Skip to main content

Property Management Blog

Creating a Lease Agreement: Essential Terms and Conditions to Include

Creating a Lease Agreement: Essential Terms and Conditions to Include


A good lease agreement is like a map for legal, mutually satisfying tenancy. It outlines all the details needed to ensure that the landlord and their respective tenants enter into a contract that’s in alignment with state laws and fair to all parties involved. 

During the course of a tenancy, there are many things that could go wrong. Rent can get paid late, damages may occur, and rules may get bent to exploit either end of the partnership. 

It’s for these reasons that creating a watertight lease agreement is essential. Everyone knows where they stand, what to expect, and, perhaps most importantly, what to do when things go awry. But what are the right terms and conditions to include?

If being a landlord is new to you or you simply want to reassess the way you’ve created and enforced leases in the past, this guide will help you to identify all the most important clauses to insert for a smooth and easy rental experience

  1. All tenant names and the number of tenants 

First things first. You need to know exactly who is going to be staying on your property, and how many occupants there will be. Every single adult who will be living on the property needs to provide their name and contact details in order to prevent confusion from occurring. 

It’s also important to stipulate that married couples must provide their individual names and contact information. Sometimes, landlords do not clarify this, and only get provided with one spouse’s details. 

Adding this term to your lease is important not just for the sake of clarity, but also because it prevents tenants from being able to illegally sublet the rooms on your property. 

  1. Tenancy rules and guidelines 

All houses have rules, and yours should be no different. If there are specific rules you think would warrant removal or eviction, they should be added to the lease. After all, you can’t blame tenants for violating rules you haven’t actually communicated. Consider including rules regarding the following:

  • Smoking – There are over 30 million smokers in the US alone. It’s a popular habit that most people like to enjoy in the privacy of their own homes. If smoking is a deal breaker for you, add it to your list of rules. 

  • Pets – If you're going to allow or not allow pets, you need to stipulate this. Pets can cause damage to your property and garden, and you need to make provision for this. If you do allow pets, you should limit the number allowed. 

  • Illegal activity – Adding this rule will limit your potential liability and protect you from getting into trouble should your tenants engage in illicit activities. Selling drugs, using drugs, soliciting prostitution and making excessive noise all fall into this category, but there are others worth researching. 

For the tenancy to be as sustainable and safe as possible, there need to be rules. Adding guidelines like these helps to keep everyone on the same page as they clearly define what’s allowed. 

  1. Landlord’s access to the property 

Over the course of your occupation as a landlord, there may be times when you need to access the property and assess certain situations. It could be to confirm the severity of recent damages, inspect a health hazard, or take care of maintenance. Regardless, it’s important to have rules in place regarding when you are allowed access to the property. 

In an effort to respect the tenant’s lifestyle, most landlords must give at least 24-hour’s notice before arriving at the property, and the arrangement must be communicated beforehand. Tenants are entitled to their privacy. However, you can add a clause which enables you to access to the property in the event of extraordinary scenarios, such as a natural disaster or evidence to suspect illegal activity. 

  1. Maintenance and repair policies

What happens when something breaks or gets damaged? Your lease should factor this in. Your best chance at avoiding legal battles over rent-withholding and security deposits is to include the following policies in your lease:

  • The responsibility of the tenants to maintain sanitary premises and cover any damage that occurs outside of regular wear and tear 

  • A requirement that the tenants alert you to any dangerous or defective conditions

  • Any preferred restrictions on property renovation by tenants (such as painting or installations)

To mitigate legal troubles and keep your property in good condition for as long as possible, tenants need to understand what’s required of them in terms of maintenance and what they can hold the owner responsible for. 

  1. Security and rent deposit 

The price of rent and how much of a security deposit is required upfront should be one of the first things on your lease agreement priority list. Not only should everyone be on clear terms about how much rent costs, but also what constitutes deposit returns when the lease gets terminated and they move on. 

  1. What the rental includes 

Whether your property is furnished or unfurnished, you need to establish an inventory of what the rental agreement includes. From washing machines to parking spaces, make as comprehensive a list as you can of every asset that comes with the property. 

In doing this, you create a full description of the property itself and can therefore assess any potential thefts or damages with more clarity. It is also helpful to include any information about what tenants are specifically not allowed to access. 

  1. All tenant signatures 

Last but not least, you need the signatures of each tenant before concluding your lease agreement. These signatures are generally added in full on the last page, and each page is initialed by the signatories. 

Final thoughts 

Drawing up a legally sound and fair lease is not easy as there are numerous situations to consider, with terms and conditions to match. But when you know what clauses to include, creating an airtight lease doesn’t have to be a chore and you’re more likely to find the best tenants for your property too. 

With these 7 terms and conditions on your lease, you and your tenants can enter into a rental agreement with peace of mind on your side.