Is Your Lease Agreement Missing These Key Clauses?

By Shelby Campbell

With over two and a half decades of unwavering commitment to the mortgage industry, I am your seasoned Mortgage Loan Officer dedicated to helping individuals and families achieve their homeownership dreams.

Is your lease agreement missing important clauses? A well-crafted lease agreement isn’t just paperwork; it’s your best defense against nonpayment, disputes, and unexpected tenant issues. Yet, many landlords overlook critical clauses that can protect their rental income and property. In 2025, with over 44.1 million American households renting, it’s more important than ever to have a clear and legally binding lease. That’s why I’m sharing the top three clauses every lease should include. Here’s what you need to know:

1. Clearly identify all tenants on the lease. A strong lease must clearly define who is legally responsible for paying rent and following the lease terms. One of the biggest mistakes landlords make is failing to list every adult tenant on the lease. If a tenant’s name isn’t included, they aren’t legally responsible for rent or lease obligations, which can create serious issues down the line. To prevent future problems, always require government-issued IDs, income verification, and a credit check to confirm eligibility and avoid rental scams.

Additionally, make sure all tenants sign the lease, not just one person in a shared household. If someone moves in without being on the lease, you may struggle to collect rent or enforce lease terms. This will leave you vulnerable to financial and legal headaches.

2. Your lease terms should cover every cost. Your rent should do more than cover the mortgage; it needs to account for taxes, insurance, and yearly maintenance (about 1–2% of the property’s value). If your property has HOA fees or you use a manager, include those too.

A simple rule many landlords use is the “1% rule,” where rent equals about 1% of the property’s value. But every market is different, so adjust as needed. The key is finding the sweet spot that is profitable for you, but still affordable enough to keep tenants in place.

3. Adjust your lease terms to stay profitable and keep your property occupied. Don’t just set the rent and forget it. Watch demand: if no one’s applying, the rent may be too high. Offering small incentives, like flexible lease terms, can help attract tenants.

Revisit your rent each year since market trends change. Updating when needed keeps your property competitive, rented, and profitable year-round.

A strong lease agreement is your best tool for preventing misunderstandings, protecting your rental income, and ensuring a smooth landlord-tenant relationship. By clearly defining tenant responsibilities, lease terms, and financial obligations, you can avoid common disputes and legal headaches.

If you need help structuring your lease, I can guide you through best practices and key legal considerations to ensure your agreement is solid and enforceable. Just call (503) 563-8875 or email shelby.campbell@fairwaymc.com. I’ll be glad to help ensure that your lease protects your investment.