Residential Lease Agreement
Let’s say that you own a rental property in Colorado. You want to make sure that your lease agreement protects you to the fullest extent possible. What provisions does an owner need in their lease to ensure that they’re safeguarded when renting their property?
This article will discuss a variety of terms that are included in our firm’s standard residential lease agreement. Our lease template protects property owners by holding tenants to their contractual obligations. A version of the lease is also available that’s specifically designed for use by licensed property managers.
Any standard lease agreement should include terms such as: parties to the agreement, rent payment details, and an explanation of what happens if the tenant defaults. Some other key provisions that should be included are:
Lease term – When can the tenants move into the property and when do they need to move out? What are the consequences if the tenant doesn’t vacate when the lease term ends? Definitive start and end dates, rather than end-of-term notice requirements or automatic month-to-month options, give owners flexibility in an ever-changing rental market to modify provisions at the end of the initial term.
Security deposit amount and terms – How much security deposit is required to ensure the tenant performs their obligations? What charges can be deducted from the security deposit? How long does the owner have to return the security deposit following expiration of the term?
Allocation of utility and maintenance payment obligations – Are certain utilities included with the regular rent amount, perhaps through the owner’s HOA? What utilities is the tenant responsible for arranging and paying directly?
Care, maintenance, and damage provisions – Who is responsible for shoveling snow off sidewalks and mowing the lawn? If it’s the tenant responsibility, what are the landlord’s expectations and what happens if those expectations aren’t met?
Use and occupancy terms – How many tenants are permitted to live in the property? What are guest visitation terms?
Subleasing – Are tenants allowed to informally sublet on websites like Airbnb, VRBO, HomeAway, and Tripping.com? What are the expectations if a tenant needs to move out and sublet the premises for the remainder of the term?
Rules and regulations, including marijuana-related restrictions – What are the owner’s “house rules”? Applicable HOA regulations should be provided so tenants are on notice of their compliance obligations. Although possessing, smoking, and growing marijuana are permitted under Colorado state law, does the owner wish to restrict those activities which still violate federal law?
Pet terms, including additional deposit or rent amount – Are tenants permitted to keep pets in the property? If so, under what rules? Does the tenant need to pay an additional pet security deposit or monthly rent amount?
Parking and storage – Are certain parking and storage areas specifically designated for tenant use? Are some areas off limits and not to be used?
Tenant indemnification responsibilities – The tenant should be required to hold the owner harmless from any lawsuits if someone is injured on the property, as well as fines if the property is found to not comply with municipal or HOA regulations. Relatedly, the owner should consider whether to require that the tenant carry renter’s insurance with some minimum liability coverage in case the tenant must indemnify the owner.
Effect of tenant holdover – On a frequent-enough basis, tenants stay past their initial term, landlords continue to accept rent payments, no formal lease extension is signed, and all is well. Until it’s not. If that happens, what’s the effect?
Owner sale – What if the owner decides they want to sell the property while the lease agreement is in effect? Is there a contractual “out” that allows the owner to terminate the lease in order to market and sell the property tenant-free?
Strong protection for Colorado rental property owners starts with an effective lease agreement. Our firm’s residential lease agreement addresses all of the items discussed above, along with many others. If tenants need to be held to their contractual obligations, Colorado courts have time and again interpreted our lease to be pro-landlord in defending owners.