Four Residential Lease Terms You Shouldn’t Live Without

In Tennessee, residential leases are governed by statute, unless you have a contract (a lease agreement) that sets out the terms of your rental. I have seen some pretty short and shoddy lease agreements that do little but set out the term and rental price.

Here are four key provisions to make sure to include in lease agreements if you own rental property in Tennessee:

1. Waiver of Notice. Under Tennessee law, you have to give a renter notice of default (and an opportunity to cure) before you sue to evict them. You can get around this by including a “waiver of notice” provision in your lease agreement. Tennessee Code Annotated (T.C.A.) 66-28-201(c) provides that, “[r]ent shall be payable without demand at the time and place agreed upon by the parties. Notice is specifically waived upon the nonpayment of rent by the tenant only if such a waiver is provided for in a written rental agreement.” If you include a “waiver of notice” provision in your lease, then you do not have to jump through the hoops of giving your tenant written notice before taking them to court. If they are late on making payments, you can declare them in default and file suit.
2. Attorney’s Fees. Make sure that you include language providing for the recovery of attorney’s fees in the event you have to sue for unpaid rents or for eviction. Some tenants will make life very difficult for you if and when you try to evict them. If you have language providing for the recovery of your legal costs, then you can attempt to recover those on top of the outstanding rent amounts. Frequently, this language also acts as a deterrrent for tenants, who do not want to be on the hook for both their lease payments and your lawyer’s fees.
3. Holdover. Lease agreements often do not set forth what happens when you let your tenant stay after the end of the lease term. While Tennessee has some default rules about this, you can likely craft better circumstances for yourself if you put this in the lease. For example, your tenant may believe that if he stays in your apartment or rental property after the term expires, he can continue to do so on a month-to-month basis. If you put language in your rental agreement that provides for an increase in the monthly rent in the event of a “holdover tenancy” or even an automatic renewal in a year-to-year term, you can position better position yourself in the event of a tough renegotiation.
4. Right of Entry. Imagine a scenario where you are in a dispute with a defaulting tenant who has become unresponsive. You do not know if they are still in the property. All you know is that he has not paid you. Rather than having to go to Court, to get personal service on the person, and to get a judgment of possession, consider including a provision in your lease that provides for your entry on the premises with a certain period and form of notice. If you have that, and can get in and determine that the property has been abandoned, you may be able to legally retake possession without having to seek a judicial determination.

These are just four things you should consider putting in your residential lease agreements and, more importantly, a few reasons you should discuss them with a lawyer.

Click here to contact Darrell Phillips for more information about drafting or reviewing your contracts.