What Happens When a Lease Is Missing Key Terms?

How to Create a Lease Agreement: Key Terms to Include

The Lease is the foundation of the Landlord-Tenant relationship. If you have a rental unit — whether it’s a single-family home, duplex, or apartment – you need a detailed Lease Agreement. 

A good Lease protects your rental unit, sets clear expectations with tenants, and helps avoid future disputes. When it comes to drafting a rental agreement, the details matter. If you have an incomplete Lease Agreement or have vague Lease Agreement terms, it can lead to legal issues, disputes, and bad rental outcomes. 

Property owners need to know what terms are essential to ensure their rental agreement is legally compliant, enforceable, and effective. We’ll walk you through the most important Lease Agreement terms and give you tips on how to create a Lease Agreement. 

Ready to draft a rental contract that’s guaranteed to comply with your state’s laws? Use ezLandlordForm’s Lease Builder to customize a legally compliant Lease Agreement in minutes. 

What Are Considered Key Terms in a Lease Agreement 

The Lease Agreement is a legal contract that defines the legal relationship between a Landlord and Tenant. It defines Landlord and Tenant rights and responsibilities and provides remedies if either party doesn’t meet those responsibilities. 

If you’re a new property manager and not sure how to create a Lease Agreement, here’s a quick checklist of some key Lease Agreement terms: 

• The full names of all parties
• The property address, including a clear description and unit number
• The tenancy term – if it’s a fixed-term contract, include the start and end dates
• Rent amount, including due date
• Security deposit amount
• Utilities – who is responsible for services like electricity, gas, water, internet, and trash 
• Maintenance – Landlord and Tenant responsibilities for preventative maintenance and ongoing maintenance
• Repairs – who is responsible and what is the process for reporting 
• Key rules – occupancy limits, pet policy, smoking policy, guest policy 
• Renewal and termination – required notice periods, early termination fees, and conditions for eviction
• Default and remedies – outlining what constitutes a breach of the agreement and what the remedies are
• Insurance requirements
• Required disclosures, including local, state, and federal disclosures 
• Signatures – signed and dated by all parties

What Missing Lease Terms Can Create Legal Problems 

As a general rule, the more detail you include in your rental agreement, the better. It helps to ensure compliance, avoid confusion, and minimize the risk of disputes. 

That said, there are some terms that you must include in your Lease. Omitting these terms not only leads to confusion but can create legal issues. Here are the missing Lease Agreement terms that most commonly create legal problems for property owners: 

• No clear start or end date. When a fixed-term agreement is missing this information, courts will likely treat it as a month-to-month rental agreement. 
• Ambiguous rent terms. If your contract has ambiguous rent terms, it increases the risk of late or missed payments. This can make late fee terms unenforceable and create complications if you ever need to file an eviction due to nonpayment of rent. 
• Maintenance and repair terms. Unclear maintenance clauses can lead to Tenant disputes, legal liability, and withheld rent. 
• Incomplete security deposit terms. If your Lease does not comply with your state’s security deposit requirements, you could lose the right to withhold the security deposit and face penalties of 2-3x the amount of the deposit. 
• Missing required disclosures. Failure to include disclosures required by state or federal law can lead to invalidating provisions, fines, and damages. 

How Courts Interpret Leases With Missing or Vague Terms

If you end up in court, the Lease can be the difference between winning and losing. If your Lease is unclear on terms or is missing Lease terms, you’re at the mercy of the court to interpret the contract. 

Here are general rules on how courts interpret residential rental contracts: 

1. If a contract term is unclear, the court will interpret it against the party who drafted it. For Landlords, that means the court will interpret the terms in favor of the Tenant. 
2. If the Lease fails to address a term, courts will refer to applicable state or federal Landlord Tenant laws. 
3. If terms are unclear, courts will use a standard of reasonableness and look to the parties’ behavior to interpret the rules. 
4. Courts will not enforce illegal or otherwise prohibited provisions, including those that violate housing codes, anti-discrimination laws, or Tenant Protection Laws. 

Common Lease Terms That Are Often Overlooked 

When Landlords don’t know how to create a Lease Agreement, they often overlook some important terms that can lead to problems. Here are 5 of the most commonly omitted terms are: 

1. Joint and several liability: This might sound like legalese, but it’s a clause that matters for property owners. When multiple Tenants enter into an agreement, this clause states that they’re jointly and severally liable to comply with the terms. 
2. Notice requirements: Key for ensuring smooth renewals and move-outs. 
3. Clear pet policies: It’s not enough to just say you allow pets. You need a detailed pet policy or pet addendum – including the number of pets allowed, the type of pets allowed, and weight limits. 
4. Alterations and Improvements: The Lease needs clear rules about what a Tenant can and cannot do to change or improve a rental unit.
5. Security deposit procedures: Outlining who is responsible for holding and returning the security deposit and how deductions are handled. 

Best Practices for Drafting Enforceable Leases 

The reality is that there are more legal disputes from poorly drafted Leases than there are from bad behavior on the part of Landlords or Tenants. You don’t want to find yourself with legal disputes because of an incomplete Lease Agreement. This is why knowing how to create a Lease Agreement is key for self-managing property owners. 

Here are some tips for drafting a legally enforceable tenancy agreement: 

• Know local, state, and federal Landlord Tenant laws and ensure compliance with all requirements. 
• Use clear and plain language. Avoid legal jargon and overly broad language. 
• Be precise about rent payment terms, including rent amount, late fees, and grace periods.
• Be thorough. Don’t just cover basic terms. Cover all rules and responsibilities, including details like pest control, snow removal, and yard maintenance. 
• Attach all required disclosures and document that Tenant has received these disclosures. 
• Include a severability clause stating that if one clause is invalid, the rest of the contract is enforceable. 
• Ensure terms are reasonable. If your Lease terms are overly aggressive or unconscionable, courts can find them invalid and could even issue fines or penalties. 
• Update your Lease template regularly. Laws change and Landlords need to comply with Lease requirements by state. Review state laws annually, especially in states with lots of Landlord-Tenant requirements – for example, California, New York, Oregon, and New Jersey. 

Landlord Checklist: Essential Lease Terms Every Agreement Should Include 

Ready to draft or review a Lease. Here’s a checklist to ensure you’re protected. 

• Full name of all parties
• Tenancy term, including start and end date
• Rent payment details
• Security deposit amount and terms
• Utility responsibilities 
• Maintenance responsibilities, including the yard, outdoor spaces, & snow removal
• Repair responsibilities 
• Rules – including occupancy limits, pet policies, and subleasing rules
• Joint and several liability clause 
• Severability clause 
• Insurance requirements 
• Default rules and remedies 
• Required disclosures 
• Renewal and ending the tenancy
• Signatures and date 

Once you’ve drafted your rental agreement, here’s a final check to consider: 

1. Does the Lease comply with all local, state, and federal laws? 
2. Does it have enough detail? Have I covered all rules and responsibilities? 
3. Is the language clear, precise, and easy to read? 

Create a Legally Compliant Lease in Minutes 

If you’re not sure how to create a Lease Agreement, it’s best to use a trusted partner. A lot goes into drafting a rental agreement that is legally compliant and detailed. Rather than trying to create one from scratch, let our Lease Builder do the hard work for you to ensure enforceability and Lease validity. 

ezLandlordForms has created millions of rental contracts for Landlords like you. We’ve done all of the hard work, so you don’t have to. Customize a state-specific Lease Agreement in minutes to ensure you and your rental unit are protected.