Need Help With Rental Home Lease

Aug 30, 2004
Hey guys,

I am ready to rent my first house with several friends. However, we are not familiar with lease agreements and would appreciate it if someone who is familiar with these agreements would take a look for me.

Here is the agreement:


(Term Lease)

This is a legally binding agreement- READ IT CAREFULLY. It is intended to help promote harmony by clarifying the rights, duties and responsibilities of property owners, managers and renter. It may be added to or deleted from by having all parties initial each change.

Verbal agreements often lead to misunderstanding and confusion. ALL BINDING AGREEMENTS MUST BE MADE IN WRITING AND initialed BY BOTH PARTIES. Notices and requests shall be made in WRITING and given to the Lessor at the Lessor’s address or place designated by Lessor and to the Lessee at the rental property

The OWNER is: (owner)

(Hereinafter called the “LESSOR”)

The RENTER is: collectively, (myself and four other people)

(Hereinafter called the “LESSEE”)

The address of the PREMISES is: (address), a 4 bedroom/2 bathroom residence. The Premises do not include the garage.

This Agreement, effective the 12th day of May, 2010 by and between the Lessor and the Lessee, agree upon the following terms and conditions in order for the lessee to use as a residence the above rental property located at _________________________, Santa Cruz, CA 95060.

1. RENT: Tenancy for a Term Lease commencing on May 15, 2010 and continuing through June 15, 2011 at a monthly rate of Two Thousand Five hundred Dollars ($2500). This agreement is contingent upon Lessor’s receipt of a security deposit of $1,000 on or before May 14, 2010 and the remaining balance of the first and last month’s rent plus utilities on or before May 15, 2010. Rent continues to be payable monthly, in advance on the 15th day of each and every month. Rent shall be paid by personal check, money order or cashiers check. Said rent should be sent or delivered directly to ___________________________________, Santa Cruz, CA 95060 or via such other means agreed to by the parties. The foregoing rent amount does NOT include the amounts due from Lessee in connection with utilities at the Premises as described in Paragraph 8, below.

2. LATE CHARGE AND NSF CHARGE: Lessor and Lessee agree that the actual cost to Lessor when Lessee fails to pay rent on time, or when Lessee pays rent by a check which is subsequently dishonored by the bank, is difficult or impossible to ascertain, but the parties agree that Lessor does, in the event of late payments or in the event of a dishonored check, incur certain costs, such as additional bookkeeping and administrative charges, bank charges, lost opportunity costs of the late payment, etc. After making a reasonable endeavor to estimate accurately the approximate costs associated with such a breach, which both parties agree is difficult or impossible to ascertain, the parties agree that, anytime the rent for any given month is paid late, Lessee will in that month pay to Lessor, as addition rent due with the late payment, a late charge in the sum of $50.00 and further agree that, in the event of a dishonored check, Lessee will pay to Lessor, as additional rent due with the payment required to replace the dishonored check, a NSF fee in the sum of $50.00. The parties agree that the payment of these sums does not constitute a license to pay rent late nor does it constitute a license to pay by dishonored check. Rent remains due on the fifteenth day of the month and there is no grace period for the payment of rent. A three-day notice to pay rent or quit may be served at anytime after the eighteenth day of the month irrespective of the existence of the late charges as set forth herein. If such notice is served, it may include the late charge (or NSF charge, if applicable) which charges, as set forth above, are payable as additional rent. Any failure by Lessee to pay rent or other charges promptly when due, or to comply with any other term or condition hereof shall at the option of the Lessor forthwith terminate this tenancy.

3. REPAIRS. As between the parties, Lessee shall be responsible for making repairs to the property that are for an amount less than One Hundred Dollars ($100) per repair occurrence. This includes without limitation the repair of all appliances located on the Premises, plumbing, electrical, heating and other equipment and amenities on the Premises. For clarification purposes, if the cost of repair for such item exceeds $100, Lessor shall bear the full cost of repair. In addition, Lessor agrees that Lessor will bear the cost of any repair required on the washer, dryer and refrigerator that is discovered during the initial two-week period of the lease term (i.e., on or before June 1, 2010). Notwithstanding the foregoing, Lessor shall not be responsible for repairing the microwave oven included on the Premises.

