By Blackbird Realty
LAS VEGAS, NV. – One of the most important parts of any owner’s business is their lease agreement. Sadly, many owners, especially newbies make the mistake of choosing generic lease agreements that they’ve found online and this choice almost always comes back to hurt them later.
Regardless if you’re a new or long-time owner, you owe it to yourself to invest in having a lease agreement created specifically for your business.
Before having a new lease, the agreement created, you should consider having one or all of the clauses added to your lease:
Severability. This is one of the most important lease clauses. Basically, this clause states that if one part of the lease is deemed to be illegal for some reason, the rest of the contract is still legally binding.
Subleasing. Decide whether you’re comfortable with residents subleasing the apartment; and if so, under which conditions. Be sure to detail those as part of the initial contract (e.g. screening process for a new resident, inclusion on a new lease, one-time fees associated with sublease). Don’t wait until the resident contacts you to tell you they’ve already moved out and subleased the unit to someone else–at that point, you have little recourse.
Joint & several liability. This is one of the more common lease clauses. Essentially, it means that each party to the lease is jointly and individually responsible for fulfilling the contract. This allows you to go after all residents in the event of default, and prevents roommates from finger-pointing and trying to blame each other. For example, even if just one person is responsible for damages, all are held liable. This encourages roommates to resolve issues amongst each other so they don’t get stuck footing the bill.
Renewal. Detail how the lease will be automatically renewed, if at all. Some lease clauses require the landlord and/or residents to give at least 60 days’ notice if they don’t plan to renew the lease at the end of its term; some don’t. This clause can also be used to add an escalator (or percent increase) that the lease will go up upon renewal (say, 2% per year). Including the escalator helps residents to anticipate rent increases so they aren’t caught off-guard.
Use of premises. This clause details who can use the unit (e.g. only the residents listed on the initial lease) and for which purposes. The language might stipulate that any person staying in the property for more than 2 weeks in any 6-month period will be considered a tenant, rather than a guest; and that the landlord reserves the right to add that person to the lease agreement. Also, be clear about whether the unit is to be used solely for residential purposes, or whether it can be used for short-term stays (Airbnb) or commercial uses (like a resident who bakes goods to sell at a local farmers’ market). Be sure to check local regulations, as there might be laws regarding how residential units in specific zones can be used.
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