How To Write A Lease Agreement (63 Clauses You Should Know)

If you are just starting out as a landlord, you may be wondering how to write a lease agreement. Writing a lease can be confusing and a little bit scary for new landlords. I certainly felt that way when I rented my condo for the first time. However, I was very lucky because I had the help of a real estate agent to guide me. Most first time landlords aren’t as fortunate.

The fear and confusion is understandable. Even experienced landlords may have doubts about the leases they create.

Is it really protecting me and my investment?
Does it have all the necessary disclosures and proper wording?
Will it keep tenants from wrecking my property?
Is it up to date?
Will it hold up in court?

So what’s an accidental landlord to do? If I didn’t have access to a real estate agent for my first rental, I probably would have had a lawyer draft one or try to find a good one on the internet. A lot of landlords just copy the first one they find on the internet and regret it when they find out it doesn’t hold up in their local court.

I started with a standard lease agreement but it’s expanded as I’ve learned from my mistakes and the mistakes of other landlords over the years. Learning about leases will make you a better landlord and help you avoid costly mistakes later.

If you are about to write your first lease or want to strengthen the one you currently use, then this article is for you.

Specifically, I will show you:

The different sections of a lease
63 essential lease clauses
Alternatives to hiring a lawyer to make your lease

But first let’s start with the basics. What’s the difference between a Lease Agreement and a Rental Agreement?

Note that this article may contain affiliate links to products or services I think you will find helpful. This means I may earn a commission, at no extra cost to you, if you purchase anything through a link and it helps me continue to bring you useful articles like this one. Thanks for your support!

Lease Agreement vs. Rental Agreement

The first step to understanding leases is to understand the difference between rental agreements and leases. As best as I can tell, they are basically the same except “rental agreements” usually refer to agreements that are for less than 12 months while the term “leases” is used for agreements 12 months or longer.

Do I need A Written Agreement?

Yes. You absolutely need a written lease agreement if you want to hold your tenants to the agreement. In fact, some states specifically require lease agreements for 12 month or more to be written in order to be enforceable.

Without a written lease, it’s nearly impossible to enforce the agreement if there is ever a disagreement. It will be your word versus your tenant’s in court.

I recommend you formalize every tenant agreement with a well-written, customized lease designed to protect your rights and clarify each party’s responsibilities. A strong lease will not only inform your tenants of their duties but it will also hold up in court if ever challenged. A well-written lease with the following 63 essential clauses can do just that.

Anatomy of a Lease

Lease agreements are composed of three main sections.

Basic Information
Lease Clauses
Signatures

Lease clauses comprise the bulk of the lease agreement. They are the specific points of agreement between the landlord and the tenant. They represent the written record of what each has agreed to.

Lease clauses can be further broken down into several categories:

Payments & Penalties
Security Deposit Rules
Tenant Prohibitions
Rules & Responsibilities
Tenant Liabilities & Consequences
Tenant Rights
Landlord Rights
Limitation of Landlord Liabilities
Tenant Acknowledgements
Boilerplate
Miscellaneous

In the next sections, I will list the 63 essential lease clauses every landlord needs to know in order to make a solid, custom lease that meets their needs.

The Basics

Every lease needs to contain some basic information about the agreement. I call it the Who, Where and When of the contract.

Who – AKA “the Parties” to the agreement

Every lease should list the Owner/Landlord and their agent if they use a property manager. It should also list every adult living in the unit. The landlord is the Lessor and the tenants are the Lessees.

Where – AKA “the Property” or “the Premises”

Leases need to clearly describe the rental property being leased. You should be as descriptive as necessary. Some jurisdictions prefer to see the legal description including lot or parcel information. You may also want to specify any parts of the property that are not included in the lease agreement.

For example:

…located at….and includes the use of the driveway and storage shed located on Premises. The adjacent lot located at….is NOT included in the leased property.

When – AKA “the Term”

As mentioned earlier, the length of your agreement determines what type of agreement it is – Lease or Rental. You can negotiate any length of term you wish but I would not recommend your first lease agreement with a new tenant be more than one year. This gives you a little bit of flexibility in case your tenant turns out to be a nightmare.

Remember, leases 12 months or longer must be written in most states.

Payments & Penalties

This section of your lease details the various payments the tenant can expect in the form of rent, fees, and fines. It should also instruct your tenant how and when to make rent payments. The fines clauses not only serve as a deterrent to unwanted behavior but also inform them on how to avoid the fines in the first place.

