Tips for Effective Lease Agreement Drafting: How to Prevent Mistakes

If you need a passive income stream, one of your sure bets is investing in a rental property. All you need to do is find quality tenants and maximize occupancy to guarantee a regular paycheck. However, dealing with tenants can be a bit of a challenge due to the many legal obligations involved. That’s where a lease agreement comes in.

A rental lease agreement is a legally binding document. It spells out the rights, privileges, and responsibilities of both the landlord and the tenants. The lease cannot take effect legally until all involved parties sign the lease agreement. In a nutshell, the agreement specifies who is responsible for which repairs, the rent amount, the process of making payments, deadlines & timelines, etc. Spelling out these specifics helps you avoid future lawsuits. 

Mistakes to Avoid When Drafting A Lease Agreement

The format for drafting lease agreements may vary from one state or country to another. However, wherever you are from, avoid these common mistakes that most new landlords make: 

  • Not following the law

As a legal principle, not knowing that a housing law exists cannot be a valid excuse for violating that law. When drafting your lease agreement, therefore, you must comply with all the housing and property management laws of your state or country. For example, you have to also familiarise yourself with the legal requirements surrounding timely rent payments and possible evictions. Failure to do this can make you draft eviction laws that contravene tenants’ rights as enshrined in local property management bylaws.  

To avoid making costly legal mistakes, the best thing to do is to consult a legal professional. A local attorney can advise you on the rights of all parties involved, and the laws you must comply with. While you’re at it, hire the services of New York building managers to help you comply with all your legal obligations. Professional building managers are well-versed in both local and federal housing and rental laws. They also have the expertise and experience to manage the rental process from start to finish– including drafting lease agreements.

  • Not spelling out specific tenant responsibilities

Spelling out tenant responsibilities when drafting a lease agreement eliminates costly misinterpretations and confusion. Many landlords before you have made the mistake of assuming that tenants are responsible adults, only to be frustrated by the tenants’ reluctance or refusal to use common sense. Don’t assume anything- put it in writing! Do you want to put tenants in charge of the general sanitation of the property? State that clearly in the agreement. Do you want the tenants to be cleaning their HVAC filter? Go ahead and include that in the agreement, and even state how often you want the filters cleaned. Who will be in charge of outdoor landscaping? Put that in the rental agreement. 

Bottom line: Don’t leave anything to chance when drafting your lease agreement. Don’t expect any role to be performed at all if you haven’t put someone in charge of it. 

  • Not including specific dates

When does a lease start and end? When can they move in? When should a tenant apply for lease renewal? When can you serve the tenant with an eviction notice? In case the tenant wants to move out, when should they serve you with a notice? 

Bottom line: You need to specify dates and timelines to avert future conflicts.

  • Ignoring additional occupants

A tenant may decide to bring relatives and friends to live on the property. That can accelerate your building’s wear and tear, on top of making your property management job a tad harder. That’s why you should have a clause in your lease agreement detailing whether or not additional occupants are allowed.  If they’re allowed, you need to define their rights and responsibilities in the agreement.

  • Disregarding the importance of a co-signor

What happens if your tenant is unable or unwilling to honor their rent obligation? Do you count your losses and move on? If that’s not in your plans, have the tenant bring a co-signor to sign your lease. While you’re at it, remember to include a co-signor clause detailing the rights and responsibilities of the consignor. Note that a co-signor should be a reputable person who also qualifies (upon screening) as a potential tenant on your property

  • Omitting eviction guidelines

What could lead to evection? Write down the specifics. For example, you can evict a tenant for not paying rent for X or Y consecutive months or being involved in illegality. You also need to specify the eviction protocol.

  • Ignoring renters’ insurance

Renters’ insurance complements homeowners’ insurance in case of damages either to the property or the tenant’s personal items. For your own good, you should have a clause in the rental lease agreement requiring every tenant to have it

Final word


We have highlighted some common errors of commission and omission that landlords commit when drafting tenancy agreements. We can’t exhaust all of them because they’re too many. The general idea is to draft a comprehensive legal document, complete with specific rights, privileges, expectations, and obligations.