Are you making a lease or a month-to-month rental agreement?

This rental form allows you to create either a fixed-term lease or a rental agreement.

• A lease runs from one specific date to another, and typically lasts for a year. The lease expires on its own; neither landlord nor tenant need give notice. The terms of the lease cannot be modified midlease unless both parties agree.
• A month-to-month rental agreement self-renews every month, unless landlord or tenant gives the required amount of notice. Landlords may modify the terms of the agreement using the same notice period.

If you have chosen to make a lease, you'll see that the "Term" clause ends with an informative statement regarding a tenant's right to terminate the lease and move if the tenant is the victim of sexual assault or abuse on the premises. A tenant who is the victim of such abuse may move, after providing the landlord with the proper documentation, without responsibility for future rent. But landlords are entitled to back rent, if any exists at the time the tenant moves. By law, however, you may not collect back rent unless your lease includes the aforementioned informative statement. (Tex. Prop. Code Section 92.0161.)

For more information on Texas law, see the Texas Attorney General's explanation of Tenant Rights and the resources noted on that page. See also the Landlords and Tenants Guide, published by the Real Estate Center of Texas A&M University.

How do I establish a legal occupancy policy for this rental? In order to avoid overcrowding, Texas law limits the number of people who may reside in the rental. Landlords may allow up to three adults per bedroom (a bedroom is a room intended for sleeping, and excludes a kitchen, dining room, bathroom, living room, utility room, closet, or storage area; and an adult is someone 18 years old or older). (Tex. Prop. Code Section 92.010.)

These rules concern the maximum number of residents you may allow. But can you set an occupancy policy that provides for fewer occupants per bedroom? You may adopt a policy of two persons per bedroom, but you may need to allow more occupants if the application of federal or state fair housing law would so require -- for example, if your bedrooms are unusually large and would accommodate more residents.

Be certain that you do not apply an occupancy policy in a way that discriminates against families with children. And be realistic -- the presence of a newborn or infant usually will not create overcrowding.

Finally, you must allow an adult to occupy a dwelling that already has a maximum number of residents if that person is a victim of domestic violence, but for one month only.

What does "joint and several liability_desktop" mean?

Your rental document advises multiple tenants that each tenant will be responsible for paying rent and abiding by all the terms of the agreement. (If you're renting to a single tenant now, it puts this tenant on notice that tenants who join the lease later will also be subject to this rule.) The rule means that you can legally seek the entire rent from any one of the tenants should the others skip out or be unable to pay. It also gives you the right to evict all of the tenants even if just one has broken the terms of the lease.

How much notice must I give to terminate a month-to-month rental agreement?

By law in Texas, all notice periods are 30 days unless landlords and tenants agree to something else in writing. (Tex. Prop. Code Section 91.001.) Most landlords choose a 30-day period, finding that this gives both parties the flexibility they need while also giving each other a reasonable amount of warning. If you choose different notice periods, be careful not to specify a short notice period from the tenant and a long one for the landlord -- a court may not uphold it.

How do I establish a legal late fees policy?

Late fees can be a powerful motivator for on-time rent payments. But they must not be excessive, or a thinly disguised profit center. A late fee isn’t to penalize the tenant -- it's to compensate you for your losses caused by the late payment.

Texas law allows you to choose an initial fee and a subsequent daily fee. To estimate your losses, consider the interest you’ll lose on the unpaid rent, the staff time it will take to document unpaid rent and request that it be paid, and other direct consequences of late payments. As a general rule, total late fees that are more than 3% to 5% of the total monthly rent are targets for lawsuits. So, for example, if the monthly rent is $1,500, you shouldn't charge more than $45 to $75 as a total late fee. You could write your policy like this: “$25 for the first day the rent is late, plus $10 per day for each succeeding day, up to a maximum of $75.”

What are the rules regarding repairs and alterations?

This clause makes it clear that the tenant may not make alterations and repairs without your consent. It also covers locks and other security devices.

The "except as provided by law" language in subsection a refers to the fact that in certain situations, tenants have a narrowly defined right to alter or repair the premises, regardless of what's in the rental agreement. Examples include:

• Alterations by a person with a disability. Under the federal Fair Housing Amendments Act, tenants who have a disability may modify their living space to the extent necessary to make the space safe and comfortable, as long as these modifications don't pose an unreasonable burden to you.
• Use of the "repair and deduct_desktop" procedure. Tenants in Texas have the right to repair defects or damage that make the premises uninhabitable or substantially interferes with the tenant's safe use or enjoyment of the premises. (Tex. Prop. Code Sections 92.056 and 92.0561.) The tenant must first notify you of the problem and give you the time specified by law to fix it.
• Satellite dishes and antennas. Federal law gives tenants limited rights to install wireless antennas and small satellite dishes.
• Installation or repair of security devices. Under the Texas Security Devices Act (Tex. Prop. Code Sections 92.151 and following), tenants may install or repair certain security devices when the landlord fails to do so, and may deduct that cost from the next month's rent. Your tenant's requests must be in writing.

What does the "possession of the premises_desktop" clause mean?

This clause explains that the tenant who chooses not to move in (take possession) after signing the lease must still pay rent and satisfy other conditions of the agreement. By law in Texas, if the tenant has already paid you a security deposit, you may not retain it if you or the tenant have procured an acceptable replacement who moves in on or before the lease begins. If you secure the replacement, you may retain and deduct from the deposit a sum equal to your actual expenses in finding a replacement, including a reasonable amount for your time. (Tex. Prop. Code Section 92.1031.)

The clause also protects you if you're unable, for reasons beyond your control, to turn over possession after having signed the agreement -- for example, if a fire spreads from next door and destroys the premises, or if former tenants refuse to move out. The new tenant is entitled to consider the lease terminated, but your financial liability to the new tenant will be limited to the return of any prepaid rent and security deposit (the "sums previously paid").

What does the "covenant of quiet enjoyment_desktop" mean for both landlord and tenant?

Your rental document requires both landlord and tenant to refrain from violating laws and causing disturbances, and to maintain the tenant's right to "quiet enjoyment." In particular:

Landlord. Your promise to give the tenant "quiet enjoyment_desktop" means that you will preserve the ability of the tenant to use and enjoy the rented premises. Examples include not allowing garbage to pile up, dealing with a rodent infestation, and controlling a neighboring tenant on your property whose constant loud music makes it impossible for other tenants to sleep.

Tenant. This clause also forbids tenants from interfering with other tenants' or nearby residents' ability to reasonably enjoy their homes. For instance, a tenant who hosts loud, late parties has interfered with others' quiet enjoyment. Serious and repeated violations of the covenant of quiet enjoyment on the part of the landlord entitle the tenant to break the lease and move out. Such violations on the part of the tenant allow the landlord to terminate the tenancy.

How do I supply legally-required lead-hazard documentation?

With some exceptions, all landlords must complete the federally required Lead Paint and Lead-Paint Hazards Disclosure form and give it to prospective tenants. Your lease includes a clause in which landlords who are not exempt from this requirement state that they have complied with the rule (exemptions are explained in the Help sections of the clause). You can download the Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards from the EPA website. Fill it out by hand. Be sure to keep a copy for your records.

Note that if you're renting a unit in a multitenant building, the requirement that you disclose information includes records and reports concerning common areas and other units, when such information was obtained as a result of a building-wide evaluation.

If you are not exempt, you will also need to give your tenant a copy of the EPA pamphlet Protect Your Family From Lead in Your Home.