Sign Colorado Banking Lease Template Later

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- Hi, I'm Marc Cunningham with Grace Property Management. If you're a landlord, or you own rental real estate, you have a lease agreement in place, hopefully, with your tenant. So I want to share just a couple, five, lease agreement clauses you want to ensure you have in place. Whether you're self-managing, whether you hire a property manager or not, these are clauses that are important to ensure you protect yourself and define your relationship with your tenant. And the first one has to do with month-to-month lease terms. In Colorado you don't want a month-to-month lease term coming up for auto renewal in your lease. Colorado state law says that if a lease agreement expires and nothing happens, it just automatically rolls month to month, which is fine. Except in Colorado, it gets cold in the winter time and people don't like to move. So that means if they do leave your property, or you have a vacancy, it's gonna cost you more time and turnover. So you want to put a clause into your initial lease that says something like this. If we have not received a written notice of intent to vacate from you, and your lease term has expired, you will be on a month-to-month lease term. That's just Colorado state law. Your rent will increase by, and then you put in a pretty big, hefty percentage there, per month on a month-to-month lease term. Because again, ideally, as a landlord, you don't want the tenant going onto a month-to-month lease term with your lease. Now, if there are special circumstances, that's specific. But generally speaking, you want to avoid month-to-month leases. And a clause like this will do that by ensuring there's a hefty monthly increase in the rent should your tenant go month-to-month. Number two deals with pets. Now, assuming you have a no-pet policy in your lease, it may read something like this. No pets of any kind are allowed, even temporarily, anywhere on the premises, unless we've so authorized in writing. If we discover a pet on the property, you will pay us x dollars per day, and we like putting in the per day because it really encourages that tenant to get rid of the pet quickly if they did bring in an illegal pet, until the pet is removed plus an inspection fee of x number of dollars, why? 'Cause you're gonna have to get back in there as a landlord and do a full property inspection to ensure that unauthorized pet did not cause damage. Now, if you're allowing pets, and we do encourage landlords to allow pets, you want to have a pet addendum. But this is good language if you're not allowing pets in your lease agreement. Number three, hey, we're in Colorado. Have to talk about marijuana. You as a landlord do not have to allow it, but you must strictly prohibit it in order for that to happen in your lease. So you want to have a clause that says something like this. Recreational marijuana use is legal in Colorado. However, both Colorado law and federal law give us the right to prohibit it. Marijuana use, possession, and/or growing is prohibited on the property and violators will be evicted. We do not recommend that landlords allow marijuana, whether it be medical or not, in their properties, especially growing because it can cause problems with mold, humidity, electrical usage, things that you don't want to mess with as a landlord. But again, you must strictly prohibit it in your lease. Number four deals with appliances. We like this clause. If any appliance ceases to function, we may or may not repair or replace the appliance at our discretion. That means if a tenant is abusing an appliance, we don't necessarily, you don't necessarily as the landlord have to repair that appliance. Colorado state law says if you provide it you must maintain it. So you still have to maintain these things, but you don't necessarily have to replace them if the tenant is being negligent with that appliance. And last deals with something called subrogation of insurance. Now, this is over my head, but this is what our attorneys recommend and it's a great solid lease. It says this. Unless prohibited by law, resident waives any insurance subrogation rights or claims against the landlord, owner, and their insurers. Because there's this thing in law, and what it does is it allows a tenant to subrogate, or to assign, an insurance claim against a landlord to an insurance company. So if a tenant slips and falls and breaks their leg, maybe they're not gonna sue the property management company, or they're not gonna sue you as a landlord. They're gonna file a claim with their own insurance, let's pretend. And let's pretend that insurance company who they filed a claim with says, you know what, Mr. Tenant? Tell you what. Subrogate your claim to us. In other words, allow us to sue the landlord on your behalf, Mr. Tenant. Landlords have deep, or excuse me, insurance companies have deep pockets. They'll do that. So you do not want to allow your tenant to subrogate their claim to an insurance policy. Now, does this happen very often? Probably not. It doesn't. But if it does happen it's a big deal. So you are allowed, by Colorado state law, to prohibit that subrogation. Important clause to have in your lease. Now, if you're a current client of Grace Management, we've got these, plus many other clauses, already covered in your lease. You can sleep well tonight. Whether or not you work with us or somebody else though, take the time to review your lease agreement. Ensure that it's fair. Ensure it protects you. Ensure that it's prepared by an attorney. That's required by Colorado state law as well. So don't just go download one off the internet somewhere. Get it prepared. It will do a great deal of ensuring you have a good, solid, long-term relationship between you and your tenant. If you've got questions give us a call. We'd be happy to answer them.