5 Lease Clauses That Expose Landlords to Liability

Most landlords think of a lease as protection. And it is — when the clauses in it are enforceable. The problem is that many standard lease templates include provisions that may not hold up in your state, and some of those provisions do not just fail quietly. They create affirmative liability.

A clause that exceeds a statutory cap, waives a right that cannot be waived, or imposes a penalty the law does not permit may expose a landlord to damages, penalties, or counterclaims. In some cases, a single non-compliant clause can shift the outcome of an entire eviction proceeding.

Here are five clauses that commonly appear in lease agreements — and the compliance risks each one may carry.

1. Security Deposits That Exceed State Caps

What it looks like:

"Tenant shall pay a security deposit of $5,000 upon execution of this lease."

On a $2,000/month apartment, that is two and a half months' rent. In states that cap deposits at one or two months' rent, this clause may conflict with the statute from the moment it is signed.

The compliance risk:

Many states impose strict caps on security deposits. California limits deposits to two months' rent for unfurnished units. New York caps deposits at one month's rent. Massachusetts sets the limit at one month's first rent. When a landlord collects more than the statutory maximum, the consequences may be significant.

In some jurisdictions, a landlord who collects an excessive deposit may be liable for two to three times the overcharge amount, plus the tenant's attorney fees. Massachusetts, for example, allows tenants to recover up to three times the deposit amount if the landlord fails to comply with deposit handling requirements (M.G.L. c. 186, Section 15B). In New York, a deposit above the cap may be deemed void, and the tenant may be entitled to its return plus interest.

What to check: Verify your state's deposit cap and compare it to the amount specified in your lease. Remember that caps may differ for furnished versus unfurnished units, and local ordinances may impose additional restrictions.

2. Habitability Waivers

What it looks like:

"Tenant accepts the premises in its current condition and waives any claims regarding the condition of the property, including but not limited to habitability."

The compliance risk:

In virtually every state, the implied warranty of habitability is a protection that cannot be waived by lease agreement. It exists as a matter of public policy — a tenant cannot agree to live in a unit that does not meet basic health and safety standards, regardless of what the lease says.

Including a habitability waiver clause does more than fail to protect the landlord. It may signal to a court that the landlord was aware of potential habitability issues and attempted to contract around them. This can undermine the landlord's credibility and may be used as evidence of bad faith in a habitability dispute.

In states with robust tenant protections, a lease that includes unenforceable waivers may also create grounds for lease rescission or damages. If the tenant later discovers code violations — mold, pest infestation, heating failures, structural issues — the waiver clause may actually work against the landlord by suggesting prior knowledge.

What to check: Remove any "as is" or habitability waiver language from your lease. If there are known conditions, disclose them properly rather than attempting to waive liability.

3. Broad Liability Waivers and Hold Harmless Clauses

What it looks like:

"Tenant agrees to hold Landlord harmless from any and all claims, damages, losses, or injuries arising from Tenant's occupancy of the premises, regardless of cause."

The compliance risk:

A clause that attempts to release the landlord from liability for all injuries and damages — including those caused by the landlord's own negligence — is generally unenforceable in residential leases. Courts in most states distinguish between commercial and residential leases on this point: businesses may have the sophistication and bargaining power to negotiate broad waivers, but residential tenants typically do not.

Many states have statutes or case law that specifically prohibit exculpatory clauses in residential leases. Even in states without explicit statutory prohibitions, courts frequently refuse to enforce these clauses as unconscionable or contrary to public policy.

The risk is not just unenforceability. If a tenant is injured due to a condition the landlord knew about (or should have known about), and the lease includes a broad waiver, the landlord may face claims that the waiver demonstrates awareness of dangerous conditions. A clause intended to reduce liability may actually increase it.

What to check: Review hold harmless and indemnification clauses. Narrowly drafted provisions that allocate specific risks (like tenant-caused damage) are generally more defensible than blanket waivers of all liability.

4. Late Fees That Exceed Statutory Limits

What it looks like:

"A late fee of $150 per day shall be assessed for each day rent remains unpaid after the 1st of the month."

The compliance risk:

Late fee provisions are among the most commonly non-compliant clauses in residential leases. A growing number of states and municipalities cap late fees at a specific dollar amount or percentage of rent, and many require a grace period before any fee can be assessed.

When a lease imposes late fees above statutory limits, several things may happen. The fee itself may be unenforceable. The tenant may have a counterclaim for any excess fees already collected. And in eviction proceedings, a court may scrutinize the landlord's compliance with fee requirements — sometimes ruling that improper fees undermine the landlord's case.

Some jurisdictions treat excessive late fees as unfair or deceptive practices, which may carry additional penalties. Daily compounding fees, in particular, may be viewed as punitive rather than compensatory, making them more likely to be struck down.

What to check: Research your state and local late fee caps. Common structures include flat caps (e.g., $50 or 5% of monthly rent) and mandatory grace periods (e.g., 5 to 10 days). Ensure your lease complies with both the amount and the timing requirements.

5. Non-Compliant Entry Provisions

What it looks like:

"Landlord may enter the premises at any time for inspection, maintenance, or any other purpose deemed necessary by Landlord."

The compliance risk:

Most states require landlords to provide advance notice before entering a tenant's unit for non-emergency purposes. The standard is typically 24 to 48 hours, and many states restrict entry to reasonable hours. A lease clause that purports to waive these notice requirements may conflict with state statute.

The risk goes beyond unenforceability. Repeated entry without proper notice may constitute harassment under some state statutes and local ordinances. Tenants may have the right to pursue damages, and in some jurisdictions, a pattern of improper entry may give the tenant grounds to terminate the lease.

In eviction proceedings, a landlord's history of non-compliant entry can become a significant factor. Courts may view it as evidence of bad faith, retaliation, or constructive eviction — any of which may complicate or defeat the landlord's case.

What to check: Ensure your lease specifies a notice period that meets or exceeds your state's statutory requirement. Include language limiting non-emergency entry to reasonable hours. Reserve unrestricted entry only for genuine emergencies (fire, flooding, gas leaks).

The Common Thread

Each of these five clauses shares the same underlying problem: they attempt to give the landlord more rights than the law permits, and in doing so, they may create more risk than they prevent.

A lease is only as strong as its enforceability. A clause that looks protective on paper but conflicts with state law may be worse than having no clause at all — because it may signal overreach, undermine credibility, and create affirmative defenses for the tenant.

Check Your Lease for Compliance Risk

FlagMyLease analyzes lease agreements clause by clause against state-specific law. Upload your lease, select your state, and get a detailed report identifying provisions that may conflict with your jurisdiction's statutory framework.

It takes less than five minutes and costs $4.99. Knowing what is in your lease — and whether it holds up — is worth more than finding out in court.

Check your lease for compliance risk.