4. USE OF PREMISES: The Premises shall be used and occupied by Lessee exclusively as a private single family residence, and neither the Premises nor any part thereof shall be used at any time during the term of this lease by Lessee for the purpose other than as a private single family residence. Lessee shall comply with all sanitary laws, ordinances, rules, and orders of appropriate governmental authorities affecting the cleanliness, occupancy, and preservation of the demised premises, and the sidewalks connected thereto, during the term of this lease.

5. MAINTENANCE: Lessee shall properly use, operate and safeguard the Premises, including if applicable, any landscaping, furniture, furnishings, appliances (e.g., refrigerator, microwave, washer and dryer) and all mechanical, electrical, gas and plumbing fixtures, and keep them and the Premises clean, sanitary and well ventilated. Damage caused by rain, hail, or wind as a result of leaving windows or doors open, or damage caused by overflow of water, or stoppage of waste pipes, breakage of glass, damage to screens, deterioration of lawns and landscaping, whether caused by abuse or neglect is the responsibility of the Lessee. Lessee agrees to provide pest control in the event it is needed. Notwithstanding the foregoing, Lessee shall not be required to provide any pest control related to termites. Lessor agrees to maintain the landscape.

6. VEHICLES AND PARKING: Lessee agrees never to park or store a motor home, recreational vehicle, boats, campers, buses or trailers of any type on the premises. Parking spaces are to be kept clean. Vehicles leaking oil, gas or other motor vehicle fluids shall not be parked on the Premises. Lessee agrees that no vehicle may be repaired, nor may any vehicle be stored on the property without a current registration and tag. For clarification purposes the foregoing shall not restrict Lessee from washing Lessee’s vehicle(s) on the Premises or conducting minor maintenance or repair to Lessee’s vehicle(s) on the Premises. Lessee agrees that any vehicle without current registration and tags may be towed and stored at Lessee expense. One parking spot is included with the Premises provided Lessee does not tandem park or otherwise block access of entry and exit of surrounding vehicles.

7. STORAGE: Lessee shall store only personal property Lessee owns, and shall not store property claimed by another or in which another has any right, title or interest. Lessor shall not be responsible or held liable for any loss or damage to the property stored in these compartments. Lessee shall not store any improperly packaged food or perishable goods, flammable materials, explosives, hazardous waste or other inherently dangerous material, or illegal substances. Any shed on the property is not waterproof.

8. UTILITIES: The Lessee shall pay for all utilities for the property including without limitation: PG&E, Municipal Utilities and Water and Waste Removal Services. Lessor agrees to activate and maintain all service accounts with PG&E, Municipal Utilities, Water and Waste Removal Services (“Lessor Utilities”). Lessee agrees to pay a flat monthly fee to Lessor in connection with the Lessor Utilities. The flat monthly rate shall be a total of $150 for the initial month of the lease term. Lessor expressly agrees to such amount on the condition that Lessee’s occupancy of the Premises during such initial month to be minimal. Thereafter, the flat monthly rate shall be increased to an amount equal to a total of $375 per month. If additional person(s) occupy the Premises the foregoing fee shall increase pursuant to Paragraph 29, below. Lessee expressly agrees that Lessee’s use of electrical heaters will be minimal at all times and that Lessee shall rely on the gas heating system provided with the Premises to meet Lessee’s heating needs.

9. CLEANING: Lessee accepts the Premises in its current state of cleanliness and agrees to return it in a like condition.

10. SECURITY DEPOSIT and MOVE IN COSTS: Lessee agrees to pay $1,000 as a security deposit plus first and last month’s rent and utilities prior to the lease term start date. The parties agree that the total amount of the first month and last month’s rent plus utilities is an amount equal to $5,525. All or any portion of the security deposit may be used, as reasonably necessary, to: (a) cure Lessee’s default in payment of Rent (which includes Late Charges, NSF fees or other sums due); (b) repair damage, caused by Lessee or guest or licensee of Lessee; (c) clean Premises, if necessary, upon termination of the tenancy; and (d) replace or return personal property with equal or higher quality item. Security deposit will not be returned until Lessee has vacated the Premises. Any security deposit returned by check shall be made out to the Lessee named on this Agreement, or as subsequently modified.

