Written Lease Agreements are Best
A written Montana residential rental lease agreement is your best safeguard against disputes with your tenants so long as it clearly sets forth your obligations and those of your tenants. If you do have an oral agreement, it may not be for more than one year. Although your rental lease agreements is a contractual arrangement, you should strive to treat the relationship with more personal care and attention. By doing so, you are more likely to have satisfied tenants and ones who will remain longer. Also, any obligations or expectations you expect of your tenants must be in writing or they will likely not be enforceable unless it is an essential term such as rent.
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As a landlord, you are expected to provide a residence that is fit and habitable. This means that your tenants will have certain services that are in good working condition including heat, running and hot water, electricity, plumbing and appliances. Should these facilities or systems fail, it is your responsibility to repair them.
By law, you must treat rental applicants and tenants equally and not discriminate against them based on race, color, creed, gender, national ancestry, familial status or disability.
Other obligations include:
- Comply with all state laws and local ordinances, housing and building codes that were in effect when the housing was build and that pertain to the safety and health of the tenants—applies only to housing built after July 1, 1977
- Make necessary repairs to restore essential services in a timely manner
- Provide smoke and carbon monoxide detectors in each unit
- Maintain common areas
- To not retaliate against a tenant for joining a tenant organization or for complaining to a public agency about the condition of the premises or your failure to repair
- To enter the unit after giving reasonable notice and at reasonable times
Tenants also have implied obligations but they should be included in your rental agreement:
- Keep the dwelling clean and sanitary
- Properly dispose of trash and rubbish
- Comply with building and health codes
- Operate and use appliances and facilities in an appropriate manner
- To not damage, deface, alter or remove any part of the premises
- To return the premises in substantially the same condition as when first occupied
- Not engage in criminal activities on the premises
- Notify the landlord if repairs need to be made
- Pay rent on time and adhere to all other lease provisions
- To not disturb any other tenants’ rights to quiet enjoyment of their units
Contents of the Montana Residential Rental Lease Agreement
Your lease should contain most of the following terms and conditions that has essential terms and disclosures and optional terms depending on your own situation with your tenants.
- Name of property owner and property manager; address where rent is to be paid; emergency or maintenance contact information; address and name of person to whom legal documents and notices are to be served
- Names of all the tenants and any other occupants—have all adult tenants sign the lease so that they are jointly and severally liable for the lease terms, including the rent
- Address of the premises
- Beginning and end dates
- Amount of rent and date it is due—state grace period and amount of late fees
- Insufficient check fees—give a time within which to pay or collect amount due plus any court costs, service and collection costs and processing fees
- Provide rules that apply to all tenants fairly, are clearly worded and that promote the convenience, safety and welfare of the tenants; preserve your property and are not intended to avoid your own duties and obligations—any rule that is a material change in the rental lease agreement in a month-to-month lease must be in writing and not apply until 30-days after notice is given
- Security deposit:
- no limit though most deposits are one month
- no requirement that funds be kept in a separate account
- if paid in cash, must give tenant a receipt
- no interest required to be paid
- you must provide a check-in list and statement of the condition of the property
- state that that the funds are to be used for damages that exceed normal wear and tear and, if you wish, for any outstanding rent due upon surrender of possession and for unpaid utility charges or failure to return keys
- that funds will be returned no later than 30-days of tenant vacating unit and sent to a forwarding address that is supplied by the tenant within this time or within the 30-day period submit a written, itemized statement with specific reasons for withholding deposit and including receipts and estimate of the costs of repair and that tenant will have 15-days to send a written objection to any deductions
- recommend that you set a time and date for a mutual inspection a short time after the tenant vacates with check-out list on hand
- Landlord’s obligations as noted above—may provide house or conduct rules that apply to all tenants and are for the convenience, safety and welfare of all tenants, provides for the fair distribution of services and facilities to all and preserves the landlord’s property from damage
- Tenant’s obligations as noted above—you may require the tenant to perform specific minor repairs or maintenance if it does not diminish the obligations of the landlord to provide a residence fit for habitability and the agreement is in a separate writing and tenant receives separate consideration—applies only to one, two or three family rental units
