7 Extraordinary Lease Clauses That I Can’t Live Without


Written by on August 3, 2015 Courtesy of Landlordology

7 Extraordinary Lease Clauses

Most 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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