Whether you’re the owner of a single rental property or hundreds, you may need to use lease amendments at some point. These are short legal documents that can alter the terms of your lease or add new clauses to it, allowing you to handle specific issues as they arise or keep up with changing laws and standards. If you’re not sure what they are, why you should use them, or how to properly handle them, this blog will give you the information you need to ensure that your lease amendments are effective and legally binding.
What is a lease amendment?
A lease amendment is a modification to an existing rental agreement between the landlord and tenant. This change can happen for various reasons, but often happens when the property has been improved, or if changes in the legal requirements for renting out a unit occur. Most amendments will result in increased rent as compensation for work done on the property, so it's important to be clear about how much of an increase will happen before making these changes.
Why amend the lease?
It's always a good idea to have a lease amendment up your sleeve. One reason is that there might be certain clauses in the original lease that are no longer relevant or legally binding. Some examples include clauses about pets, laundry service, additional parking spaces, rent increases for an additional unit, etc. With a lease amendment in place, these particular clauses can't be enforced. Another reason it's wise to use lease amendments is when someone else has taken over the property as a new landlord with different ideas about how things should be done.
Which kinds of amendments are possible?
The landlord can request additional terms or provisions in the amended agreement, while the tenant can agree to modify provisions that are no longer favorable or acceptable. This may include changes related to pets, smoking, utilities paid by either party, and others. There are two types of amendments - major amendments and minor amendments. Major amendments require consent from both parties.
It is also important to note that there is information needed to be included in a lease amendment. Here’s the information you need to add:
The section of the lease that is being amended: This section should specify the changes or revisions you are making to a paragraph of the original lease agreement. To ensure that the correct information is included, it may be good to refer to the lease agreement while writing the revisions.
The parties involved: The amendment should include your name (or the name of your LLC) as well as the names of your renters.
The effective date: Include the date that the amendment will go into effect. In most cases, landlords make the first day of the following month the effective date.
Do the Original Lease Terms Still Apply When Adding Lease Amendments?
The terms of the current lease agreement still apply despite the addition of a new lease amendment. Lease amendments may supplement a lease agreement with new rules and guidelines, but they do not override the original lease.
Lease Amendment vs. Addendum: Are They the Same Thing?
Although lease addendums and lease amendments are frequently used interchangeably, they are actually two distinct categories of legal documents. A lease addendum supplements or adds to a clause in the original lease agreement, whereas a lease amendment helps modify an active lease agreement.
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