7 Clauses You Must Have In Your Lease Agreement 

Kriyago
11.01.22 12:37 PM Comment(s)
7 Clauses You Must Have In Your Lease Agreement

If you're planning to lease out your property, you may have to consider getting a lease agreement prepared before looking for tenants. Lease agreements are written documents to safeguard your property from damages or any legal issues with the Tenant. All the clauses mentioned in this agreement should be crystal clear and easily understood by potential tenants to avoid confusion.  

 

Every lease agreement will be different depending on several factors such as property type, area, state laws, and more. However, some clauses are common in all the lease agreements that are a must-have. Let's take a look at each of them here. 

7 Must-have clauses in your lease agreement  

Preparing a lease agreement can be a daunting task, but here are the seven clauses that you must have in your contract before leasing your property to tenants. Knowing what to include can ease the process and cut down the time required to write your agreement. Here are the seven clauses to include in your contract. 

1. Security deposit terms

As the name hints, security deposits are promises made by the tenants to keep your property secure and cover-up for damages done by the tenants. As a property owner, it's important to add this clause in your lease agreement to reduce your liability in case of any events. Here are some of the things to add to this section: 

  • The exact amount that should be deposited.  

  • The interest rate and the way you store the deposit 

  • Add how you return the deposit amount  

  • You should also specify the reasons in case of deducting the amount 

2. Maintenance and repair clause

Maintaining your properties is crucial, and it's an ongoing process. As a landlord, you will be responsible for recurring maintenance such as gardening and plumbing. Specify that in your lease agreement and also the steps to place maintenance requests when the need arises.  

 

Adding this to your lease agreement can reduce the chances of huge damages to your property and ensure all the maintenance requests are placed and inspected on time. Ensure you mention every detail clearly in legal jargon and simple words so that it's easily understood by the tenants to avoid misunderstanding. 

3. Rent payment clause

It is a must-have in any lease agreement. You should add the entire lease amount along with the rent charges every month and the due date in your contract.  

 

The Tenant agrees to deposit $xxxx as security and agrees to pay $10,000 rent to be paid like $833 per month due on the 5th of each month. A grace period of 5 days is allowed, but payment after the 10th of each month will result in additional charges, and the Tenant must pay $30 as an extra for every late payment. Upon signing this agreement, the Tenant agrees to comply with these terms. 

4. Duration of the lease

Having a well-worded written document and getting it signed is one of the most crucial steps before leasing your property to tenants. You need to specify the duration of the lease along with the due date. It's also important to add the notice period. It goes something like the example below: 

 

"The lease on the property begins on March 10, 2021, and ends on March 31, 2022." 

5. Renewal clauses and other responsibilities 

One of the must-haves in your lease agreements is the lease renewal clause. It's important mainly because if the tenants choose to stay after the set period, it's important that they notify you regarding the same.  

 

If they decide to leave the property, tenants should inform you a month or two in advance, so it's easy for you to fill the vacancy during the time. Specify the renewal terms, and for new lease agreements, KriyaGo can help you do just that. We help you automatically renew lease agreements to ease the process.  

6. Restriction and breakage clauses

You need to write whether pets are allowed or not and regarding any such restrictions in this step. Some landlords have a strict no pet policy, conditions on excessive noise in and around the property, and many more. If there are any such restrictions, you need to add them to your lease agreement as it prevents covering up damages done by pets.  

 

It also prevents disturbing the neighborhood with loud noises or pet litter on your property. You should also include breakage clauses in the agreement to avoid paying more for damages done by the tenants on your property. It clears any misunderstanding by having a legal written document signed by both parties.  

7. Termination clauses

As the property owner, you have the right to terminate the Tenant during the term. In case of any damages or misconduct, you can notify your Tenant to leave your property, so it's always better to have an agreement signed. Termination clauses specify certain conditions under which the Tenant can be terminated.  

 

Finally, make sure all your property and tenant details are mentioned and that the Tenant has read the whole agreement before proceeding to the next step. It’s important that you do a thorough background check and Here's an example of what can be written at the end of your lease agreement: 

 

By signing this, the Tenant agrees to have fully read, understood, and adhere to the terms and conditions mentioned in this lease agreement. 

Create your Lease Agreement with KriyaGo

If you're having difficulty creating a lease agreement or lease abstraction for your real estate business, let KriyaGo do it for you! We can also customize property management software for your business, prepare lease abstractions, back-office accounting, and a lot more.  

 

Our team of experts will help you find the best solution for your property business and ensure a smooth flow of processes, right from hiring tenants to creating automatic lease agreements for you. To know more about it, talk to our team of experts today! 

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