Do You Need Private Mortgage Insurance?

Do You Need Private Mortgage Insurance?

Two Clauses That Must Be In Your Leases To Avoid Trouble

by Luke Fields

The saying "Good fences make good neighbors" is an exhortation that setting boundaries is the key to having good relationships with others. As a landlord, it's important to set the ground rules with tenants to avoid personal and legal headaches, and these rules should be clearly outlined in your lease. Here are two clauses you need to make sure appear in your rental contracts.

Marijuana Use

Currently, 28 states have legalized marijuana in some way and 17 more are looking to decriminalize use of the drug in 2017. While this may be great for people who like to use cannabis and for the states that will reap millions of dollars in tax revenue, it's not so great for landlords who have to deal with tenants that want to smoke it in their rentals.

There are a lot of legitimate reasons to ban the use of cannabis on your property. Marijuana cigarettes can cause the same smoke and burn damage that cigarettes do. The smell may drift into neighboring rental units, generating complaints. And marijuana is still illegal at a federal level, which can cause you to lose your property if the tenant does something to violate federal law and lead the government to seize your building via civil forfeiture.

Whether you allow the use of marijuana on your property or not, it's critical you write that in the lease contract, what the rules are if you do allow it, and the consequences the tenants will face if they break the rules (e.g. eviction if caught using it). This ensures tenants know where you stand regarding the use of cannabis on the property and provide you with a way to get rid of tenants who can't respect your wishes.


Subleasing is not new. Tenants who can't live out the rest of their leases will often find people to live in the apartment for the remaining months. However, with AirBNB and similar companies providing ways for people to make money renting out their spare rooms, it's important you address this issue in the lease to avoid being held liable for things that may occur while someone who's not the tenant is staying in the rental. For instance, if the tenant rents to a person who been convicted of a violent crime, you could be held liable if that renter hurts someone on the property.

Like with marijuana, you need to clearly state in the lease whether subleasing is allowed and detail the rules regarding it. For instance, you can require the subleasee to submit to a criminal background check before he or she can take over the apartment.

For more information about designing your rental contract or help managing your rental properties, contact a property management company.


About Me

Do You Need Private Mortgage Insurance?

Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.