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What is a Residential Lease Agreement?
A residential lease is a legally binding agreement between a landlord and a tenant who intends to rent a specific property. It is an all-inclusive document created to outline the expectations of both parties and address any special circumstances that may arise during the length of the agreement. It also clearly states the potential consequences for not adhering to the stated terms. For maximum legal credibility, it is critical that this document be produced in writing, reviewed and signed by both parties prior to occupancy.
Under Texas law, a tenant is anyone authorized by a lease to occupy a dwelling and who is also obligated to pay rent. The exact provisions are spelled out in Title 8, Chapter 93 of the Texas Property Code, and a breakdown follows.
Writing a Residential Lease Agreement in Texas
The sections that follow are necessary elements to a residential lease. Each section includes information that pertains specifically to lease agreements in Texas. All rental properties are unique and it is important for the landlord to tailor their residential lease to the unit or property being rented. This guide lists various circumstances for landlords to consider as they are drafting a residential lease agreement. Landlords need to include the components listed here to be legally compliant in the state of Texas.
Term and Limits of Occupancy
The lease will begin by listing the address of the property, along with a start and end date for possession. It should spell out the names of any adults who will inhabit the property, and specify that no other individuals are allowed to occupy it.
Include a provision against subletting or renting any portions of the premises without prior written permission. This should include getting new roommates or using any portion of the dwelling as a vacation rental or “Airbnb” property.
If you will allow overnight guests, specify under what conditions and for how long. For example, you may allow visitors for no more than two weeks at a time unless that individual agrees to be added to the lease.
Discuss what will happen when the lease has expired and the tenant still continues to occupy the property. Will you defer to a “month-to-month” lease, or require your tenant(s) to sign a new one within a particular timeframe? Let your tenant(s) know that if they become holdovers, you may exercise your right to evict by providing them with a 3-day notice to vacate the property.
According to Section 92.017(g) “tenant(s) may have special statutory rights to terminate the lease early in certain situations involving family violence or a military deployment or transfer.” You may wish to specify these rights in your lease, particularly if you are near a military base and routinely rent to service members. Bear in mind that the statutory rights spelled out in Section 91.017 cannot be waived by tenant(s).
Disclosure of Ownership and Management
Section 92.201 requires landlords to disclose ownership of a dwelling by providing the name and address of the title holder as specified in the county clerk’s office. This address can be a post office box rather than a street address.
If someone else manages your property, you must provide your tenant(s) with the name and address of the management company as well. This information does need to be provided in writing. Including it in the lease would satisfy this requirement, as would providing a written letter or posting the information in a conspicuous location.
Rent Payments
This section should spell out how much rent is required and how often it is due. Describe the penalties for late rent payment, including any applicable fees. Note how much you will charge for each day of late payment, as well as the penalties for an overdrawn account or bounced check.
You may wish to pro-rate rent for any partial months the tenant(s) occupy your property. If so, state the amount of rent payment that is required for each day. This should be the amount of monthly rent divided by 30, the average number of days in each month.
Rent normally remains the same throughout a lease period. However, if you do plan on raising the rent before your lease expires, you should include an escalation clause. An escalation clause will spell out how much the rent will increase and at what frequencies. It can be a good idea to have tenant(s) initial this particular clause in the lease as proof they have read it and understand.
Let tenant(s) know that you may exercise your right to raise the rent whenever the lease expires. Advise them that you will do this by providing notice in writing no later than 30 days before the end of the lease agreement.
Provide tenant(s) with information on how they are to pay their rent, such as online, at a property manager’s office, or through mail. Discuss whether late fees will be assessed whenever the due date falls on a weekend or holiday.
Utilities
You should also discuss what utilities you will be responsible for and which ones you will expect your tenant to pay. For example, if you offer a dwelling that has utilities included, you may pay only for water, sewage, gas, and electric, and require the tenant(s) to pay for cable, internet, or telephone service.
When it comes to cable service, you may have certain guidelines concerning the size or location of a satellite dish. If so, these need to be specified in your lease agreement.
If there are repercussions for having utilities disconnected, you will want to state this fact. For example, you may want to ensure there is adequate heat, and arrange for the electric or gas company to automatically transfer the account into your name if the tenant defaults. In that instance, you would need to collect the amount of the utility directly from the tenant. State that you will provide the tenant with notice and give a date when you will collect the utility payment.
Insurance
State that you are responsible for providing adequate insurance on the structure and grounds. Let your tenant(s) know that you are not responsible for damage to their household goods, even if that damage results from a structural defect such as a leaking roof. Advise your tenant(s) to seek out their own renter’s insurance policy, or require proof of such a policy if you would like to also make that a condition of the lease.
Although you are responsible for insurance, you may nonetheless wish to include an indemnification clause. An indemnification clause will release you from liability in the event a tenant or guest is injured while on your property. Such a clause should contain language to the effect of holding the landlord harmless from any and all claims related to personal injury.
