Binding Arbitration 480x270 - What Information Should Be in a Binding LeaseA binding lease for a landlord is the number one defense for controlling the property when a tenant is allowed to use it as a temporary home or business. However, if the lease is not put together well, ambiguities or unmentioned details can often end up being the source of problems and headaches. So controlling the lease language is the best way for a landlord to prevent issues before they occur with a tenant.  Here’s how:

  • First off, the lease needs to be very clear on who the parties to the agreement are, what’s being leased, where, and for how long. This sounds like a very basic concept that would automatically be in a binding lease, but it can be amazing how often someone forgets at least one of these elements. The best way to make sure the parts are present is to ask the question out loud while reading: why, what, where, when and how. If there’s no answer to one of these items, it’s missing.
  • Second, the lease should be absolutely clear on when the rent is to be paid, how much, when, and by whom. There should also be a permanent address where the payment can be made. Do not leave this point as silent. The ambiguity can be the reason a payment is not made timely, and it would be the landlord’s fault for not being clear.
  • Third, the agreement needs to unambiguous with regards to what remedy the landlord has if any of the terms of the agreement are violated or not followed. This ensures that the tenant was fully warned ahead of time and still agreed to the lease anyways. It’s a solid defense later on when the tenant tries to argue he didn’t know.
  • Fourth, if a landlord doesn’t want his property to be changed or modified, which does happen a lot as a person gets comfortable in a place, he needs to be clear that the tenant has no permission to change the residence. If this is left silent, a tenant could easily argue he was “improving” the place to the benefit of the landlord. That can present multiple problems including unwanted change, an argument that the tenant shouldn’t have to pay full rent that month, and repairs to fix afterwards to restore the residence to status quo.

A binding lease, however, can’t provide every protection no matter how well it’s written, especially the vetting of a tenant to ensure he is a good fit (this is why there are so many landlord-tenant attorneys). That comes with a quality background check. This can be in the form of a tenant screening or even a basic credit check. Both will give a landlord a very good idea of a tenant’s potential for being a good partner in a lease agreement or a potential problem.

So when crafting a lease, make sure to have the above elements taken care of, but also do the advance work beforehand to have a good tenant to work with as well.