Property and landlord-tenant laws can be a little tricky sometimes. There are some landlords and property managers who don’t construct their Residential Lease Agreements with complete legality because they either don’t understand the law or they are purposefully being unlawful.
You should know that even if your tenant signs a lease agreement after you’ve included an illegal clause in the contract, the clause doesn’t become legally valid. In fact, your tenant could move into the rental unit, immediately take your agreement to the U.S. Department of Housing and Urban Development (HUD), and then sue you for damages.
To help avoid this, we’ve made a list of 5 clauses landlords have tried to use in the past that you can’t include in your Residential Lease Agreement.
1. Requiring the Tenant to Be Responsible for Repairs to the Rental Property
As tempting as this clause might be, you cannot include it in your Residential Lease. As the owner, you are liable for the maintenance and general upkeep of your property, just as you would be if you were a regular homeowner.
Of course, if the tenant breaks something, it’s a different story. You aren’t responsible to pay to repair a hole in the wall or a smashed window because your tenants had a fight or a party and busted up the apartment. However, the tenant can opt to have the repair costs taken out of their security deposit.
It might be a good idea to conduct regular inspections of your property and the rental units to ensure everything is in working order. You don’t want a leaky faucet, for example, to turn into something more serious like a burst pipe that could cause serious (and costly) water and mold damage.
Just be sure you don’t forget to deliver a Notice to Enter to your tenants before entering their unit. The HUD takes a tenant’s right to privacy very seriously.
2. Asking the Tenant to Waive Their Right to Privacy
This is a mistake some landlords make that can have costly consequences. Although it may not necessarily be something you would include in your rental agreement, you have to keep in mind that you, as a landlord, can’t enter a rental suite unannounced. Even if your tenant has texted you saying their toilet isn’t flushing, you can’t just stroll in with your plumbing tools.
The minimum amount of notice you must give a tenant before entering the property differs between states, but the general consensus is 24 hours. However, in more urgent cases (like if your tenant’s light fixtures are sparking), your tenant will likely waive the 24-hour notice period. The most important thing is the tenant must make that decision with verbal (over the phone or in-person) or written (likely via text message) confirmation.
3. Making the Tenant’s Security Deposit Non-Refundable
The maximum dollar amount landlords can ask for security deposits differs between states. Twenty-six states limit the dollar amount to a range from one to three-and-a-half months’ rent, and 24 states have no limit at all. That said, every state requires security deposits to be returned to tenants at the end of the lease agreement
Of course, the terms of return have limitations too. A security deposit is meant to cover any damage caused by the tenant. If you’re dipping into the security deposit to cover such damage, you will be required to provide the tenant with an itemized list (with exact dollar amounts) that justifies your deductions from their return.
If your tenant has caused serious and expensive damage to the property that the security deposit won’t cover, you may be able to sue them for the remaining cost of the repairs. You’ll have to check the specific landlord-tenant law in your state to be sure.
4. Not Granting the Same Privileges to All Tenants
All of the tenants on your property must be treated equally, meaning you cannot ban certain tenants from privileges that other tenants have. These privileges include but aren’t limited to access to parking, property-wide laundry, exercise rooms, or pools.
Banning or preventing certain tenants from using these facilities could open you up to a discrimination suit under the federal Fair Housing Act and the Fair Housing Amendment Acts.
If you’re unsure of what constitutes tenant discrimination, have a look at FindLaw’s Housing Discrimination FAQ page.
5. Asking the Tenant to Waive the Right to Sue You
You cannot include this stipulation in any way, shape, or form in a lease contract and have it be a valid clause. If you break any property or landlord-tenant law, your tenant has the right to sue you for damages even if they’ve signed some agreement stating they wouldn’t.
The best defense for avoiding a lawsuit from your tenants is to be a law-abiding landlord.
If you are struggling with something specific, like perhaps you are having trouble differentiating the property laws in your state versus another, it’s probably a good idea to have your Residential Lease Agreement looked over by a lawyer.
The Legal Landlord
Highlighting these illegal clauses is meant to keep you protected and your tenants happy. Litigation can be expensive, and no one wants to be held up in court over something that could easily be avoided with a clean, legal lease agreement.
It might be good for you to consider your rental contract from the perspective of your tenant. Would you feel comfortable with all of the terms if you were a renter? If you answer no to any part of your agreement, you should consider changing it.
Have you ever come across an illegal lease term?