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Read further to learn more about residential lease agreements in Delaware, such as what disclosures are required and what else should be included.
What is a Residential Lease Agreement?
A Residential Lease Agreement, sometimes referred to as a rental agreement, is a binding contract between two individuals: the landlord and the tenant. The Delaware Residential Landlord/Tenant Code (The Code) governs rental property, and defines the landlord as the “owner, lessor, or sublessor” of the rental property. Under The Code, the term landlord may also apply to anyone who manages your property or otherwise acts on your behalf. The tenant is someone who is authorized by the lease to occupy the property “to the exclusion of (all) others.”
Writing a Residential Lease Agreement in Delaware
The state of Delaware places a great deal of emphasis on tenants’ rights. Accordingly, you should draft your lease very carefully, ensuring it contains the following details. When executing a written lease, you must also provide your tenants with a paper copy at no charge.
Property Address and Owner Information
Spell out the street address of the property and unit number, if applicable. Provide a general description of the rental, including which places the tenant has sole access to and which locations are common areas.
According to Section 5105, you must also disclose the name and business address of anyone who:
- Is an owner of the property
- Acts as an appointed resident agent
- Directly or indirectly receives rent
- Normally deals with tenants on your behalf (such as a property management firm)
Lease Term and Limits of Occupancy
Provide a start and end date for your lease. Note that in Section 5106, it specifies that no rental agreement may be for a term greater than one year unless it is in writing. This means you may “round up” a 12-month lease. For example, if a tenant moves in on the 15th of the month, you may have your lease be for a period of 12 months and 15 days.
Although longer terms are allowed, Delaware law highly favors leases of 12 months or less. Keep this in mind when determining how long your lease should be.
Your lease may not begin until the property is ready to be occupied. The Code states that unless tenants are able to take full possession at the commencement of a lease, they will not be responsible for rent payment and may therefore provide you with a written notice to terminate.
Extended Absences from the Property
You may require your tenant to notify you in writing of any anticipated extended absences. Even so, The Code expressly states that in any conflict between state and federal law, federal law will prevail. As a result, you may not be able to enforce this clause when renting to members of the military. Section 5316 of The Code makes exceptions for those who are victims of stalking, sex offenses, or domestic abuse as well.
Tenants who remain after the lease period ends are referred to as holdovers. At that time, Section 5515 authorizes you to charge up to twice the amount of rent, which can be computed on a daily basis. If this is something you plan on doing, you should let your tenants know this. Add a few sentences to that effect, and give specific figures as to how much extra rent you will charge.
Subletting and Assignment
Section 5508 of the Landlord/Tenant Code authorizes Delaware tenants to sublet or assign property to others unless doing so is expressly forbidden in a lease. As such, it is imperative you add a clause stating that tenants are not to sublet or assign property without your express permission. Leave a blank for your tenants to sign acknowledging that they have read and understood this.
List the amount of rent as well as the due date. Specify what if any late charges will apply if rent is not paid on or before this date. Be clear as to how late charges will accrue and when they will start. You should also provide instructions for paying rent. If rent will be paid online, provide a web address; otherwise, list the address or location where rent payments may be mailed or dropped off.
You may prefer certain methods of payment, in which case you should list them. For example, if you do not wish to take checks, you should be sure that your tenants know this. Likewise, if you require an additional processing fee for the use of a credit or debit card, you should make your tenants aware of this.
What utilities apply to the rental dwelling? Will you provide them or will you require your tenants to take out utilities in their own name? Be sure your tenant knows the names and contact information of any utilities he or she will be responsible for. Include a line stating that you are not responsible for returning any security deposit or hookup fees associated with a tenant’s utilities.
Damage to your property may occur if certain utilities are not left on. For example, you may encounter burst pipes if there is no heat inside the home. Accordingly, you should include a line stating that tenants will be responsible for any damages that happen as a result of having utilities disconnected. State that you will recover the necessary funds from their damage deposit if needed.
Trash Disposal and Removal
Inform your tenants as to the requirements for trash removal. Will trash removal be provided by your city or will tenants use a community dumpster? Ensure they know the location for any drop-off points and the dates and times for any pickups. Some cities may have mandatory recycling programs as well. If your property is in one of these cities, ensure you provide details in this section.
Mention that hazardous waste must be disposed of in accordance with local, state, and federal laws, and that tenants will refrain from storing or disposing of hazardous materials whenever possible.
As the landlord, you are responsible for maintaining insurance on your property. However, insurance policies for rental units rarely if ever cover the contents. This is why you should advise your tenants to take out a policy of their own. Ensure your tenants know that you will not be held responsible for any loss or damage to their property by including a few lines to that effect and having them initial.
Most Delaware landlords pay their own property taxes. Should you expect your tenants to do so, you will need to include this requirement in writing. Write a few lines that talk about your tenants’ responsibility to pay property taxes, as well as the amount of each and the due date.
Security Deposit and Fees
List the amount of your security deposit. Note that in Section 5514, it prohibits you from charging more than one month’s rent unless you provide a furnished unit. You must also place security deposit funds into a special “security deposit account”, and may not use them for operating your rental.
Within 20 days, you must also disclose the location of the bank in writing; otherwise, you will be forced to surrender the deposit to your tenant. This provision applies to any pet deposits as well. As such, it is a good idea to include the name and address of your bank within the lease agreement. Have your tenant initial this block, and then mail a written memorandum within the allotted timeframe. Leave a space that is “for office use only” where you can later note the date on which you mailed this memorandum.
Pet Rules, Requirements, and Fees
Discuss whether or not you will allow pets in this section. Talk about what types of pets you will permit, to include any restrictions on breeds. Will there be any limitations on size or the number of animals? If so, you should list these as well.