Lease Clause	Description
Rent	Clearly states how much rent is due and by when. Include acceptable payment methods and instructions.
Late Fees	States the consequences of paying rent late. Stipulate precisely when late fees start accruing and how they are calculated.
Returned Payments	You can either include this clause as part of the Late Fee clause or separate it out. Either way your lease needs to be clear as to what penalties a tenant will face if they bounce a check for rent or anything else.
Funds Collected	Listing the amount and purpose of money collected from your tenant is required in some jurisdictions. Including it in the lease ensures compliance. Distinguish between Refundable and Non-Refundable collections. Do not make the mistake of calling a fee a non-refundable deposit.
Additional Rent	Classifies any amount due under the lease above the normal rent rate (e.g., utilities) as additional rent. That means the tenant can be evicted for non-payment. Note that some jurisdictions forbid you to evict a tenant for unpaid late fees so you shouldn’t call late fees “additional rent” in those states.
Utilities	Identifies who pays for which utilities. If you will be charging a flat fee or using some allocation method for utility bill backs, you should clearly specify how it is calculated in your lease. Any utilities in the tenant’s name need to be in place by the move in date they must maintain continuity of service.
Application of Payments	Explains how rent payments will first be applied to outstanding balances then to next month’s rent to avoid any confusion as to how much rent is still owed. Note that some states specifically prohibit this type of clause.
Security Deposit	Security deposit laws are complicated and strict. Review your state and county’s requirements. Include any mandatory disclosures such as where the deposit will be held, if interest is earned, and when the deposit is at risk.

There are a number of other fees that you may want to charge. Here are some common ones you might consider adding to your lease.

Application Fee
Move-In, Move Out Fee
Parking Fee
Missed Appointment Fee
Lockout Fee
Notice Posting Fee
Violation of HOA Fee
Lease Modification Fee

Only include those fees that are accepted in your local market and that represent a reasonable cost for you.

SMART LEASE CLAUSE ADDITION If you pay for utilities, you may want to include a statement in your lease that you have the right to bill tenants for excessive usage.

Prohibitions

This section of your lease contains lease clauses that set boundaries for what your tenant can do. They limit the tenant’s rights under the lease by restricting how the tenant can use the property including who can live in the property and what changes they can make to the property.

Lease Clause	Description
Use & Occupancy	Explains who may occupy the property and that it may only be used as a personal residence. It may place limitations on overnight guests to avoid them becoming unwanted tenants.
No Assignment or Subleases	Strictly prohibits your tenant from subleasing the unit without your written consent. It should include a statement that utilizing short term hosting platforms is a violation of the lease.
No Alterations	Forbids tenants from making “improvements” or alterations to the property without written approval.
No Pets	Gives the landlord sole discretion in allowing a pet into the rental. It should specify the consequences of having an unauthorized pet as well (e.g., additional pet rent or eviction). Read my ultimate guide to writing a pet addendum for more tips.

These are the common tenant prohibitions but you may want to include more such as prohibiting the use of certain structures on the property. You can either include a separate lease clause or they can be added to the Other Lease Provisions section.

SMART LEASE CLAUSE ADDITION If you decide to allow a tenant to make a permanent alteration to the property such as installing new floors, then you should clarify the changes become your property and the tenant is not entitled to any compensation.

Rules & Responsibilities

One very important role of a lease is to inform your tenant of the rules and responsibilities you expect them to abide by. These clauses will serve as the ground rules between you and your tenant. It’s important to make them clear.

Lease Clause	Description
Tenant Repairs & Maintenance	To set specific expectations of the Tenant’s responsibilities to maintain the property and keep it in good condition. It should not be a maintenance checklist.
Landlord Repairs & Maintenance	Specifies what repairs and maintenance you are responsible for and how your tenants should notify you of maintenance issues.
Renter’s Insurance	Your lease can specify that your tenant is required to get their own Renter’s Insurance prior to moving in.
Fire & Casualty	Specifies the tenant’s obligations and rights in the event the property becomes uninhabitable due to a fire or other event.
Condemnation	Similar to a fire, a property can become partially or completely condemned. This clause specifies the tenant’s obligations and rights if this happens.
Notices	Your lease should specify what types of notices are acceptable in what circumstances as well as when notices are considered received.
End of Term	Outlines what happens at the end of the lease and sets expectations for your tenant.
Association Rules	If applicable, informs your tenant that they are bound by the Homeowner’s Association rules.
Compliance With Laws	Emphasizes that the tenant is required to follow all local laws and failure to do so could result in eviction.
Joint & Several Liability	Clarifies that each party to the Lease is responsible for all lease obligations and responsibilities in full. Note that some states limit the applicability of provisions like this.

PRO TIP It’s a good idea to make a written copy of any building rules, including any HOA rules, available to your tenant and to go over it with them at the lease signing.

