A well-written lease agreement is one of the most important protections you can put in place for yourself as a property owner and for your tenants. While it’s required to ensure compliance with the law, it’s also an effective tool in preventing disputes and maintaining accountability.

Thorough lease agreements tend to mean fewer questions from your tenants and, when issues do arise, quicker resolution to any disputes. Because, like all contracts, lease agreements generally aren’t that useful and important until there is a problem.

One of the Most Important Lease Clauses You Hope to Never Use

There are several critical clauses you should include in your Franklin County lease agreements. Examples include defining maintenance responsibilities, naming property ownership – specifically appliances (you don’t want the tenant moving out with your refrigerator!), spelling out tenant fees, and being clear about your pet policy.

Another essential lease clause that ideally you’ll never need to use is the order in which payments are applied. This is a big one because it can lead to eviction ramifications.

Just Say “No” to Partial Payments

The reason it’s important to be clear in your lease about the order in which payments are applied is because if a tenant attempts to make a partial payment, they might assume they’re good for the month. They’re not.

First, you shouldn’t even accept a partial payment. But second, your lease should explicitly state the order in which any payments will be applied when a tenant does make a payment. Our policy is for payments to first be applied to late fees, then to eviction fees, then to utility fees, and finally to rent.

For example, say your tenant owes $1000 in rent and $200 in utilities. They submit a $1000 payment, which they may interpret as a “full” rent payment. In the tenant’s mind, they may be thinking they’ve paid the full rent amount, and they’ll just catch up with the extra utility bill next month.

Again, in this situation, we recommend that you don’t accept the partial payment. Why? Because you wouldn’t be able to start the eviction process if you accept even a partial payment. By accepting that incomplete rent payment, you’ve essentially demonstrated that you’re ok with the partial amount. In Ohio, this is how judges have traditionally interpreted it.

Be Clear in Your Lease

While this may be an edge-case scenario, it’s always advisable to have language in your lease related to the order in which payments are applied. The more specific you can be in your lease, the more protected you and your tenants will be if something were to happen.

If you have questions about lease agreements for your Columbus rental units, give our team at RL Property Management a call at 614-725-3059.