List every animal that will be permitted to reside in the home. Include the name, type, breed, sex, and any identifying characteristics. Let your tenants know that no other animals will be permitted during the lease period without written permission from you first. Include a sentence or two stating that tenants are responsible for their pet’s behavior at all times, and should keep them on a leash when walking them outdoors.
Pet Security Deposit
You may require an additional security deposit to cover pets. When doing so, you are bound to safeguard this security deposit just as you do your regular one. You must also deduct pet damage from this deposit first before reaching into the tenant’s regular security deposit.
In Delaware, it is unlawful to charge a security deposit for a service animal. As such, you should leave a line for your tenants to write in information about any service animals they might have. Leave enough room for them to list the name, age, species, breed, and any identifying marks.
Maintenance, Alterations, and Repairs
Delaware landlords are responsible for maintaining their rentals in a manner that is in keeping with local building codes. You are also required to maintain and clean certain common areas. However, you may require tenants to mow grass, shovel snow or perform similar other tasks. If so, you should spell out what those required tasks are in your lease.
Section 5509 permits tenants to install new locks at their own expense, provided they notify you in writing and give you a key. The lock must also fit into the existing system and be installed in a manner that does not cause damage to the door or surrounding areas. Since tenants frequently wish to change locks, you should include a few sentences stating what the requirements for doing so are.
Repair and Deduct
Section 5305 obligates the landlord to maintain the dwelling in a manner that does not interfere with the safety, health, or welfare of tenants. Specifically, it requires you to maintain plumbing, electrical, and “other facilities” in good condition. You must also “supply or cause to be supplied water, hot water, heat and electricity”, and maintain clean and sanitary common areas.
Should you fail to maintain the residence, the tenant has the right to perform repairs and deduct the amount from the rent. To do so, your tenant must notify you in writing and give the appropriate amount of time (30 days) for you to take action. The amount deducted may not exceed $200 or one-half of monthly rent, whichever is less.
Include a section letting tenants know what their rights are concerning repair and deduct. Include the steps that are to be taken as well as the monetary limits on repairs.
Access to Property/Notice of Entry
Tenants are required to provide you with “reasonable access” to the property during normal business hours. Specifically, The Code states that you must enter a dwelling only between the hours of 8:00 am and 9:00 pm. You must also provide at least 48 hours’ notice before entering the property to make repairs, perform inspections, or conduct other business. This timeframe does not apply to repairs requested by the tenant or emergencies.
Write a few lines that talk about the tenant’s right to peaceful enjoyment of the property, and note exceptions for repairs, maintenance, inspections, etc. Let the tenants know how you will provide advance notice of entry such as telephone, email, etc.
Grounds for Eviction
As a landlord, you may evict tenants who fail to pay rent or otherwise violate certain provisions of the lease. You do this by providing one of the following:
- Five-day notice to pay rent. The tenant must pay rent within this timeframe or vacate the property.
- Seven day notice to remedy. This allows the tenant to correct bad behavior within seven days.
- Seven-day unconditional quit notice. This notice allows you to take possession without giving the tenant an opportunity to correct bad behavior. Use this notice whenever there has been a serious breach of the lease that also violates one or more laws.
Advise your tenants that you will exercise your right to provide one or more of these notices. Let them know that in cases where there is imminent danger to another person that you are not required to provide any notice at all.
Lease Termination and Notice
Both parties must provide at least a 60-day written notice before terminating a lease. Let your tenants know that if they fail to do so, the lease will revert to a month-to-month lease instead. Explain that if the tenant fails to vacate after you have provided a 60-day notice, he or she will be in holdover status as stated above.
Landlords often want to renew their leases, but choose to add different terms for the new lease period. If that is the case, then you must state the new terms in an official written notice that you provide to your tenants at least 60 days before the lease ends. Let your tenants know you may possibly decide to alter the lease in this manner when the expiration date nears.
Prohibited Lease Provisions
The Delaware Landlord/Tenant Code forbids you to include certain provisions in your lease. Now that you have drafted it, go back over it a second time to see if it contains provisions related to:
- The recovery of attorney’s fees by either the landlord or the tenant.
- Confession of judgement, which involves either party allowing the other to enter a judgement against them.
- Waivers or limitations on your liability or indemnification for liability.
- Waivers related to any of the tenant’s rights as spelled out in the Code.
If your lease does contain these provisions, delete them. Prohibited provisions are unenforceable, and may result in the tenant bringing legal action to recover up to three months’ rent.
Lead-Based Paint Disclosure
For dwellings that were built before 1978, the Environmental Protection Agency (EPA) requires you to provide a Lead Based Paint Disclosure Form. You’ll find that form located on the EPA’s website. Use the official form provided by this agency, and do not alter it in any way. Ensure the appropriate blocks are initialed and signed off on before giving each of your tenants a copy.
An asbestos addendum is not required by the EPA. Even so, you may wish to provide one if your structure was built before 1981. The purpose of an asbestos addendum is to make people aware of the possibility it exists. You should also let your tenants know that asbestos is not harmful unless disturbed, so they should avoid demolishing walls, ceilings, or floors. Sign and/or initial all blocks and provide one copy to each person who is signing the lease.
Landlord/Tenant Code Summary
The Delaware Department of Justice mandates that all landlords provide their tenants with a ten-page summary of the Landlord/Tenant Code upon signing a new lease. This summary is available online, and should be given to the tenant in written format. Include a block on your lease where your tenant can initial stating that he or she has received a copy. For added protection, you may want to attach the summary to the back of your copy of the lease and stick it away in your files.