Do not list your insurance company’s information within the lease itself. Doing so will only open you up to the possibility of tenant(s) attempting to file a claim on their own. If your tenant(s) desire proof of insurance, you can always provide them with a certified letter from your agent.
Security Deposit and Fees
Your lease should contain a section that spells out your security deposit and other fees. Section 93.004 of Title 8 describes a security deposit as being “any advance of money, other than a rental application deposit or an advance payment of rent, that is intended primarily to secure performance under a lease of commercial rental property.”
Your lease should list the security deposit amount, along with the application fee. According to Section 92.103, you are required to return the security deposit within 30 days after the tenant vacates.
You may deduct a portion of the security deposit to cover damage, rent charges, or fees related to a breach of the lease. Be sure your lease contains a clause detailing this information so that your renters are not caught off guard. According to Section 92.104, you may not use a security deposit to account for normal wear and tear on the premises. Normal wear and tear is defined as anything other than “negligence, carelessness, accident, or abuse of the premises.” A clause containing similar language would prove very useful.
If part of the security deposit is kept, you must provide your tenant with an itemized list of all deductions taken. You are not required to give an itemized list if the deposit is being retained in lieu of rent. It can be helpful for your tenant to understand this, so you may want to include a sentence or two about that.
You may require tenant(s) to provide you with advanced notice of surrender in order to receive their security deposit back. If this is the case, you must include language stating such in your lease agreement. This clause should either be underlined or placed in boldfaced font; otherwise, this is not enforceable.
Repair and Deduct
As the landlord, you will be responsible for maintaining the dwelling in reasonable condition. According to Section 92. 0561, tenant(s) may be authorized to “repair and deduct” certain items, provided you had a duty to provide a remedy for them under Section 92.052. Repair limits may not exceed $500 or the cost of one month’s rent, whichever is greater.
To repair and deduct, your tenant(s) must have provided written notice according to Section 92.052. That notice should contain a statement claiming that the tenant intends to exercise the right to repair and deduct.
You must provide language informing your tenant(s) of their rights under Sections 92.056 and 92.0561. That information must be in boldfaced type or underlined. You may want to include a block for initials next to this paragraph as proof you have informed tenant(s) of their rights.
Maintenance, Alterations, and Repairs
Your tenant(s) should understand that altering or improving their dwelling is not authorized without prior written permission. Since you will be responsible for normal maintenance and repairs, tenant(s) should not perform them on their own. This includes painting, hanging wallpaper, and other similar decorative improvements.
Let your tenant(s) know that they may be responsible for restoring the property to its former condition or for the cost of doing so should they make unauthorized alterations or modifications to a dwelling. State that if necessary, the funds will be deducted from their security deposit.
You will need to discuss certain maintenance requirements such as grass cutting, snow removal, storm damage cleanup, and trash removal. Will you be responsible for these things, or will you expect your tenant(s) to handle them? If the burden lies with the tenant(s), be sure you also note that they will be doing so at their own expense, and that the cost of these maintenance issues are not reimbursable.
Trash and garbage removal should be listed separately from other maintenance items. In the maintenance clause, include information about trash pickup or the location of dumpster units. If tenant(s) must separate recyclable items, you should list those as well.
Ensure your tenant(s) know that they are not to dispose of hazardous items with their regular household garbage, but that they instead must surrender them to the appropriate recovery facility. You may also want to prohibit the storage or collection of hazardous materials, except for ordinary use.
Access to Property/Notice of Entry
The Texas Attorney General has stated that tenant(s) have a right to “peaceful enjoyment” of their dwellings. However, you may still need to access the property from time to time to make repairs or conduct other official business such as facilitating an appraisal or insurance inspection.
Whenever possible, you should provide advance notice to tenant(s) before accessing property. List how that notice will be provided (by phone, text, email, etc.), but also mention that there may be instances when giving advance warning will be impossible. State how you will notify tenant(s) when there is an emergency such as leaving a written notice on the door stating that you have been there.
During the last 30 days of the lease, you may wish to show the property to others. If so, this should be stated in the lease. Give the conditions under which property will be shown, and include a clause stating that the tenant will keep the premises reasonable clean and well maintained during the viewing period.
Grounds for Eviction
Your tenant(s) should be aware that certain things will be grounds for eviction. These include failing to pay rent in a timely manner or otherwise violating any provision of the lease. According to Section 92. 332 (b), you may also evict if the tenant(s) or their guest(s) damage property; your personal safety has been threatened; tenant(s) perform serious misconduct or a criminal act; or the quiet enjoyment of other tenant(s) or neighbors is seriously impeded.
