Lease Provisions: What’s Legal and What’s Not

Continuing our series on lease agreements, here’s a look at the legality—or illegality—of some common lease provisions:

In addition to the standard content required in a lease agreement, landlords can elect to include additional provisions that protect their property and clarify the terms of the lease. Provisions can be as specific as “only red cars can park in the garage on Sundays,” but you don’t see terms like that often—in part because they’re weird, and in part because they would be difficult to enforce.

More common provisions include clauses that prohibit smoking and pets, and clauses that further clarify protocol around the agreement and terms of the lease—for example, specifying how certain kinds of notices have to be delivered.

What’s legal, what’s not, and what should you take a moment to consider as you’re drafting or signing a lease? Here are the most important things to pay attention to:

mallet

Your lease can’t contradict the rights and responsibilities assigned in Michigan’s Truth in Renting Act.

Michigan state law is pretty clear about the landlord’s responsibility to maintain a certain standard of habitability on their property, and both parties’ responsibilities to mitigate damages. There are also specific rules around security deposits and fees, as well as legal proceedings and their associated costs. Any provision that violates or contradicts these laws and regulations is illegal and void.

Michigan state law also considers tenants to be consumers, so the Consumer Protection Act applies. This mostly regulates things like deceptive advertising and fake rebates.

people

Think about who’s going to live at the property. You’ve vetted your tenants, but have you thought much about subleasing, AirBnbing, or guests? Landlords can restrict who’s allowed to live on their property: outlawing subleasing, allowing only the initial group of tenants on the written lease, or even specifying how long individuals can stay as guests.

You can charge a fee for subleasing, or require sublessees to submit an application and undergo your normal screening process and subsequent approval. Tenants can sublease by default, so if subleasing isn’t mentioned in the lease, it’s allowed.

Castle’s standard lease prohibits subleasing without prior written approval.

Civil rights laws stand, so you can’t discriminate against tenants based on race, color, religion or creed, nationality or ancestry, sex, physical or mental disability, veteran status, citizenship, or age (people under 18 exempted, since they’re too young to legally enter into contracts). So that “no girls allowed” clause isn’t going to fly, even if you’re trying to preserve your man cave.

Amazingly, in Michigan, it’s still legal to discriminate against tenants based on their sexual orientation. Luckily, many cities have their own ordinances banning this. (Wikipedia has the full list.)

mallet

Just-in-case clauses:

It’s important to add a provision for severability: a clause stating that if one aspect of the lease is found to be illegal, the rest of the agreement still holds. That way, on the off chance a part of your lease is ruled against, the rest remains valid.

You should also know that under to Michigan State Law, either party can terminate the agreement if the other doesn’t fulfill his or her duties, as long as they give proper notice. Landlords, go one step further and actually list out situations that would lead you to terminate the lease. Then if such issues arise, the lease agreement will back you up.

 

Think about what you want your property to be like at the end of your lease. What can you do to make sure your tenant is protecting your interests in the property, and how will your provisions be enforced? Remember, there are a lot of rules around what and when you can charge your tenant. Tune in next week for the full story on deposits and fees.

Get Updates By Email

Like this post? Enter your email address below to stay in the loop with our latest contact. We promise we won’t spam you.

What’s different about Castle? Everything.

With flat-fee pricing, unbeatable technology, and top-rated customer service, Castle is property management like you’ve never seen it before.

Learn more →