Five Key Provisions Every Landlord Needs in a Residential Lease

The lease agreement is a legally binding contract that lays out the rights and responsibilities of the landlord and the tenant. Property investors who own property and use it for long term rentals should all have an airtight lease agreement to use with each new tenant that rents the property.  It is not uncommon, however, for some landlords to include burdensome and, in some cases, unlawful provisions in their leases with the misunderstanding that the tenant will be bound to whatever terms are included in the lease.  It is important for landlords to understand that their leases cannot violate the Florida Landlord Tenant Act (Chapter 83, Florida Statutes).  However a strong lease with substantial protections can be drafted ensuring both parties are acting in accordance with the law, while keeping the landlord and the landlord’s property well protected.

1. Lease Term and Extensions

It seems obvious, but a lease should clearly define the entire term of the lease—from the commencement date (the day the tenant takes occupancy) through the termination date (the final day of the lease)—to avoid any misinterpretation by either the landlord or the tenant of when the lease begins and ends.  Occasionally, leases are drafted that do not provide for a set termination date.  This can often lead to confusion about when the tenant is supposed to vacate, potentially leading to the landlord claiming default rent from the tenant.  A definite termination date provides clarification for both the landlord and the tenant of when the lease ends.  It also allows the tenant to deliver any notices of intent to renew or not renew the lease on time with the landlord, while also allowing the landlord to set deadlines for any required notices of termination.

Given the demand for rental property in the current market, landlords can also offer tenants right or option to extend the lease built within the terms.  Specifically, the lease can be set up where the tenant has the right to exercise an option to extend the lease so long as the option is exercised by the tenant no later than 60 days prior to the lease termination date.  This provision does not prevent the landlord from including an increase in the rent if the option is exercised by the tenant, but including the extension option can save a good bit of hassle for both parties.  The landlord knows she has stable income, and the tenant knows she does not have to find a new place, move, and put down a new security deposit.

2. Maintenance Responsibilities

The Florida Landlord Tenant Act (Chapter 83 Florida Statutes) provides maintenance responsibilities on behalf of the landlord and tenant, but these are not customized for every lease and every property.  Therefore, the lease should clearly explain which party is responsible for specific maintenance and repair issues which may arise during the course of the lease.  It is almost inevitable that an appliance will break, a window will shatter, or something else will occur requiring either the landlord or the tenant to pay for the repair.  The lease should clearly define who is responsible for which repairs, as well as procedure for notifying the landlord in the event a repair is needed.  The lease should also be very clear that the tenant is responsible for maintaining the property in a clean and sanitary condition at all times.  Typically, the landlord will be responsible for all repairs to major appliances so long as the damage is not a direct result of the tenant’s negligence willful misuse of the appliance.  The simplest way to avoid any confusion is to clearly and plainly set out the repair and maintenance policies within the lease.

3. Late Fees and Default

Landlords do have the right to assess late fees if rent is not received within a certain time after its due date each month.  Each lease will vary, but landlords generally provide a five to ten day grace period until rent is considered late.  Once the grace period has expired and the rent remains unpaid, a late fee will be assessed on top of the rent owed.  Landlords want to make sure that the late fee is no greater than approximately five percent (5%) of the total monthly rent payment, which is fairly standard throughout Florida.  Please note, however, that if three (3) days pass after the grace period has expired and rent is not paid, the landlord has the right to immediately terminate the lease.  As such, your lease should be clear as to when rent is due and how long the tenant has to pay the rent after the due date until a late fee is assessed.

4. Landlord’s Right to Enter the Rental Property

The lease agreement should specifically set forth the terms for the landlord’s right to re-enter the property.  This will serve to prevent any violation of the tenant’s privacy, but it will also provide clear instructions for how much notice is required to be given by the landlord before the property can be entered.  This is an important provision to include if the landlord is attempting to re-let or sell the property.  You’ll need to provide the tenant notice before the property is shown to potential tenants or buyers.  The foregoing notwithstanding, the landlord may enter the property should it be necessary to preserve or protect the property during an emergency.  This should also be affirmatively stated within the lease.

5. Security Deposit

Security deposits are most commonly collected by landlords upon the commencement of a lease to account for any damages to the property and are governed by Chapter 83.49 Florida Statutes.  Security deposits are typically a total of one month’s rent, which is collected and held in a separate account by the landlord and not commingled with the rent.  It is important for tenants to understand that, upon the termination of the lease, a landlord has a legal requirement to either (i) return the security deposit to the tenant within fifteen days, or (ii) notify the tenant within thirty days of the landlord’s intention to use some or all of the security deposit to pay for damages to the premises caused by the tenant.  If the landlord fails to notice the tenant of its intention to make a claim on the security deposit, then per Ch. 83.49, the landlord forfeits any right it has to the security deposit.  For the sake of clarity, a copy of this chapter of the Florida Landlord Tenant Act should be attached to the lease.

The lease should also set out what the security deposit can and cannot be used for.  For example, the landlord is allowed to use the security deposit to cover unpaid rent or make repairs to damages to the property.  However, the lease should also be clear that if any portion of the security deposit is used for unpaid rent or to cover repairs, it must immediately be reimbursed by the tenant or the tenant will be held in default.

Conclusion 

Residential leases may seem commonplace, and but landlords should not be complacent with the lease agreement they enter into with their tenants.  That said, it is strongly encouraged to consult with an attorney experienced in landlord tenant law when drafting the lease agreement.