Most standard leases include basic information about your agreement with your tenants, such as property location, dates, tenants’ names, rent amount, and security deposits. However, there are a few other lease clauses for landlords that can help avoid tricky rental situations.

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Why you need these clauses

The real challenge for a landlord comes when a situation arises with a tenant that is not addressed in the lease. If you’re emotionally involved in the issue, it’s more difficult to be objective in your decision about how to handle it.

To help you navigate these scenarios, we’ve come up with eight most important clauses your lease must have:

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Clause #1: Severability

This may be one of the most important clauses in a lease. This clause states that if one aspect of the lease is found to be illegal, the rest of the agreement will still be legally binding.

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SEVERABILITY

If any provision of this Agreement or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Agreement nor the application of the provision to other persons, entities or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law.

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Without this clause, a court that has found one small clause to be illegal, even if accidentally so, might consider the entire lease to be void. No matter how rock-solid your lease might be, you should include this clause just to be safe.

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Clause #2: Use of premises

Renters often take it for granted that they can use their rental house for any purpose, but that shouldn’t be the case. Take some time to detail any restricted uses. For instance, you might want say that the property can only be used for residential purposes. This prevents tenants from running a business out of their home, which can present liability issues.

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USE OF PREMISES

The Premises shall be used and occupied by Tenant(s), for no more than TEN (10) persons exclusively, as a private individual dwelling, and no part of the Premises shall be used at any time during the term of this Agreement by Tenant(s) for the purpose of carrying on any business, profession, or trade of any kind, or for any purpose other than private dwelling.

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Clause #3: Joint and several liability

“Joint and several liability” is often confused with “Severability;” and as a result, some property managers and landlords only include one or the other. In fact, the two are different in function.

Joint and several liability means that each party to the lease is jointly and individually responsible for fulfilling the terms of the lease agreement. This is important when there are multiple tenants on the same lease. If one of the tenants defaults on the lease, this provision stipulates that the others are responsible for fulfilling all lease obligations.

Let’s say, for example, that three roommates are on the lease. The monthly rent is MWK800,000 per month, which the three tenants split equally. If one of the residents stops paying his or her rent, the other two are still obligated to pay the full MWK800,000 each month. The other two roommates may have to pay MWK400,000 each in order to prevent the group from being in default of their lease. This is a way to hold all parties accountable for the lease in the event that one person isn’t pulling his or her wallet.

It allows you to consider all tenants as a single entity, for the purposes of notices, collecting rent, or in case of suing for damages.

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MULTIPLE TENANTS OR OCCUPANTS

Each Tenant(s) is jointly and individually liable for all Lease Agreement obligations, including but not limited to rent monies. If any Tenant(s), guests, or occupant violates the Lease Agreement, all Tenant(s) are considered to have violated the Lease Agreement. Landlord’s requests and notices to any one Tenant(s) constitute notice to all Tenant(s) and occupants. Notices and requests from any one Tenant(s) or occupant (including repair requests and entry permissions) constitute notice from all Tenant(s). In eviction lawsuits, each Tenant(s) is considered the agent of all other Tenants in the Premise for service of process.

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Clause #4: Security deposits

Security deposits are often very contentious issues between a landlord and tenant, so it’s important that your rental agreement is very specific about all matters related to the security deposit. This includes not just the amount of the deposit, but issues such as when and how the deposit may be used and when and how the deposit is to be returned.

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SECURITY DEPOSIT

(i) A non interest earning refundable deposit equivalent to ONE MONTH’S RENT i.e. MWK800,000 (Eight Hundred Thousand Malawi Kwacha) is payable to the Landlord upon signing of this Lease Agreement and will be refunded at the termination/determination of this Agreement in the same Malawi Kwacha amount as paid initially, provided all terms and conditions contained herein have been complied with by the tenant. The deposit may not be used in lieu of rent.

(ii) On termination/determination of this Agreement, upon the Tenant handing over the Leased premises to the Landlord, the security deposit in (i) above shall be refunded to the Tenant within 30 calendar days, in full as initially paid, or less the amounts equivalent to cost of repairs the Tenant has failed to perform under his obligations. Cost of the repairs shall be determined by a contractor appointed by the Landlord in mutual agreement with the Tenant.

