What is an NAA Lease Contract?
An NAA Lease Contract is a standardized rental agreement used primarily by residential housing providers and managers as a legal document binding a property owner and tenant to the agreed-upon terms of tenancy. This type of lease contract is commonly used in the rental property industry in the United States and regulated through the nationally recognized National Apartment Association (NAA) – a prominent association of residential property owners and managers. Based on the relationship between property owner and tenant , an NAA Residential Lease Contract generally includes sections for rental terms, security deposit and utilities, the number of occupants and the like. Other important lease provisions frequently included are for property rules and restrictions, maintenance work and repair, eviction and termination, entry and right of possession, liability and indemnification, and any additional rules or regulations.
Important Terms in an NAA Lease
A short description of the San Antonio NAA lease Contract is included below:
Term. The duration of the lease, which can range from a month-to-month agreement to a multiyear contract.
Rent. The amount the tenant must pay to the landlord to occupy the property.
Security deposit. Money the tenant pays when moving into the rental space, which the landlord holds until the duration of the lease.
Utility charges. A landlord may assign responsibility for payment of utility bills to the tenant or the landlord.
Tenant’s obligations. Expectations for the tenant’s use of the property and obligations during the period of tenancy.
Landlord’s obligations. Expectations for the landlord’s care for the property and obligations to the tenant during the duration of the lease.
Termination of the tenancy. How and when either party can terminate the contract.
Maintaining the property. How to deal with repairs and updates to the property.
Advantages of an NAA Lease
Using a standard, National Apartment Association (NAA) Lease Contract template has its benefits for both landlords and tenants. These benefits can be grouped into two broad categories: standardization and legal enforceability.
Standardization
The NAA leases are standardized so that you know exactly what you are getting, which is practical for both parties. According to the National Apartment Association’s website, the majority of apartment communities across the United States use an NAA Lease Standard Form.
In the NAA states, landlords, tenants, and apartment communities all know the lease terms that are required by the NAA and have accepted these terms as the standard for their particular state. There are no negotiations between the landlord and tenant.
Legal Enforceability
The National Apartment Association has been in business for over 70 years and has been lobbying for the Apartment Association for over 50 years. Many lawmakers have been made aware of the NAA leases, so when it comes to litigating an apartment dispute, they can look to the NAA leases and other NAA guidelines to help interpret the law.
In other words, the NAA leases have a long history of being utilized and followed, and because the NAA is so well respected, many lawmakers will follow suit in recognizing the validity and enforcement of the NAA leases, especially for the approximate two-thirds of apartment communities in the United States who use a NAA lease.
How to Edit an NAA Lease
Legally, altering a residential lease is permitted to the extent that such changes do not materially alter the lease in any way. However, when using the NAA/NMHC Apartment Lease, it is important to bear in mind that the form was drafted as a broad consensus of all large and mid-sized national residential rental property owners, and large and mid-sized national apartment trade associations. In other words, there are industry-wide consensus decisions built into the form, and before customizing the lease, it is important to consider the impact of customizing the lease on that consensus. Once this is considered, then it is possible to customize the lease in accordance with your needs, for example, to address ordinance requirements, state law requirements, or your unique management needs.
When considering changing the lease, first consult with your state lobbyist or legal counsel, who may have already developed a customized version of the lease. Given the widespread use of the lease, this is increasingly true with some large and mid-sized national associations. If not, review the lease for possible changes. Two examples include:
These are just two examples of changes in the lease that may be required by local ordinances or state or federal law. There are certainly other areas where changes may be necessary or helpful to meet your needs; this is just meant to guide you through the process.
Common Mistakes with NAA Leases
For all the usefulness and clarity that the NAA Lease Contract provides, there are still a number of common pitfalls tenants and landlords face when using an NAA Lease Contract. One common pitfall is neglecting to underscore, in very large letters to the idling tenant, the fact that violation of any of the "non-standard" clauses, or any least provision of the lease for that matter, will be grounds for immediate termination of a lease and retaliatory eviction. This is particularly true when it comes to non-payment of rent. It is critical that landlords who use an NAA Lease Contract be aware of default and termination issues so that they are able to protect their rights, and the rights of their tenants, to the fullest extent possible.
Another common pitfall is landlords’ respective reliance on the NAA Lease Contract with regard to repairs . The NAA Lease Contract can protect and benefit either party (or both), and although it is more difficult to be more specific and thorough in a form of lease than in a custom lease, landlords should take care to include any issues they anticipate could arise before, during, or after a tenant’s stay. While this is a two-edged sword for the tenant, who does not want to consent to unreasonable requests from the landlord on the strength of the NAA Lease Contract, it does indicate that it is more important than ever that the lease be well and thoroughly drafted. Parties wishing to use the NAA Lease Contract as a template will have to supplement the NAA Lease Contract here and there, to fit the unique circumstances that each approach may entail. When supplementing the NAA Lease Contract, parties should also be very careful not to use language that indicates a waiver of DTPA rights, nor should they use so-called "tacking" or credit-in-payment language.
Legal Considerations of NAA Leases
The lease contract is the central document to the tenant-landlord relationship. The NAA Lease Contract (exclusive between the owner/manager of a dwelling unit and applicants/tenants) is the most widely used lease contract in the country. The legal implications of signing the NAA Lease Contract should not be underestimated.
The lease creates legally enforceable rights and obligations – rights and obligations that are essential to the relationship and which will, if breached, have significant"problems" for each of the parties to the contract. If the owner/manager fails to perform in accordance with the lease contract (or even makes material "misrepresentations" concerning the contract terms) legal claims against the owner/manager could involve not only specific performance, but also monetary damages, the expense of attorneys’ fees, and in the most extreme cases: property forfeiture. On the other hand, if the resident fails to perform in accordance with the lease terms, including failing to make rent payments when due or otherwise failing to perform in accordance with the rental agreement, the resident could cost the property tremendous amounts of money, may be ordered to return a substantial amount of money to the owner/manager, and could even be evicted from the unit in a summary procedure.
Recognizing the importance of the lease contract is essential to the successful relationship between owner/manager and the resident(s). The parties who sign the lease contract need to understand the legal implications of the terms of the lease contract, such as the owner or manager’s obligation to provide what is described in the lease (title, such as Apartment #). Failure to do so may result in a rent decrease or even the right to terminate the lease and vacate the unit. The same is true for the resident in the event the resident does not perform, including paying rent or abiding by the restrictions set forth in the lease, the resident’s may face problems, including eviction.
Signing and Reviewing an NAA Lease
For most, the biggest focus in lease negotiation is usually in the advance review stages. However, there are some key final steps in the review process that should be observed when leasing multifamily communities. In reviewing the contract, pay special attention to these three considerations:
1) Final Review and Signature. Once negotiations are complete and you have drafted your final version, it is always a good idea to have someone else review before you forward to the other side. The most common mistake here is the language has changed and is no longer consistent with your previous drafts. While standing on principle may feel good , it often inflates the deal size and causes unwanted confusion and frustration. Just say "no" and start the chain all over again.
2) Organization. How do you organize final contracts? Are they filed alphabetically by asset name? By agreement type? What with them? Do you keep pencil drafts? Only signed copies? Knowing how you capture and refer to the information in the future will save time and energy down the road when you need to review. Another important last step is to have a final version of the contract signed by both parties. Until the agreement is signed, the document is not valid. The most effective way to execute the contract is to print and sign two hardcopies. It is then important that the contract be scanned and stored electronically and filed on each party’s server. The hardcopies should be kept in a secure place.