The lease is a crucial component of your income property. As a legally binding contract, the lease doesn’t just detail how much rent your tenants will pay and when it’s due. It essentially outlines the terms of your relationships with your tenants. As such, it should include the responsibilities of each party, the length of the lease, and any clauses regarding pet policies, lease violations, and renovations.

Getting the lease right is important because it will protect you as a landlord should you have a dispute with your tenants. But if you make mistakes with your lease, it’s possible that the contract won’t be legal and won’t protect you. Are you making these four common mistakes with your lease?

1. Using a Standard Lease

Getting a generic lease that may not be specific to your state can hurt you. You not only need to have a lease that is legal in DC or Maryland, but you also need to customize the rental agreement for your particular rental property and tenants. Standard lease forms may include clauses or rules that don’t apply to your property and could later cause a conflict.

Your lease should also include information such as disclosures—for example, if there is the potential for lead paint to be on the property—and the conditions for returning the security deposit. It’s important to designate a lease term as well, so you have the option to offer a lease renewal to the tenants or consider looking for new occupants when the lease is up.

2. Not Including Tenant Responsibilities

The lease is an opportunity for you to define your relationship with your tenants by stipulating what tasks they are responsible for. Having this information is invaluable to both tenants and landlords.

Ensure tenants know they are responsible for tasks such as changing smoke detector batteries and air filters, removing trash, and doing their part to protect the plumbing and septic system. It’s also essential to include who will be responsible for snow and ice removal or landscaping and storm clean-up services.

Without such information, tenants may not only be confused about what they are responsible for, but they may argue that since these terms were never outlined, you as the landlord are responsible for them, and they may withhold rent until the problem is solved.

3. Skipping Renter’s Insurance

If your lease doesn’t include a clause requiring tenants to have renter’s insurance, you could be putting yourself at unnecessary risk. Renter’s insurance will help cover your tenants’ items if the property is involved in a flood or fire, and can even cover medical or legal costs if a guest of the tenant was hurt on the property.

Renter’s insurance is affordable and can lower your liability as a landlord, and most tenants expect a renter’s insurance clause. Without requiring renter’s insurance, tenants may hold you responsible for covering the cost of their damaged items due to an issue on the property.

4. Overlooking Joint Liability

If you allow roommates at your rental property, it’s crucial to have a clause in your lease stipulating that the other parties are still responsible for the full rent payment even if one roommate leaves before the lease is up. Without including a joint and several liability clause, tenants can argue that since one roommate isn’t there anymore, they only have to pay their own portion of the rent.

When you include a joint liability clause, you ensure that each party in the lease is responsible for the full amount of rent and for abiding by the conditions of the lease. Each party is also equally liable for any damage done to the unit with a joint liability clause.

Have You Made Any of These Mistakes With Your Lease?

Being a landlord isn’t always straightforward, and it’s common to make mistakes with the lease agreement. However, you don’t have to let these oversights compromise the success of your income property. Contact FAS Management today at (202) 337-5080 to ensure your lease is legal and protects you as a landlord in DC or Maryland.