It’s easy for new landlords to get overwhelmed when preparing their first residential rental property for tenancy. While you’re making sure the property is ready for its first tenant, don’t overlook the essentials of renting, like what you should be including in your Residential Lease.

Even veteran landlords can benefit from taking a look at their lease terms every once in a while, so let’s go through some critical terms you should include in yours.

1. Information for All Tenants

Your Residential Lease should include the names and contact information (like personal and work phone numbers and email addresses) of all the individuals that are living in the rental unit.

2. Tenancy Term (Fixed or Periodic)

Sometimes property is rented month-to-month, in periods of 3 or 6 months, or yearly, but more often it’s from one date to another (e.g. May 1 of this year to May 31 of next year). This type of tenancy is called a fixed term lease.

A periodic or automatic term lease is one that renews without the tenant and landlord having to sign a new contract and continues until either the landlord or the tenant gives written notice to end it. Whatever tenancy term you choose, you need to indicate it in your Residential Lease.

3. Rental Occupancy Limits

Rental units are generally designed to only house a specific number of people—usually two people per bedroom.

Keep in mind that the occupancy limits you set must follow fair housing laws so you shouldn’t deny a family with children, for example, if you have the room to accommodate them.

4. Rent Amount and Frequency

Your Residential Lease needs to include the amount of rent the tenant needs to pay, and how often. Usually the tenant pays rent on a monthly basis, but sometimes landlords offer the tenant the option to pay yearly, depending on the tenancy term. It may be worthwhile to allow your tenant to pay ahead so they can have the peace of mind that their rent is taken care of in case of a financial emergency.

Rent amounts can change over time, depending on a variety of factors like increased utility costs or property taxes. How you increase rent amounts for your property differs based on the type of lease you signed with your tenant. Often times, if you need to increase the rent amount, you need to provide your tenant written notice with a Notice of Rent Increase.

5. Deposits and Fees

Most landlords will at least require a security or damage deposit in order for the tenant to rent the property, but there are other deposits and fees that you might want to include in your lease, such as a pet deposit or a fee for late rent payment.

Note that there is a difference between a deposit and a fee: a deposit is refundable, meaning that you are obligated to return the amount to your tenant if they move on, unless there are specific reasons for you to not return that money.

For instance, a damage deposit is meant to go towards repairing damage caused by the tenant after they leave, so if a tenant damages the property, either the entire amount would be held back to cover the cost of repairs or only a portion would be refunded.

A fee is not generally refundable, so ensure you are using the correct wording when referring to fees and deposits in your lease.

6. Pet Policy

Some landlords accept pets and some do not, while others will only accept a certain type of pet (like a cat rather than a dog). Your policy regarding pets should be made clear in your Residential Lease, including specifics about what type of pets you allow.

7. Restrictions on Disruptive Activity

It’s a given that tenants shouldn’t perform disruptive activities while living in your rental unit, but it doesn’t hurt to include restrictions on disruptive activity in your lease.

Clauses that prohibit loud noise, property damage, and general disruptive behavior can help sidestep conflicts between tenants and yourself.

8. Repairs and Maintenance

To avoid confusion between you and your tenant with regards to repairs in the suite, you should include clauses in it that outline who is responsible for which repairs.

For instance, you could include a clause that says your tenant should keep the suite clean and free of garbage buildup.

As another example, you could state that your tenant should not make modifications to the suite without your permission, such as installing an alarm system or painting the walls.

Keep in mind that landlords are usually responsible for repairs that deal with habitability, like heating or plumbing issues.

9. Tenant Insurance Policy

Tenant insurance is necessary for renters to protect themselves and their personal property, so it’s no surprise that most landlords indicate that tenant insurance is required in their Residential Lease. It’s also likely that your insurance policy for the rental property will require you to provide proof that each of your renters has tenant insurance.

10. Other Clauses or Restrictions

Other restrictions, such as a tenant’s right to sublease the property, have roommates move in, or run a home business, should be included in your lease as necessary. However, remember that there are limits to what you can include in your lease and that you should be careful about accidentally including a clause that is unlawful.

Rental Lease Terms and Clauses

Even long-time landlords may find that they need to revisit the terms and clauses in their rental leases, so it’s not a bad idea to periodically check your lease to see if anything needs to be added or removed.

As long as you are following your local and state laws and keeping in mind what is best for yourself and your tenant, then compiling information to include in your lease should be a straightforward process.

Posted by Lisa Hoffart

Lisa is a writer in Edmonton that is passionate about video games and technology.