Guide to Making a Solid Lease Agreement For Your Rental Property

1946674 • January 8, 2025

A lease agreement is a legal contract that defines the obligations and rights of both the landlord and tenant. Having a clear, well-written lease can help prevent disputes, clarify expectations, and provide a framework for resolving issues that may arise during the rental period. In this guide, we’ll walk you through the key components of drafting a strong lease agreement, explain why these elements matter, and highlight the importance of disclosures.



How to Draft a Lease Agreement

The goal is to create a clear, detailed document that outlines the terms of the rental arrangement. The key steps involved in drafting a strong lease are:


Create a Template 

Templates help ensure that you don't leave out important disclosures or policies. Many templates are available online and can be customized to fit your specific needs. However, be cautious when using templates found online — make sure they comply with local laws and fit with your specific property’s needs.


Clearly Define the Terms

The lease agreement should clearly define the rental period, the rental price, payment due dates, and any penalties for late payments. It should also list vital policies, tenant and landlord rights and responsibilities, and important rental laws. The more detailed you are, the less room there will be for confusion later on.


a person in a blue blazer reviewing a document at their desk

Hire a Property Manager

If you find the process of drafting and managing lease agreements overwhelming, hiring a property manager can be a smart solution. A qualified property manager can handle not only the day-to-day operations of the residential rental property but also the legalities involved in lease agreements.



The Importance of a Leasing Agreement

A lease agreement is crucial because it provides a legal record of the rental terms. This document can be referred to in the event of any disagreements or misunderstandings between the landlord and tenant. A well-structured lease can also prevent issues such as late payments, property damage, or unauthorized tenants. In the absence of a lease agreement, a landlord may have difficulty enforcing their rights as the property owner.


The Role of Disclosures in Lease Agreements

Disclosures are an essential part of any lease agreement. These are statements that landlords are legally required to provide to tenants. Depending on the location of the property and the nature of the rental, here are several types of disclosures that may be required:

  • Lead Paint Disclosure - If the rental property was built before 1978, federal law requires landlords to provide tenants with a lead paint disclosure.
  • Mold Disclosure - In some states, landlords must disclose the presence of mold or any history of mold issues in the property.
  • Pest Control Disclosure - Some states require landlords to inform tenants about past pest control treatments or current pest problems.
  • Security Deposit Laws - Some states have specific disclosure requirements regarding how and when the security deposit will be returned.


a real estate professional going over a contract with two new tenants

Key Elements Every Lease Should Include

Here are some of the essential components every lease should include:

  • Names of All Parties - The lease should identify the landlord and all tenants by their full legal names to clarify who has the right to live in the rental property.
  • Security Deposits - Specify the amount of the security deposit, conditions for its return, and any potential deductions.
  • Rental Property Description - A detailed description of the property should include the address, unit number, and any specific areas around the property that are part of the rental agreement.
  • Lease Term - Clearly state whether the lease is for a fixed term or a month-to-month rental. If it’s a fixed-term lease, include the start and end dates. If it’s a month-to-month lease, specify the required notice period for both parties to terminate the agreement.
  • Rent Payment Term - Outline the monthly rent amount, the due date, and acceptable payment methods. Include information on late fees and any grace periods for late payments.
  • Utilities - Specify which utilities are included in the rent and which ones the tenant is responsible for.
  • Maintenance Responsibilities - Indicate who is responsible for routine maintenance, repairs, and upkeep.
  • Pet Policy - If pets are allowed, specify any restrictions and any additional pet deposits or fees.
  • Rules and Regulations - Include any additional rules or regulations related to the property, such as noise restrictions, smoking policies, or parking rules.
  • Eviction Terms - Explain the conditions under which the tenant can be evicted.
a landlord in a dark suit watching a tenant sign a lease agreement

Critical Clauses and Policies to Address

Here are a few other clauses and policies that landlords should consider including in their lease agreement:


  • Right of Entry - Add a clause that explains the landlord’s right to enter the rental property, including the notice required before entry.
  • Renewal or Termination Options - If the lease is for a fixed term, specify whether the lease can be renewed and the process for doing so.
  • Subletting and Assignments - If you don’t want tenants to sublet the property or transfer the lease to someone else, include a clause that prohibits it or sets conditions for approval.
  • Alterations to the Property - If you don’t want tenants making changes to the property, include a clause that restricts or outlines the process for making alterations.
  • Insurance Requirements - Some landlords require tenants to obtain renters’ insurance, which can protect both the tenant’s personal property and the landlord’s property in case of damage or theft.