- Party responsible for certain utilities—you may have the tenant be responsible for supplying heat between October 1 and May 1 and for running and hot water if the dwelling is a one, two or three family rental unit
- Major appliances being provided
- No commercial, business or illegal use of premises by tenant or conduct that constitutes a nuisance or is unlawful
- Pet clause—may limit type of pet, weight and require tenant to clean up pet waste in common areas; may charge a deposit except for service dogs
- Subletting clause—whether you allow it and that you have to consent to whomever is the sublessee
- Your right of entry to make repairs, inspect and show to future tenants or purchasers—24 hours’ notice and entry at reasonable hours; indicate that you may enter immediately if it is an emergency
- Notify landlord if absence from unit is to be 7 days or longer
- 3 -day notice to quit required for nonpayment of rent and for other material violations including:
- substantial damage to the premises caused by tenant or persons under tenant’s control that has not been repaired
- unauthorized pets or occupants
- engaged in gang activities
- engaged in criminal activity that endangers the safety of other tenants including the manufacture of illegal controlled substances
- Sublease without consent
- Constant nuisance to other tenants
- Refusing entry to landlord after being given reasonable notice
5-day irrevocable notice to quit if the same violation occurs within 6-months
- Notice for increasing rent—30-days in advance of the effective date of the increase in a monthly lease (may not be for a discriminatory or retaliatory purpose); otherwise, not until the fixed term expires
- Provide disclosure of the presence of lead-based paint on the property for all rental property built before 1978—provide the tenant with an EPA pamphlet entitled “Protect Your Family from Lead in Your Home.”
Security Deposits in Montana
There are no limits on what you may charge as security deposit though if you do, you must supply the tenant with a statement regarding the condition of the premises. You should have a check-in list so that the tenant is aware of what damages may be present and use this list when the tenant vacates. You are not required to deposit the funds in an interest-bearing account.
Your tenant should be aware that the deposit is to be used for damages that exceed normal wear and tear and, if you wish, to pay for rent arrearages when the tenant vacates as well as for outstanding utility bills.
You are required to return the full deposit within 30-days after the tenant vacates or submit a written notice that you intend to deduct the cost of repairs to damage that you specify and that the tenant has 15-days to object in writing. If you fail to send the notice, you forfeit your right to retain any part of the deposit and may be liable for damages to the tenant.
It is always a good idea to have a mutual inspection of the premises so that the tenant is aware of the condition of the premises when the tenancy begins and ends.
Further, be sure that your security deposit obligations comply with local ordinances that may differ from state laws.
Termination of the Lease
A fixed term rental lease agreement expires of its own accord. You or the tenant in a monthly lease may give 30-days’ notice to terminate without giving a reason.
A 3-day notice to quit with an opportunity for the tenant to cure is given for nonpayment of rent, having unauthorized tenants or pets or for damage to the property. The tenant has 3-days to pay the full rent or cease unlawful activities. If the nonpayment of rent or other stated violations reoccur within the next 6-months, you may serve a 5-day notice to quit with no opportunity to cure. Do not accept a partial rent payment unless you state in writing that acceptance does not waive your right to seek eviction for nonpayment.
For all other material violations of the lease, give a 14-day notice with an opportunity to cure. Again, if the identical violation does occur again within 6-months, serve the 5-day unconditional notice to vacate or quit.
Under the federal Servicemembers Relief Act, a tenant who is a member of the American Armed Forces including any of the uniformed services may terminate a fixed term lease if the tenant receives deployment orders to move more than 35 miles from the premises for more than 90 days or must live in a barracks or other residence supplied by the government. The tenant must provide a copy of the orders or at least a written statement from the commanding officer. The tenant must give 30-days’ and has no further obligations under the lease so long as the rent owed for the final rental term is paid.
Repair and Deduct is up to $500
Tenants may deduct up to $500 from the rent, or one month’s rent, whichever is higher, if certain repairs are not made within a reasonable time. You are required to pay emergency repairs as quickly as possible once you are given notice if the condition impairs the habitability of the unit.
The tenant may only deduct the cost of repairs from the rent if you were given notice of the repairs for a condition affecting the tenant’s safety or health and you failed to perform them within 3 business days after the tenant complained to the county or Department of Health. If an inspection reveals the condition to be serious and you still fail to make the repairs, then the tenant may deduct the cost after submitting two estimates from qualified workers at least 5-days in advance of the work.
Call an experienced Montana landlord/tenant attorney if you have questions about your Montana residential lease agreement or about your rights and obligations under state laws or county ordinances.