11. PETS: Lessee shall not keep, or permit to be kept, in or out of said premises any dog, parrot, or other bird or animal.

12. RESIDENTS OBLIGATIONS: Lessee shall not violate any city, county ordinance or state law in or about said premises. Lessee shall not make any excessive noise such as will disturb the peace and quite of neighbors. Taking affirmative action to insure that nothing exists which might place the Lessor in violation of applicable building, housing and health codes. Keep the Premises clean, and sanitary; removing garbage and trash as they accumulate. Assuring that the property belonging to the Lessor is safeguarded against damage, destruction, loss, removal, or theft. Lessee warrants that he/she will meet the above conditions in every respect, and acknowledges that failure to do so will be grounds for termination of this agreement and loss of all deposits without further recourse.

13. SUBLETTING: Lessee agrees not to assign this agreement, nor to sub-let any part of the property, or to allow any other person to live therein other than as named on this contract, without first requesting permission from the Lessor and paying the appropriate surcharge. Lessee shall not sublet the demised premises, or any part thereof, or assign this agreement without the Lessor’s written consent. Further, that covenants contained in the Rental Agreement, once breached, cannot afterward be preformed; and that eviction proceedings may be commenced at once without notice.

14. COURT COSTS: Lessee agrees to pay all court costs and Attorney’s fees incurred by the Lessor in enforcing legal action or any of the Lessor’s other rights under this agreement or any state law. In the event any portion of this agreement shall be found to be unsupportable under the law, the remaining provisions shall continue to be valid and subject to enforcement in the courts without exception.

15. ALTERATIONS: That all alterations, additions, or improvements made in and to said premises shall, unless otherwise provided by written agreement between the parties hereto, be the property of Lessor and shall remain on and be surrendered with the premises. No alterations can be done without written consent by Lessor.

16. ABANDONMENT: If Lessee leaves said premises unoccupied for 7 days while rent is due and unpaid, Lessor is granted the right hereunder to take immediate possession thereof and to exclude Lessee there from; removing at his/her expense all his/her property contained therein and placing it into storage at Lessee expense.

17. RENTERS INSURANCE: Lessor does not provide insurance for Lessees personal property or automobile. Should Lessee negligence be the cause of a fire, Lessee may be held responsible for the damage of the property of others, including Lessor’s property. Lessees are encouraged to obtain Renters Insurance in an amount sufficient to cover any personal possessions of Lessee together with a reasonable level of liability coverage of the actions of Lessee or Lessees guests or invitees.

18. TERMINATION: If Lessee’s tenancy of the Premises continues by mutual agreement of the parties after expiration of the initial one year lease term, both Lessee and Lessor shall give forty-five (45) days written notice in the event that the rental is to be vacated. This notice period may be lengthened or shortened by written agreement. (Less than 7 days notice to vacate is prohibited by California Civil Code Section 1946 unless the terms and conditions is not met.)

19. SUBORDINATION: This contract and all rights of Lessee arising hereunder are expressly agreed to be subject and subordinate in all respects to the lien of any present or future mortgages which are or may be placed upon the property of Lessor or assigns of Lessor and to all other rights acquired by the holder of any such mortgages. As used herein, the term “mortgage” shall include deeds of trust or any similar security interest.

20. SUCCESSORS IN INTEREST: If the property is sold or the ownership interest otherwise transferred, the successor in interest of Lessor shall be deemed the assignees of all rights arising hereunder, and shall be entitled to enforce the provisions of this contract as against Lessee. Nothing in this provision shall be construed as conflicting or superseding the foregoing subordination or as requiring a continuation of the tenancy in the event of a foreclosure or other involuntary transfer of ownership.