Consequences

These lease provisions are designed to inform your tenant about the serious consequences they will face if they violate the lease. It’s not intended to scare your tenant or create an adversarial relationship. Rather, these provisions are intended to make it clear the serious nature of a lease and the liabilities your tenants can face.

Lease Clause	Description
Damages	Informs tenant that they are responsible for any damages incurred by the landlord due to breach of the lease.
Liability of Tenant	States when the Tenant, and not the Landlord, is liable for losses and injuries.
Eviction	A brief explanation of the eviction process and some instances that could trigger one.
Holdover Rent	Sets a daily rent rate if the tenant overstays the lease term (usually 2 times the monthly rent). Note this rate is set by law in some states.
Abandonment	Addresses what happens to the lease and their property when the tenant has left before the end of the lease without notice. See your local laws for specifics.
Tenant Property	Addresses what happens to the tenant’s personal property left behind after vacating the property. See your local laws for specifics.
Misrepresen-tation	Warns your tenant that any false statements or misrepresentations could be grounds for eviction.
Disorderly Conduct	Informs your tenant that you can evict them if they continue to be disorderly and disrupt the enjoyment of other tenants or neighbors after repeated requests to stop the behavior.

PRO TIP If you aren’t sure how to handle property left behind, following the process outlined by a tenant-friendly state such as California is usually a safe bet.

Tenant and Landlord Rights

Some rights are obvious. Your tenant has the right to live in the property and you have the right to receive rent payments. However, there are other rights that are best spelled out in the lease to avoid confusion. These lease clauses cover both landlord and tenant rights that should be explicit in every lease.

Lease Clause	Description
Quiet Enjoyment	Tenant Right: All tenants have an implied warranty of quiet enjoyment – the right to not be disturbed by the landlord in their home. Many leases include this clause as standard language anyway.
Lease Renewals	Tenant Right: If you want to give your tenant the right to renew the lease then you can include this provision, otherwise you need to be clear that the lease terminates at the end of the term. Note that some states require you to allow tenants to renew if they want.
Early Termination	Tenant Right: Establishes rules a tenant must follow if they wish to end the lease early. It should include a reasonable fee to cover your expected costs.
Re-Entry	Landlord Right: An important lease clause that allows you to take back possession of the property, also called “right to repossess” via eviction. Note some states require this clause in your lease to be allowed to evict a tenant.
Access	Landlord Right: Clearly states when you can access the property and what notice you need to provide. Most states require 24 hours notice but it may be more in your area.
Inspection	Landlord Right: You may also want to go beyond the “Access” clause and include a provision to allow for periodic inspections and for routine maintenance.

SMART LEASE CLAUSE ADDITION You should include a provision that allows you to conduct an open house or two once the tenant gives notice of intention to terminate the lease.

In addition, you might want to consider these lease clauses that limit your liability as a landlord in certain circumstances beyond your control.

Lease Clause	Description
Possession	Limits Landlord Liability: Addresses what will happen if you are unable to deliver the property as promised on time. It needs to be fair to your new tenant to hold up in court.
Service Interruption	Limits Landlord Liability: Limits your responsibility to compensate your tenant for disruptions like broken appliances and such.

Tenant Acknowledgements

This section of the lease is where you will require your tenant to affirmatively acknowledge certain aspects of the agreement. Having a tenant initial beside each provision is a great way to show their acknowledgement.

Lease Clause	Description
Property Condition	Requires that the tenant acknowledge the current condition of the rental property and include a requirement to maintain its condition. Some states require the tenant to sign a move-in condition report.
Appliances	Specifies what appliances are included and what your tenant’s responsibilities are with respect to any appliances.
Furniture	If applicable, you should include an itemized list of all furniture included in the agreement.
Smoke & CO Detectors	Most jurisdictions require working Fire Extinguishers, Smoke, and/or CO detectors. This clause explains the tenant’s responsibility to maintain them and the consequences of disabling them.
Security	Makes it clear that you have provided locks but cannot guarantee your tenant’s safety.
Tenant Acknowledge-ment	To require your tenant to acknowledge that they have read and understood the lease.

Landlord Disclosures

Landlords are required to make various disclosures to their tenants. The type and amount of disclosures varies depending on where your property is located. Here are a few of the common ones but you need to check your local laws and regulations to ensure full compliance.

Note that state and local authorities can be very picky about following the disclosure requirements right down to the font so be careful to follow the law.

