The Top Lease Agreement Terms You Need To Include  

30.06.21 12:00 PM Comment(s) By Assetsoft

The Top Lease Agreement Terms You Need To Include

As a property manager, making lease agreements can be a complex task. It includes many clauses and terms that can make you wonder--why signing a lease agreement is necessary.  


Lease agreements are legal documents that offer protection to both the tenant and property manager. Even if you have the best relationships with your tenants, verbal agreements cannot be relied upon. That is why most property managers prefer clarifying the terms in writing.  


Lease agreements can appear complicated. They include many clauses and sentences which can make you confused. Even if a legal professional manages your lease agreement, as a property manager, you need to understand the terms included in it.  

The top lease agreements property managers should know

Our list of top property management lease terms will help you choose the right terms for your company. Stay away from legal hassles by including these terms in your contract.  

Occupancy limits

Every apartment has a capacity for the number of people that live there. This is called occupancy limit. This aims to provide comfortable living conditions to every occupant. 

As a general rule, two renters are assigned one bedroom. But this is only to determine the maximum occupancy. You need to consider other factors such as the size of the room, number of bathrooms, and other amenities.  


The Department of Housing and Urban Development’s standard of occupancy is a really helpful guide. It states that: 

  • Every apartment should have a minimum area of 150 sq. ft. meant for the first tenant. 

  • Every other tenant requires an extra 100 sq. ft.  

  • A single-occupant bedroom should have at least 70 sq. ft. of floor area and a double occupant should have 50 sq. ft. per occupant. 


Abiding by the laws, you can have your own occupancy limits. Make sure you clearly state this in your lease agreement. 

Name of tenants

Many property managers make the mistake of including only one person in their lease agreement. Even if a single person signs the document, you need to include the names of all the adults living there. In the case of a commercial property, you need to include the names of all business partners.  


As a property manager, this gives you two benefits: 

  1. If one tenant cannot pay the rent, you have the right to collect the whole amount from other tenants. 

  1. If one tenant breaks the rules, you have the right to terminate the agreement for all the tenants. 


When you include all the occupants in the lease agreement, they are collectively responsible for fulfilling the terms, This includes rent, deposits, and maintenance. It also makes the apartment available only to the adults and their minor children in the lease. 

Length of tenancy

The length of tenancy is the duration for which the lease is valid. Typically, a lease agreement starts from the 1st of the month. You can decide to have a one-month, three-month, or yearly agreement. Usually, a 11-month lease agreement is signed to save on stamp duty and other charges. 

For short-term tenancies, a month-to-month agreement works the best. These agreements usually renew themselves until termination. This gives flexibility to both the landlord and the tenant. However, year-to-year leases are more convenient. They provide more stability in occupancy. They also help cut down on additional expenses for making the apartment ready for a new tenant. 

Rent stipulations

Your lease agreement needs to clearly state the details of rent payment. This not only means the rent amount, but also the frequency and method of collection. You can look at the price of rental properties around you, before determining your rent amount.  


Usually, property managers collect rent at the start of the month. The agreement should also state other details such as grace period, late payment fees, and other charges.  


You also need to be clear about the acceptable payment methods. You can ask them to mail checks at a particular address. Or, you can give them an option of digital payments, which is popular among millennials. You can also state the number of late payments before a renter gets evicted. 


Many property managers report difficulty in rent collection. Using clear lease terms and property management software, you can easily solve your rent collection problems. 

Security deposits

Security deposits provide financial backup in case a tenant breaks the lease agreement. In the contract, you need to state the exact amount of deposit collected and the rules for a refund. 

While the deposit is meant to pay for maintenance and repairs, most states have restrictions on where you can use the deposit. 


You need to cover all details of the security deposit in your lease agreement. For example, if you hold the deposit in a bank account, you need to specify the interest it will earn in the duration.  

Some states require you to hold the deposit in a separate account or trust. Check with the state rules to understand how you can utilize the deposit and where you can hold it.  

Utilities and services

Your property might have certain utilities and services that are included in the rent. Some other services might need extra payment as per use. You need to specify the included services in your lease agreement. Some utilities like electricity, gas, and cable can be paid for by either the tenant or the landlord. Clearly state which amenities are covered by you and which the tenant needs to pay for. 

House rules

House rules prevent any future problems during the tenancy. A lease agreement should carry all the rules, whether they are simple or legal requirements. 

For example, if you have ‘noise-free hours’ at certain times a day, you need to state the duration, details, and repercussions of breaking the rules. You can also include a standard procedure if a tenant wants to raise an issue. 

You need to also include your restrictions on illegal activities. 

Pet policy

Include your pet policy in your lease agreement. State clearly if you do not allow pets. If you do allow them, include details like the number, size, and type of pets. Also mention general pet rules such as cleaning the litter and areas where pets aren’t allowed. Also make the tenant aware of any house rules that the pet might breach, such as constant barking during noise-free hours. 

Tenant insurance policy

Most property insurances require tenants to have their own insurance. That’s why it's important to have tenant insurance mentioned in your lease agreement. It provides financial protection to renters in case something happens to their property.   

Right to entry terms

Every tenant has the right to privacy. That said, as a property manager, you can enter the property in some conditions. Include situations in which you can enter the apartment such as routine inspections and checks. Also, state the period of advance notice you will provide to the tenant. 

Any breach of rules allows the tenant to claim a violation of privacy. 

Maintenance and repairs

Both tenants and property managers can be responsible for the maintenance of the property. The lease agreement should clarify who is responsible for what repairs. Are you paying for electric appliance repairs? Is the tenant going to handle repainting the apartment? Specify which party pays for the different maintenance issues. 

Also, clarify what home alterations are acceptable. Repainting, wall hanging and other permanent changes should be clearly discussed in the agreement. 


Allow your tenant to inspect the property before handing over the keys. This allows your tenant to see any damages and helps avoid confusion later on. 

Common area maintenance

If you rent multiple properties that share a common area, you need to include the maintenance terms in your lease agreement. If you collect maintenance fees from all tenants, you should include details such as what services are they used for, and how much each tenant pays. 

You need to also consider the scenario where a tenant damages something in common areas. Are they the only ones paying? Or will you pay from the maintenance fund? Include answers to these questions in the contract. 

Notice periods

If a tenant wants to leave the apartment, they have to serve a notice period. This can be anywhere from 1 month to 6 months. Your rental agreement should include the required notice periods for vacating a property. It should also include details like security deposit refunds, house repairs, and inspections. 


Many of the lease terms can be easily maintained by opting for property management software. These simplify all your property management tasks such as managing, marketing, and much more.  

Make property management easier with Assetsoft

While you handle the lease agreement, leave your software requirements to us! At Assetsoft, we build robots and tools to help property managers run their businesses smoothly. We can provide strategy, advise on technology and also implement it for you.  


Our popular software choices are Yardi and MRI, both of which are excellent property management platforms. Our expert team can help you get the most out of the software. We integrate various tools to bring the best out of all platforms. 


Facing difficulty in implementation? Want more features? Book your consultations now at Assetsoft! 


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