21. LESSORS AGENTS AND ACCESS: The Lessee will permit the Lessor and/or his/her agents, upon reasonable notice (24 hours), to enter the premises between 8:00 a.m. and 6:00 p.m. to inspect, redecorate, clean, or repair the premises or to show the rental to prospective renters, purchasers, or representatives of lending institutions. Such entries shall take place only with consent of the Lessee, which consent shall not be unreasonably withheld. The Lessee will permit the Lessor to conduct an inspection of floors, tile, grout, bathroom, carpet and kitchen. Inspections are at the discretion of the Lessor. If the Lessor or his/her agent reasonably believes that an emergency exists which requires an immediate entry, such entry may be made without the Lessee’s consent. If such an entry occurs, Lessor shall, within two days thereafter, notify the Lessee in writing of the date, time, and purpose of such entry.

22. WORKER’S WARRANTY: All parties to this agreement warrant that any work or repairs performed by the Lessee will be undertaken only if he/she is competent and qualified to perform it, and the person performing the work will be totally responsible for all activities to assure they are done in a safe manner which will meet all applicable statutes. They further warrant that they will be accountable for any mishaps or accidents resulting from such work, and that they will hold the Lessor free from harm, litigation or claims of any other person.

23. RADON: Radon is a naturally occurring radioactive gas that when it has accumulated in a building in sufficient quantities may present health risks to persons who are exposed to it over time. Levels of radon gas that exceeds federal and State guidelines have been found in buildings. Additional information regarding radon and radon testing may be obtained from your county public health office.

24. LEAD-BASED PAINT: Houses built before 1978 may contain lead-based paint. Lead from paint, paint chips, and dust can pose health hazards if not taken care of properly. Lead exposure is especially harmful to young children and pregnant women. Before renting pre-1978 housing, landlords must disclose the presence of known lead-based paint and lead-based hazards in the dwelling. Tenants must also receive a federally approved pamphlet of lead poisoning prevention.

25. SMOKE DETECTORS: Smoke detectors have been installed in this residence. It’s the Lessee’s responsibility to maintain its appliance including testing periodically and replacing batteries as recommended by the manufacturer. In the event the detector is missing or inoperative, the Lessee has an affirmative duty to notify the Lessor immediately.

26. DEFAULT BY LESSEE: Any breach or violation of any provision of this contract by Lessee or any untrue or misleading information in Lessee’s application shall give the Lessor or his agent’s the right to terminate this contract, evict the Lessee and to take possession of the residence. The Lessee agrees to a forfeiture of the security deposit and Lessor may still pursue any remaining amounts due and owing.

27. LIABILITY: Lessor shall not be liable to Lessee or to any guests or invitees of Lessee for any damage or losses to person or property arising from any cause including, but not limited to, theft, burglary, assault, vandalism, fire, flood, water leaks, rain, hail, ice, snow, smoke, lightning, wind, explosion, interruption of utilities, earthquake, or any other condition over which the Lessor had no control

28. BANKRUPTCY: In the event of bankruptcy or state insolvency proceeding being filed against the Lessee, this heirs, or assign, at the option of the Lessor, his agent, heirs, or assigns, and immediately declare this contract null and void, and to once resume possession of the premises. No judicial officer shall ever have any rights, title, or interest in or to the above-described property by virtue of this agreement.

29. OCCUPANCY: The Premises shall be occupied only by the following persons:

(Lists the names of myself and the four other people)

In the event additional persons occupy the Premises for longer than seven (7) consecutive days, the rent shall increase by fifty dollars ($50) per week such additional person occupies the Premises AND the monthly fee for Lessor Utilities shall increase by seventy-five dollars ($75) per such additional person.

30. NOTIFICATION OF RENT CHANGES: Lessee shall be given written notice of rent changes not less than sixty (60) days in advance of the day rent is due with respect to any changes to the rent for the Premises which may go into effect after expiration of the initial lease term on June 15, 2011.

31. SMOKING: Lessee shall not smoke inside or outside said premises and/or allow smoking inside or outside said premises.