Lease Clause	Description
Lead Paint	Every rental built before 1978 must have this disclosure. The law requires you to disclose any knowledge of lead paint in the unit and to provide an informational pamphlet.
Agent	Many states require landlords to identify themselves or their authorized agent to the tenant. This usually includes the name and address.
Renting Guide	A couple of states require landlord’s to furnish their tenants with the state’s information on tenant’s rights. This clause informs your tenant and asks them to acknowledge they have received one.
Megan’s Law	Some jurisdictions such as California and New Jersey require a lease to contain a statement about Megan’s Law. The wording is usually very specific so be sure to check your state’s law.
Window Guards	This is just one example of many location-specific disclosures you may be subject to. Again, be sure to review your state and county laws.

Other Disclosures

Every state and/or local jurisdiction has their set of disclosures they require of landlords. The list below is not exhaustive but will give you a sense of what kinds of disclosures may be required.

Death in the Home
Meth Contamination
Bedbugs
Mold
Pest Control
Flood Zone
Smoking Policy
And more

Legal Boilerplate & Miscellaneous

This last section includes some boring, but very important, legal boilerplate and some miscellaneous items.

Lease Clause	Description
No Waiver	A No Waiver clause allows you to be flexible by letting a tenant pay late, for example, without voiding that part of your lease because you let it slide one time.
Binding	Tells everyone that the lease is binding on all parties and anyone who succeeds them in their rights.
Entire Agreement	Indicates that the lease represents the entire agreement between you and your tenant. No verbal agreements will be binding.
Attorney Review	Informs the tenant of their right to have a lawyer review the lease prior to signing it. It’s required in some jurisdictions for all real estate transactions, including rentals.
Governing Law	States that the law relevant to the agreement is determined by the property location to avoid confusion. It’s helpful if the property is located in different state.
Subordination	A subordination clause protects the bank’s interest in the event of a foreclosure by putting your tenant’s right to stay in the property after the bank’s right to foreclose.
Severability	Preserves the rest of your lease agreement in the event any single part is considered void or illegal.
Paragraphs	To avoid assigning unintentional meaning to the paragraph headings.
Signatures	Without proper signatures, you may not have an enforceable lease. It should include signatures from all listed tenants and cosigners.

Lease Addenda

Lease addenda are additions to the original lease and become part of the agreement. It’s a good idea to reference your addenda directly in the lease.

Common lease addenda include:

Pet Addendum
Pest Control
Smoking Policy
Play Structures
Yard and Yard Equipment Maintenance
Move-In Condition Form
List of Devices such as Keys and Garage Door Openers

Other Lease Provisions

The longer you are a landlord, the longer your lease will get. This section can be used to capture those lessons learned into additional lease clauses that don’t merit an addendum or a new lease clause.

Here are some landlord favorites:

Keys & Locks
Satellite Television
Smoking Policy
Floor Coverings
Smart Home Devices
Basement Storage

That’s it! That’s 63 lease clauses (including the basics) that every landlord should be familiar with and consider for their leases.

You can easily create your own custom lease agreement today!

Get the Landlord’s Guide to Writing Great Leases to see examples of all these lease clauses and more and create your own custom lease today. This book includes editable lease clauses, guides for all 50 states including D.C., a pet addendum guide and much more.

Where to Find Local Laws

I’ve mentioned the need to refer to your local laws several times throughout this article. That’s because every governing body with jurisdiction over your property can make the rules. Start with your state’s laws. Nolo has a chart of the relevant state laws here.

In addition, most states publish guides to help landlords and tenants interpret the laws. Every state is different but there is usually an agency that handles landlord-tenant issues. It’s usually the attorney general’s office, the Housing Office, or the Consumer Protection office.

Review these official guides as well. They often reference relevant case law not found in the regulations but have the force of law.

You should always check your county or town’s website as well. Search “your town, your state housing laws”. It will usually bring up the local laws such as rent control or registration requirements. Also, major cities tend to have their own landlord-tenant laws that can be stricter than the state’s. Don’t skip this step!

Do I Need A Lawyer?

You might want to run to a lawyer after checking your state’s landlord laws. Having a local lawyer prepare your lease is always a good idea but it can be expensive. Here are some alternatives:

Create your own lease using the Landlord’s Guide to Writing Great Leases and have a local lawyer make any necessary adjustments for a fraction of the cost
Use a real estate agent – they will use a locally relevant, up-to-date rental form and it’s free if the tenant pays the commission
Join a local real estate investment club but be sure they regularly update their forms
Use a landlord forms service like ezLandlordForms to guide you through the process of making a customized, state-specific lease agreement. Use promo code “DOMENICK15” to save 15%!

Whether you are creating your very first lease or just want to strengthen your current lease, it’s always best practice to review the laws to ensure compliance and to know them so you don’t make a costly mistake. This will give you the confidence to know you have a solid lease that will protect your investment.

What To Read Next

You may find these additional articles on leases helpful:

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