The Seattle Landlord Website!

CRITICAL LEASE PROVISION:

1. The Term. The term of the lease should be set forth on the first page of the lease agreement and the term should be unambiguous. If you have a one-year lease from June 2006 to May 2007, you should state that the term of the lease is from June 1, 2006 to May 31, 2007. Many jurisdictions have specific laws regarding something called "holding over." Holding over is term that refers to the tenant staying longer in a property than the term of the lease permits. You should consult the laws of your jurisdiction to understand the specific implications of holding over in the jurisdiction of your rental property.

2. The Rent. Both the amount of the rent and the due date of the rent should be set forth on the first page of the lease agreement. It is ideal to have the rent due on the 25th or so of the prior month. Why? Because, as the landlord, you want to get paid first. If you wait until the 10th of the month, for instance, it is possible that the tenant has paid all of their other bill except their rent and it is possible that there is no money left for rent. If your rent is due on the 25th of the prior month, then you get paid first and the remaining bills get paid last. The lease should also state clearly where the rent is to be paid, the payee and the time that the rent is due (e.g., No later than 3pm on the 25th of each month).

3. Deposits. You should get first month, last month, and one month security deposit from your tenants. High quality tenants expect this and they won't object. If you are holding two months of rent (last month and security deposit), you have tremendous leverage if the tenants do something you don't want them to do, like break a lease or damage the property. If the upfront costs are too high, it is acceptable to prorate the security deposit over three months. For instance, if your tenant moves in on July 1st, you collect first and last month's rent before July 1st. On August 1st, September 1st and October 1st, you collect one third of the security deposit in addition to the monthly rent. You should only do this with potentially extremely high quality tenants.

The lease should set forth with specificity the types of events that would cause you to return the full amount of the security deposit back to the tenant, such as prompt notice to you regarding termination, all monies due have been paid in full, property is left in its original condition, carpets, floors, walls, appliances, bathroom fixtures have been professionally cleaned, tenant has returned all keys, tenant has allowed you to show the premises to prospective new tenants, and tenant has paid all outstanding utility bills.

4. Late Penalties. If rents are late, you should assess late penalties without hesitation. There should be a daily penalty for late rents, and these penalties should be cumulative. You should make your tenants aware of the late penalty fees and the fact that they are cumulative and these fees must be paid in addition to the rent if the rent is late. Be explicit and unapologetic and you won't have any issues.

5. Staggered Lease Provisions. If you own a small apartment building (10 units or less), you should arrange your tenant leases so that the lease terms expire on a staggered basis. You don't want all of your tenant's leases expiring on the same month because that creates the risk of multiple vacancies at the same time. If you clean, paint, market your unit, and then stage it for your renters, you will need significant notice periods so that you arrange to have all of this complete in a timely fashion. If you don't have a large staff working for you, even two vacancies can consume all your time, which is why it is extremely important to stagger your lease terms. In addition, if you stagger your lease terms, your tenants can't jointly negotiate against you if they were inclined to do so in the first place. In Seattle, the best months to rent property are between May and August, with the peak period being June and July. It's best to have vacancies during the summertime when children are out of school and tenants are open to moving. The worst month to rent is December.

6. Pets. The author of this website allows only fish, small cats and small dogs as pets. Large pets create numerous issues for property owners, not the least of which is soiling in the unit and around the property. You should charge tenants an additional "Pet Deposit" and, if the market in which you live supports this, you should consider charging additional "Pet Rent." An extra $15.000 - $25.00 per month for each pet is not unreasonable, given the fact that pets can do more damage to the unit than any other single factor.

7. Lead Paint. If your property was built before 1978, you should include a Lead Paint disclosure and you should have the tenant acknowledge in writing their receipt of the disclosure.

8. Move-in / Move-Out Checklist. This last point is not a disclosure so much as a good practice. You should have a comprehensive move-in and move-out checklist with your tenants that covers every room, appliance, wall, flooring, window, locks and just about everything else that you can think of. All defects or damage should be noted on the checklist and move-in. On move-out, you should inspect the apartment against the original checklist to ensure that your tenants are not responsible for additional damage to the unit. On move-in, the tenants should also sign the checklist at the bottom acknowledging existing damage or defects (if any), so there is no confusion. You should also inform your tenants that any additional damage to the unit, outside of reasonable wear and tear, will be their responsibility and will be deducted from their security deposit. You can find a form move-in / move-out checklist by going here.

This website is providing information of a general nature. The information is not meant to include any form of legal advice. If you have specific questions or if you need more information, you should contact a qualified real estate attorney who is knowledgeable about the real estate laws in your jurisdiction. In fact, all of your legal agreements, including leases with tenants, should be reviewed by a qualified real estate attorney before they are delivered to any third parties.