Bottom Line

A solid lease agreement is essential for protecting both you and your tenants. By addressing the key components outlined above, you can avoid common pitfalls and ensure a smooth landlord-tenant relationship. Additionally, including the necessary disclosures and clauses can help protect you legally and ensure that your tenants are informed of their rights and responsibilities.


At American Heritage Properties, our team is experienced in helping landlords create clear, comprehensive lease agreements that protect their interests while complying with all local and state laws. If you want solid and legally sound lease agreements, contact our property management team today!

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You wouldn’t perform surgery without going to med school, right? Running rental properties in 2025 without staying on top of housing law is pretty much the same kind of gamble. The difference is that the scalpel here is your livelihood—and if you slip, it’s your name on the lawsuit, your wallet that bleeds, and your business that tanks. It’s easy to think rental laws are static background noise, but they’re more like a rolling thunder that can break wide open with a single legislative vote. And lately, the storm’s been gathering. Eviction Rules Aren’t What They Used to Be If you’re still operating on the assumption that you can remove a tenant with a simple 30-day notice, it’s time to update your playbook. Cities and states across the country have reworked their eviction rules with laser focus on tenant protections. In some places, you now need just cause to terminate a lease—even at the end of its term. Others require mediation before a single notice can be posted on a tenant’s door. These new rules can delay vacancies, interrupt cash flow, and expose you to fines if you don’t play by the letter. Missing one line on a notice? That’s grounds for dismissal of your case. Multiply that by multiple units and you start to understand the stakes. Zoning Adjustments Are Changing the Game It’s not just what you do with your property—it’s whether you’re even allowed to do it. Zoning laws are morphing faster than many landlords realize. Single-family homes are being rezoned for multi-units. Short-term rental restrictions are clamping down in urban areas. Some cities are even pushing mandatory mixed-income developments. These shifts aren’t theoretical; they can instantly turn a profitable investment into a paperweight. You need to know when your area is holding planning meetings and who’s drawing up those maps. Otherwise, you’ll be stuck with a building the law doesn’t know what to do with anymore. Keeping Legal Documents Streamlined Amid Shifting Laws When laws change, your paperwork needs to change with it—and fast. Landlords and property managers who stay organized in this evolving landscape usually rely on systems that treat documents as living files rather than static archives. Instead of rebuilding lease agreements or legal notices from the ground up, smart operators use tools that let them add pages to existing PDFs, making updates seamless and traceable ( check this out ). This kind of flexibility turns a potential compliance headache into a manageable, routine update. Safety Compliance Isn’t a Checkbox Gone are the days when a fire extinguisher and a smoke detector meant you were covered. Safety regulations now include detailed accessibility guidelines, upgraded HVAC mandates, seismic retrofitting, and environmentally safe materials in some states. And these aren’t just best practices—they’re enforceable standards. 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And in this business, reacting is just a polite way of saying “scrambling.” Tenant Rights Keep Expanding It’s not just eviction protection that’s evolving—tenant rights in general are in full bloom. From privacy rules to regulations about how often and under what conditions you can enter a unit, the legal landscape is moving toward empowering renters. There are new rules about appliance repairs, mold remediation, and even limits on security deposit deductions. If you’re not up to date, you risk violating these rights without even realizing it. And in today’s digital age, all it takes is one savvy tenant with a smartphone to turn your ignorance into a viral TikTok—and a public relations disaster. Your Liability Is on the Line Let’s talk risk. Every law you don’t know is a lawsuit you didn’t see coming. Tenants have more access than ever to legal aid, tenants' unions, and social media support. 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Working with someone like that means you’re not just outsourcing tasks; you’re insulating your business from legal whiplash. And that kind of insurance? It’s priceless. Knowledge Is Profit in Disguise Staying informed about housing laws isn’t just a chore to check off your list—it’s a strategic advantage. When you know what’s coming down the legal pipeline, you can budget for repairs, adjust lease terms, plan tenant communications, and avoid costly missteps. You also get the peace of mind that comes from knowing your investment isn’t sitting on a ticking time bomb. Being proactive here doesn’t just protect your wallet—it protects your sanity. Running rental property in 2025 isn’t about doing what you did in 2015. The rules have changed. The risks have grown. And the smartest investors aren’t the ones who know the best paint color for a kitchen—they’re the ones who know what law passed last month in their city council. If you’re in the game for the long haul, treat legal literacy like part of your business model. Because when it comes to real estate, what you don’t know can—and will—hurt you. Discover unparalleled property management services with American Heritage Properties , where our dedicated team ensures your San Diego investment thrives with quality tenants and exceptional care.
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