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Clause #5: Late fees and allocations

If you don’t specify a late fee in your lease, it will be nearly impossible to charge a late fee after the fact.

This clause should specify the exact amount of the fee, the time at which it will be assigned, and if there are any additional, daily late fees for nonpayment.

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LATE FEE AND ALLOCATION OF PAYMENTS

(i)In the event that any rent payment required to be paid by Tenant(s) hereunder is not paid IN FULL by the start of the FIFTEENTH (15th) DAY OF EACH QUARTER, Tenant(s) shall pay to Landlord, in addition to such payment or other charges due hereunder, an initial late fee as additional rent in the amount of 5% OF THE MONTHLY RENT AMOUNT. Further, a subsequent late fee of FIFTY THOUSAND MALAWI KWACHA (MWK50,000.00) PER DAY will be incurred by the Tenant(s) for every day payment is delayed after the 14th day of the quarter.

(ii) All future payments will be allocated first to any outstanding balances other than rent. Any remaining monies will be allocated lastly to any rent balance.

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The last sentence in this clauses ensures that all fees are paid first with whatever money tenants pay. So you allocate payments first to late fees, as it’s easier to take legal action for “unpaid rent” than it is for an “unpaid late fee” should the situation arise.

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Clause #6: Subleasing

If you don’t specifically prohibit subleasing, some tenants may do it without asking. In that case, you can’t penalize them for it.

You might be able to terminate the lease, but that’s not always preferable because then you have to find new tenants.

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ASSIGNMENT AND SUBLEASING

Tenant(s) shall not assign this Agreement, or sublet or grant any license to use the Premises or any part thereof without the prior written consent of Landlord (which consent shall not be unreasonably withheld). Consent by Landlord to one such assignment, subletting or license shall not be deemed to be a consent to any subsequent assignment, subletting or license. An assignment, subletting or license without the prior written consent of Landlord or an assignment or subletting shall be absolutely null and void and shall, at Landlord’s option, terminate this Agreement and start the eviction process of the Tenant(s) and occupants.

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Clause #7: Renewal and termination

Lease renewal is a tricky thing. Some landlords prefer an automatic renewal approach, but it is very advisable to take it case by case.

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TERMINATION, RENEWAL AND HOLDING OVER

This lease agreement is not constructed to be automatically renewed at the end of the term for which it is drawn. Both parties will need to sign a new agreement in order to activate a renewal term. If Tenant(s) intends to vacate the Premises at the end of the lease term, Tenant(s) must give at least three (3) months written notice prior to the end of this lease. Either party may give three (3) calendar months written notice to terminate this Tenancy Agreement. In the event of the Tenant becoming or remaining a tenant by holding over after the expiration of the term hereby created, the term thereby created by the holding over shall be determinable by three months’ notice in writing by either party.

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Clause #8: Repairs and maintenance

Both you and your tenant should have particular maintenance obligations under the rental agreement, and these should be clearly set out in the terms. The tenant, for example, should be responsible for maintaining clean premises, as well as be responsible for any damage he or she causes. The terms should also obligate your tenant to inform you of any repairs that need to be made to the premises for which you are responsible.

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TENANT OBLIGATIONS

The Tenant hereby agrees and undertakes;

(i) to keep the interior of the Leased Premises and all additions thereto including all doors and windows and all sanitary and electrical fittings and windows and glasses in good and substantial repair, condition and decoration and to keep all locks, taps, washers, geysers, drains and fuses in good working order.

(ii) to take care of the swimming pool, if any, on the Leased Premises by causing it to be filled, cleaned, and treated with chemicals; and performing all necessary work for the maintenance of the swimming pool.

(iii) in the event of failing to repair, maintain or keep in repair the facilities mentioned in (i and ii) above, to pay the Landlord a fair proportion of the cost of such repair or maintenance as may be determined by a qualified contractor appointed by the Landlord in mutual agreement with the Tenant.

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Use a full lease

Even though these clauses are helpful, they don’t comprise a complete lease. Make sure you have a quality and comprehensive lease agreement. Should you need our support, we can help.