32. ACKNOWLEDGMENT: In this agreement the singular number where used will also include plural, the Masculine gender will include the Feminine, the term Owner will include Landlord, Lessor, and the term Resident will include Tenant, Lessee. The bellowed-signed parties acknowledge that they have read and understand all of the provisions of this agreement. This contract is bound by all heirs, executors, LEGAL CONTRACT. This is a legally binding contract. If you do not understand any part of this contract, seek competent legal advice before signing.

Here is some background on the house.

1) The house has been completely rebuilt. New walls, new floors, new paint, new appliances. Everything is new. It looks like a new house.

2) The amount they are asking is very low for the area. They want $2500/mo. Most four bedroom houses in the area cost between $3200 to $3600/mo. This place is a steal, especially considering its condition.

3) The landlord goofed and offered the place at a price too low. So he tries to cover his bottom by charging a flat rate on utilities. Utilities really only cost about $40/person. He wanted to charge each of us $100/person for utilities. I was able to negotiate him down to $75/mo, as even with the profit that he is making, the house is still a good deal. So the flat rate for utilities doesn't bother me.

4) The lease is written by the landlord's daughter, who is an attorney. However, I don't think her area of specialty is leases. The $100 repair clause is sort of ridiculous, but I can live with it considering that I will only be there for a year and the place is new.

What do you guys find to be wrong with the lease? I am really not familiar with leases, so I would really appreciate some help here. The terms seem reasonable to me, but what do I know?

Thanks in advance!
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Don't like the repair clause, but if you think it's good value, then go for it.

Check that you are not in breach of clause 4, as 4 people sharing a house isn't as per a family. Down here, you can't get contents insurance for more than 3 surnames. If all four of you are on the lease, then that's the deal, but it will make it tricky if one of you moves on.

5 is a bit rich, with you providing pest control. The overflow of water is a bit non specific.

Clause 17, he's owning the property, and leasing it out, he should have coverage for loss of his property. Yours and your mates, take your chances.

It's not that bad/onorous, but puts way more costs on you than an Oz lease could.

If you are good mates, and given the rent, why not jointly buy ?
i would not sign up for it.

they have basically made what is the landlords problem, yours.

I pay my rent and utility bills (based on what I actually use); they fix everything. simple.

FWIW my power bill is $120 -$150 per month, water $20. Family of five.

He will be getting $300 per month for utilities, that is exorbitant.

Also, I have never heard of a tenant being held liable through negligence if there was a house fire. while i guess there is some reason to it (i.e. don't put the toaster under the curtain) it's just something odd to see in a contract. i guess they have fire investigators who can pinpoint the source of fires be it a stove or toaster or wiring in the roof or walls. still, that clause makes me nervous.
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Originally Posted By: crinkles
i would not sign up for it.

they have basically made what is the landlords problem, yours.

I pay my rent and utility bills (based on what I actually use); they fix everything. simple.

FWIW my power bill is $120 -$150 per month, water $20. Family of five.

He will be getting $300 per month for utilities, that is exorbitant.

Also, I have never heard of a tenant being held liable through negligence if there was a house fire. while i guess there is some reason to it (i.e. don't put the toaster under the curtain) it's just something odd to see in a contract. i guess they have fire investigators who can pinpoint the source of fires be it a stove or toaster or wiring in the roof or walls. still, that clause makes me nervous.

Those are not bad utility rates for California!
Clause 17, If the house burns down and it was caused by your mistake however innocent, you have to pay for a new house! This should be covered by landlords insurance.
Dont waste your money on renters insurance unless you have very valuable property or wild partys,take that money and have a good real estate attorney look at this lease it would not cost that much split 4 ways.
"If you do not understand any part of this contract, seek competent legal advice before signing. "
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Anything that you suspect that could end up costing you big money should be reviewed by a professional in that field...

It may be worth having an attorney or someone in a local tenant's rights organization review it.

The tenant's rights organization can also advise you of issues that they are aware of, with the landlord.
You can get a $10 rental agreement from staples and compare it to this one to see where the attorney deviated from the norm.

your state probably has a consumer protection website which details landlord/tenant relationships and what's legal and not. Illegal parts of the contract will be unenforceable.

