 
Lease Renewal

Renewal negotiations are very important to your rental business because your lease rates should reflect the current real estate market rate for optimal return. The renewal process can make it difficult to balance the benefit of having a new tenant paying more versus the risk of having higher vacancy rates. A lease renewal also gives you an opportunity to establish better terms than your current agreement. Don't leave lease negotiation to chance; speak with a provider lawyer to protect your real estate investment.

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statue of lady justice

Rights and Responsibilities

Both landlords and tenants have certain rights and responsibilities under federal, state and local law. Having a good understanding of the laws that govern your rental relationship is an important part of creating an effective and enforceable lease. 

  • Do you know your rights and responsibilities under the Fair Housing Act?
  • Does your advertising or lease agreement violate anti-discrimination laws?
  • Are you required to provide accommodation to a disabled tenant?
  • If you do have to modify your unit to accommodate a disabled tenant, who’s responsible for the cost?
  • When are you allowed and not allowed to enter the property once a tenant is occupying it?

Some of the questions above are simply a matter of law, while others may require specific language in your lease agreement.

Whether you have a simple question about your lease, a complicated question about a specific law, or any other legal question related to your rental business, when you have a business legal plan from LegalShield, you can pick up the phone and get the legal advice you need without worrying about getting a huge bill at the end.

Have a Lawyer Review the Lease to Make Sure Your Property is Properly Protected

A lawyer may charge $150-$400 an hour for even basic advice. As such, most people don’t think of calling a lawyer when they have quick questions or need someone to look over a lease and provide feedback. That could be a mistake.
 
First, if you use a standard rental agreement downloaded from the internet without having a lawyer check that it meets the legal requirements in your state, you could have to deal with long-term legal and financial implications. Second, management companies don't always have your best interests in mind because they don't own the property. LegalShield makes getting day-to-day legal support to protect your real estate investments easy and affordable.
 
Our most popular legal plan for landlords allows you to have your lawyer review your lease (or any other documents up to 15 pages each) and get legal consultation on the unlimited aspects of your rental business. Our provider lawyers are available to make calls and write letters on your behalf to help resolve a dispute with a tenant, contractor or any other third party.

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How LegalShield Works

Finding solutions to your legal issues doesn’t have to be stressful, complicated or expensive.

LegalShield puts the power of legal representation within reach of any individual, family or business. We work hard to make it easy, simple and affordable to get the legal help you need, when you need it.

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