Let the tenant(s) know that one of these violations will result in a Notice to Vacate. At that time, tenant(s) will have only 3 days to vacate the dwelling. If they do not comply, make sure your tenant(s) understand that you will then exercise your rights by filing eviction paperwork with your local Justice of the Peace.
An eviction notice can have long-lasting effects on a tenant. As such, you should include a clause stating that you will not be held responsible for future landlords refusing to rent because you exercised your right to file for eviction.
Pet Addendum
Will you allow pets on the premises? If so, what type of animals and how many? Keep in mind that some Texas cities such as Garland prohibit certain breeds of dog such as pitbull and American bulldog. If your city has such an ordinance, you should ensure those particular breeds are excluded.
If pets are permitted, you may wish to charge an additional security deposit and/or monthly rent. Be sure these fees are included in your lease agreement. You should also mention whether or not a pet security deposit is refundable, and if so under what conditions.
Have your tenant(s) sign a pet addendum at the beginning of the lease period, regardless of whether or not you allow animals. If animals are permitted, update it each time a new pet is adopted. Ensure the addendum contains the name, age, sex, and breed of all animals.
Parking Rules
If you have a multiunit complex and implement certain parking rules, you will need to have a parking addendum attached to your lease. A multiunit complex involves more than two dwellings within one or more buildings that have common ownership or management. Dwellings within a multiunit complex must also be located on the same or adjacent parcels of land.
The parking addendum should contain a full list of rules and policies, and must be provided to the tenant(s) prior to the commencement of the lease. They must be signed by the tenant(s) and attached to the lease agreement. Alternately, you may also include a parking addendum within the lease itself.
Regardless of whether they are in a separate addendum or listed within the lease itself, the rules themselves must be preceded with a heading that states “Parking Rules” or “Parking”. This heading should be in bold font, capitalized, or underlined.
Should you change the parking rules, you will need to provide adequate notice to your tenant(s) ahead of time, giving ample time for compliance. As such, your parking addendum should state the procedure for parking rule changes, and list how each tenant will be notified.
You may ask your tenant(s) to provide you with the make, model, year, and color of vehicle, in addition to its license plate number and registration state. Landlords are not authorized to require any other information.
Smoke Alarms
Section 92.258 requires landlords to test all smoke alarms at the beginning of a lease to see that they are in good working order. A Smoke Alarm Addendum should contain the date on which smoke detectors were tested and by what methods. Those methods should fall under the manufacturer’s guidelines.
Section 92.255 requires smoke alarms be installed in every bedroom of a dwelling, and on each level if a home contains multiple levels. If the dwelling contains a single room used for living, dining, and sleeping, the smoke detector should be contained within that room.
Section 92.254 requires you to install a device that is “tested and listed for use as a smoke alarm by Underwriters Laboratories, Inc., Factory Mutual Research Corporation, or United States Testing Company, Inc. In your addendum, state the type(s) of smoke detector(s) you have as well as where each one is located.
Tenant(s) are responsible for routinely replacing the batteries in a smoke alarm. They may also be held liable under Section 92.2611 for damages, civil penalties and attorney’s fees if they intentionally disable a smoke alarm or remove old batteries without immediately installing new ones. A clause informing tenant(s) that they may be held responsible should be placed in bold or underlined print in order to be enforceable.
Lead-based Paint Disclosure
You must provide a lead-based paint disclosure form if your dwelling was constructed prior to 1978. This form is provided by the Environmental Protection Agency (EPA), and cannot be altered. Ensure your tenant(s) initial the appropriate blocks and sign where indicated. Attach this form to your lease, and provide your tenant(s) with a copy.
Asbestos Addendum
If your structure was built prior to 1981, you might also wish to include an asbestos addendum. An asbestos addendum will alert tenant(s) as to the possibility of asbestos, and provide information about minimizing health effects.
For example, you may state that asbestos is harmful only when disturbed, so tenant(s) should not tear down walls or perform other modifications without your approval. You may also wish to prevent tenant(s) from drilling holes or nailing up objects so that any asbestos that might be there is not inadvertently disturbed.
Drug- and Crime-Free Lease Addendum
A drug- or crime-free lease addendum states that tenant(s) will only have use of the dwelling so long as they do not engage in drug or criminal activities. This can include conduct on the property as well as off of it. As part of this addendum, your tenant(s) should agree not to use the dwelling for criminal activities, or to manufacture, use, sell, or store any controlled substance set forth by the Texas Health and Safety Code.
Within this addendum, include a clause stating that criminal violations and/or drug use are considered to be a material and irreparable violation of your tenant(s) lease. State that such conduct will lead to the immediate termination of the lease, and that a criminal conviction is not required in order for you to exercise your rights.
Ensure your tenant(s) know that criminal conduct and/or drug use applies not only to them, but to their guests. Include a sentence or two about tenant(s) being responsible for their guest’s behavior at all times.