I would not sweat the $100 repairs, that is just wierd. To have a professional anything walk through your door would be more than $100. Normally you're allowed "normal wear and tear".
After having my own dilemma with buying a house, I would echo the sentiment "pay for a real estate lawyer to read your rental agreement" All four of you should split the real estate lawyer costs four ways. I believe you can find a lawyer to charge a flat fee to look at the contract and make suggestions to protect your interests. Heck, some lawyers give free consultations. I've been searching for legal advice, one of the places I would recommend is a law school or some type of legal aid program run by your government. Don't be penny wise, pound foolish like I am. I warned you against walmart batteries, nissan cars, and your rental agreement. If the trend continues, you'll ignore my advice, proceed on the rental without legal advise.
Geez! Rent is that high in the land of CA? Dang!

Living in MS does have some advantages. That kind of rent would buy you a new 4 bedroom home and then some.

But like posted above....get a good lawyer to go over that lease agreement.
Originally Posted By: The Critic
The $100 repair clause is sort of ridiculous, but I can live with it considering that I will only be there for a year and the place is new.

I think that's pretty common when you're renting a house. If you don't want that type of clause, you'll need to go rent an apartment in a complex which usually has a full-time maintenance guy to take care of problems. But then you'll get less apartment for more money.

I think it's designed to eliminate problems like "Ooops, I flushed a whole bunch of toilet paper down the toilet and now it's clogged so I need to call the landlord and get a plumber out here to fix it" or "Ooops, the hall light burned out and now I need to call the landlord to get an electrician out to replace it" or "Ooops, the smoke detector is beeping and I'm not sure what to do so I'll call the landlord out to get an electrician to take a look at it because I don't know how to replace a battery" or "Ooops, my phone isn't working and the telephone company says it's an inside wiring problem so I need to call the landlord to send an electrician out to hang the phone that I left off the hook up"...and so forth.

If there weren't this clause there would be tenants calling for all sorts of minor problems they could solve themselves if they have two neurons to rub together.
If the appliances are new, they should have come with a one year warranty minimum. The lessor should provide you with receipts so that you can arrange for warranty service at any time. This should limit any issues in the appliance area.

Lessor needs to clarify that he will pay all repairs over $100, even though he does not choose the repairman. Otherwise, the lease should have a listing of approved repairmen provided as an enclosure to the lease. I can foresee a situation where he says he could have gotten a job done for less than $100, and refuses to pay. Off to court you go.....

As a former landlord, I would not want to give renters a blank check on repairs over $100 without having chosen the repairmen myself. I can see the situation of getting stuck with the most expensive plumber in town, and be forced to pay. Confirm the lessors intentions now, not when the "bad thing" happens.
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I own several rental properties, if you guys want, I will post my contract up here to compare.

I don't like the $100 dollar repair clause.

I would not want a tenant making a $100 repair to my house, who knows what they are doing, this could cause a problem down the road.

Does he really want his tenant fixing water pipes? Replacing electrical outlets? Light fixtures?

I have a $10 repair clause in my contract. This is to prevent tenants from asking me to buy them light bulbs, or very small items like this. Anything more than $10 I WANT to fix it.

Also I don't like how they put you on the hook for burning the house down. That is what the owners property insurance is for, his property.

As a long time renter, I will say that 100% of landlords are somewhat shady, and will spend as little money as they can. If something is broken, you may have to complain more than once to get anything done. That's just the nature of rentals.

The good thing about renting is that if something massive goes wrong, it's not your problem. Also, you never have to worry about mowing the lawn, etc.
Originally Posted By: AcuraTech

The good thing about renting is that if something massive goes wrong, it's not your problem. Also, you never have to worry about mowing the lawn, etc.

apparently he'll be on the hook if the place burnt down cos his girlfriend left a candle going...
Originally Posted By: AcuraTech
Also, you never have to worry about mowing the lawn, etc.

If you're renting a house, expect that you'll be responsible for mowing the lawn, shoveling the driveway, etc.