Create a Lease Agreement: 9 Must-Have Clauses for Landlords in 2025
A strong lease agreement is the backbone of every successful rental business. Without it, landlords risk late payments, tenant disputes, and costly legal battles. In 2025, with new tenant protections and digital rental platforms on the rise, it’s more important than ever to create a lease agreement that’s legally sound and comprehensive. Here are nine must-have clauses every landlord should include to safeguard their property, income, and tenants.
1) Rent Amount and Due Date
This seems obvious, but it’s the most critical part of the lease. State the monthly rent clearly, the exact due date, and acceptable payment methods. If you allow electronic payments, name the platform (such as Avail, Apartments.com, or Zelle). Clarity prevents excuses later.
Pro Tip: Add a clause requiring tenants to set up recurring payments through your chosen system. Automated rent means fewer missed payments.
2) Security Deposit Terms
Spell out the security deposit amount, where it’s held (in states that require escrow accounts), and the conditions for return. Specify timelines for returning deposits after move-out and detail deductions for damages beyond normal wear and tear. Laws vary by state, so ensure compliance with local regulations.
3) Late Fees and Grace Periods
Protect your cash flow by outlining penalties for late payments. Many states cap late fees (often 5% of monthly rent), so check your local law. Clearly state if there’s a grace period — typically three to five days. This clause discourages chronic late payers and gives you leverage if rent consistently comes in late.
4) Maintenance and Repair Responsibilities
Define what the landlord handles (structural issues, major systems) and what tenants are responsible for (changing light bulbs, minor upkeep, lawn care). Clear expectations reduce disputes when something breaks. Some landlords also require tenants to carry renter’s insurance to cover personal belongings and liability.
5) Rules on Pets and Smoking
Pet policies can make or break tenant relationships. Decide whether pets are allowed, any breed or size restrictions, and if additional deposits or pet rent apply. If you prohibit smoking, state it explicitly and include consequences for violations. In multifamily properties, smoking bans can prevent complaints and damage.
6) Renewal and Termination Terms
Explain how lease renewals work — whether they automatically roll to month-to-month or require a new contract. Also, outline notice requirements for termination by either party (commonly 30–60 days). This protects you from sudden vacancies and gives tenants clear expectations.
7) Right of Entry
Landlords need access for repairs, inspections, and emergencies, but tenants also have privacy rights. Include a clause stating when and how you may enter the property. Most states require 24–48 hours’ notice for non-emergency entry. Having this clause prevents disputes and ensures compliance with tenant rights laws.
8) Subletting and Assignment Rules
Decide whether tenants can sublet or assign their lease. In 2025, subletting via platforms like Airbnb or mid-term rentals is more common than ever. Without a clear clause, tenants may sublet without permission, exposing you to risks. If you allow it, require written approval and ensure new occupants meet your screening standards.
9) Default and Eviction Procedures
No one wants to evict, but it’s crucial to define what constitutes a breach of lease and the steps you’ll take. State what happens after missed rent, property damage, or repeated violations. Outline notice requirements and reference your state’s eviction process. This clause provides legal protection if you must enforce your rights.
Example: The Power of a Solid Lease
Consider two landlords with identical properties. One used a generic lease template, while the other customized their lease with detailed clauses. When both had tenants who stopped paying rent, the landlord with a strong lease quickly obtained a judgment and regained possession. The other faced months of legal delays. The difference came down to clear terms and enforceable clauses.
Pro Tips for Drafting Strong Lease Agreements
- Use state-specific templates: A generic lease may not comply with local laws.
- Update annually: Laws and best practices change. Review your lease each year.
- Go digital: Platforms like DocuSign streamline signing and storage.
- Be consistent: Apply the same lease terms to all tenants to avoid discrimination claims.
FAQs About Lease Agreements
Q: Can I write my own lease?
A: Yes, but it’s best to use a state-approved template and have an attorney review it. Mistakes can be costly if disputes arise.
Q: How long should a lease last?
A: Most leases run 12 months, but month-to-month and longer terms are also common. Choose based on your market and goals.
Q: Do I need to notarize a lease?
A: In most states, notarization isn’t required. Digital signatures are legally valid in 2025.
Q: Can I ban all pets?
A: Yes, but remember that service animals and emotional support animals must be accommodated under federal law.
Q: How specific should I be about repairs?
A: Very specific. Courts favor tenants if lease language is vague. Spell out exactly what’s your responsibility vs. theirs.
Bottom Line
In 2025, creating a strong lease isn’t just about collecting rent — it’s about protecting your property, income, and peace of mind. By including these nine must-have clauses, landlords can reduce disputes, stay compliant, and maintain professional tenant relationships. A detailed lease is your first line of defense in building a profitable and sustainable rental business.
Next step: Explore more landlord strategies on our Resources page. Related reads: Landlord Insurance Explained, Self-Manage Your Rental Property, and Protect Your Real Estate Investments.