Lease Essentials for Every Landlord and Tenant
Written by Peter McFarland, Esq. on 4/2/2014
As a landlord or tenant, you know that the lease you sign will be the written expression of the agreement you negotiated for the rental of a property. But how important is the lease document when the rubber meets the road? And what’s really in the lease?
How Important is the Fine Print?
In many real estate matters, the law is just a placeholder for what should be the rule absent an agreement otherwise. So what does that mean? Where there is a conflict between what the law says and what the lease says, the lease will control. The simplest examples of lease provisions impacted by this include notice, security deposits, and rental liability issues. Therefore, the fine print in the lease is extremely important to understand as it will have a large bearing on resolving disputes in court or at arbitration.
Exceptions to this general rule apply, of course. Not all rights can be contracted away, and not all duties can be discharged by contract. If you are unsure whether a lease provision may be valid, it’s important to discuss whether the law would even recognize the lease provision with a qualified professional.
So what is a Valid Lease?
Leases come in all different flavors. Most landlords use a standard, pre-printed form. But the lease does not need to be standard and some landlords prefer to draft their own. In order to be valid, a lease need only be a handwritten document specifying the names of the parties, the property that is being leased, the rights and responsibilities of the parties, the terms and conditions of the agreement, the rental amount, and finally the signatures of the parties.
What’s Normally in a Lease?
The following are normal provisions found in a lease and should generally be included (but note this list is absolutely not exhaustive):
- Premises’ condition – there should be documentation of any damage, mold, roof collapses, plumbing leaks, etc. before the tenant takes possession of the property.
- Offsets – tenants should not assume they may withhold rent because something isn’t working properly and tenants should be aware that doing so could actually lead to an eviction (called a Forcible Entry and Detainer in Colorado). The lease should explain the ability (or lack thereof) of the tenant to offset rent payments for problems arising with the property.
- Security Deposits – the lease should set the amount of the deposit as well as the conditions that require the deposit to be returned or withheld.
- Pets – the lease should consider whether pets will be allowed, and a special pet deposit may be required.
- Insurance – both the tenant and the landlord should carry adequate insurance, and the lease will often require both to obtain this insurance.
- Lead-Based Paint Disclosure – Any lease for a rental that was built before 1978 is required by federal law to provide the renter with a Lead-Based Paint Disclosure.
- Smoke-Free Premises – Colorado law leaves it to the Landlord whether tobacco smoking will be allowed on the premises, and the Landlord may ban all smoking on the premises. Recreational marijuana is such a new development in Colorado that the law is untested as to whether a landlord can ban the use and smoking of the substance. However, nothing in Colorado’s Amendment 64 would suggest that a Landlord would be overstepping to ban the use of marijuana on a rental property.
Again, the list above is by no means exhaustive but it should provide some idea of what to expect when looking over a lease.
Leases are critically important to the landlord tenant relationship. Generally speaking, the lease will govern the relationship between the parties and list the terms of the agreement as well as the rights and responsibilities of the parties. If you are a landlord seeking a custom lease or looking to rework a current lease the attorneys at Estill & Long, LLC can assist you. Similarly, if you are a tenant who wants a second opinion about a custom lease or just would like some explanation of the fine print, give us a call today.
About Peter McFarland, Esq.
Peter earned his Juris Doctor (J.D.) degree at the University of Denver. After becoming licensed to practice law in the State of Colorado, he earned his Master of Laws (LL.M.) in Taxation at the University of Denver. In his current role, Peter counsels real estate investors, landlords, and tenants with respect to their rights and duties under the law. He gained valuable experience as an attorney with the University of Denver’s Low Income Tax Clinic during his graduate school studies and has been counseling clients at Estill & Long, LLC since his arrival in early 2013.