What is the National Apartment Association
The National Apartment Association (NAA) is a national advocate for the multifamily rental housing industry, representing over 50,000 members of the affiliated state and local apartment associations. Formed in 1917, it is the largest national organization representing owners, operators and suppliers of rental homes and apartments and is headquartered in Washington D.C. The NAA has influence in all 50 states, sheltering 9.25 million apartment homes. The overall economic impact of the apartment industry on the U.S. economy is of 1.3 trillion dollars annually.
As a direct influence, the NAA created the National Apartment Association Lease Contract (commonly referred to as NAAlaw, NAA Lease Contract or NAA Apartment Lease Contract) . The NAAlaw various forms have influenced the form, content and structure of virtually every apartment lease in the United States. Over the years, the NAAlaw has been routinely cited in U.S. Supreme Court decisions and various other federal and state court opinions.
The NAAlaw is viewed as the largest lease form in use in the world. Yet, it is not the lone apartment lease issued in the United States. Because most states have small variations on the apartment lease, the NAA has created numerous variations for members in good standing to use in those states. A majority of states do utilize the standard version, however.
NAA Lease Contract Overview
For over 20 years, the National Apartment Association Lease Contract (NAA Lease) has served as a uniform residential lease of choice for thousands of owners and managers of apartment buildings, condominiums, homeowner associations, and single family houses across the United States. From Alabama to Washington, the NAA Lease is utilized by every person who rents, leases or contracts for a residential apartment. In fact, more than two million copies of the NAA Lease have been purchased in full written form throughout the country.
Pursuant to a national study compiled by the National Multi Housing Council and the National Apartment Association, the NAA Lease is used for approximately 70% of the apartment units in portfolio communities. Simply put, the NAA Lease is the most popular written residential lease in the United States. The NAA Lease was developed to meet the needs of apartment communities both large and small, as well as single family landlord/tenant relations. The NAA Lease has more than 120 preprinted provisions on five pages. And, yes, it has small print. While the provisions are carefully drafted for your protection, they are still designed to be understood by the layperson.
Key Provisions of the NAA Lease Contract
As with any lease agreement, there are some specifics that would commonly be found in an NAA lease contract. One of the first would be clauses or terms pertaining to rent. This would typically include a due date for each rent payment, terms if the payment is not made on time, where and how the rent should be made and whether or not a late fee is charged. Tenant responsibilities would normally be outlined in several clauses in the lease. This would include what the tenant is responsible for during the lease term, such as keeping the apartment in clean order, mowing the lawn or not smoking on the premises. Any clause regarding damages would also be found here, as well as any statements about having guests stay in the apartment for an extended amount of time. Landlord obligations would be spelled out in a similar fashion, including information on when or under what circumstances the landlord would have the right to enter the apartment, such as for maintenance, inspection or the sale of the unit, should that ever become necessary. The appropriate handling of emergencies would typically fall under the landlord obligations as well. Renewal or termination terms are another key aspect to a National Apartment Association lease contract. This would go beyond the normal termination clauses for terminating the existing lease to include all of the various ways a lease could be either renewed or terminated, such as automatic renewal, pet fees and deposit returns.
Advantages of the NAA Lease Contract
An effective lease contract should be uniform, clear, and concise. A properly written lease will benefit both the landlord and the apartment residents. The National Apartment Association lease contract achieves this through standardized yet customizable form contracts, which vary by state, allowing landlords to choose from a variety of terms, conditions, and customizations for special circumstances. The contracts contain provisions that are fair to both the landlord and resident. In the event of a dispute relating to the contract, both residents and landlords are protected. By using a standardized lease contract, apartment association members can avoid lengthy disputes, unnecessary litigation costs, and increased turnover rates.
How to Get the NAA Lease Contract
The National Apartment Association (NAA) has made its lease contract available for a limited time for non-members to review and compare it with the provision in its state or local association’s lease contract. A non-member may download and print only one copy of the lease contract. The non-member cannot participate in any links of the contract until membership is obtained . After membership is obtained, upon signing-in as a member, the member can print copies of the lease contract. The NAA lease contract is NOT FOR USE WITHOUT BECOMING A MEMBER OF THE NAA. Membership in the NAA is open to a company listing in the NAA membership directory. Membership in a state or local apartment association is NOT required for NAA membership.
Customizing the NAA Lease Contract
The NAA allows you to take the National Apartment Association lease contract and modify it to fit the particular state law or property requirements that the parties need. You must still maintain the same provisions that fell under the federal rental laws (e.g., the military provisions under the Servicemembers Civil Relief Act). In addition, you can only modify the printed text for: fair housing laws, state security deposit laws, pet policies, and material non-compliance provisions. However, when these fair housing, state security deposit, pet, and material non-compliance provisions are modified, they must be done in conjunction with the local laws regarding these areas in order to be compliant with the local law.
Do Not Modify for Clarity: While it is permissible to use the NAA lease contract that the parties all sign, it is not permissible to modify this form simply for clarification purposes. For instance, it is not a good idea to try to clarify who exactly is going to install the window treatments in an apartment by modifying the NAA lease language on that issue. You do not want your intention on an issue to be confused as being adjacent to a rent payment. Do not remove, delete, substitute language, or change any of the 750 words preceding blank lines in the NAA lease contract without consulting legal counsel.
Legal Implications of NAA Lease Contracts
When utilizing a National Apartment Association lease contract (the "NAA Lease Contract"), it is important to consider the legal pitfalls associated with it and the amendments. For example, the NAA Lease Contract is general in nature in some of its provisions. While this gives good flexibility, it can also raise red flags among attorneys, which are incredibly interested in what the standard provisions are and do not want any surprises. The disadvantage with using a form like the NAA Lease Contract is that it is often too broad, unlike a custom lease with specific provisions for each individual property.
While a real estate attorney can cost a fair amount of money, this investment can minimize future disputes and liability. Attorney Magnus Schaefer, in a recent article for The Apartment Journal, draws attention to a 2018 lawsuit that "illustrates a common issue created when property owners do not have a well-drafted lease agreement and corresponding policies and procedures." The lawsuit stemmed from a failed rental application, and because of the lack of detail in the lease contract, the apartment owner allowed a $200 application fee to be called an "administrative fee." This resulted in the owner being forced to pay damages to the applicant’s attorney fees and costs.
In a recent subscriber-only newsletter for the Apartment Association of Greater Los Angeles, they also cautioned against using general forms for apartment leases, especially if they do not conform to California law. Specifically, they cite to a case from 1967 which says that an apartment complex was denied recovery of lost rent from a tenant because its lease did not comply with the Six Month War Emergency Act, a lease for a period of six months or longer must contain a statement that the tenant shall have a right of possession and such rights as may be prescribed by the state laws.
It is not enough to simply use a NAA Lease Contract provided by your local Apartment Association. These leases often need modifications before being used, especially if you allow modifications. For example, it is best practice, in certain areas of California, to state openly in the lease that the tenants may have to abide by the resident handbook and any additional statements of the community rules. Otherwise, tenants may claim that you informally changed the rules without having an impact on the lease.
Your resident handbook itself may also violate federal or state law regarding security deposits, early termination, nonpayment of rent, and other rules. It is worth it to have your handbook reviewed by a knowledgeable attorney.
The NAA Lease Contract conforms to federal fair housing law (the Fair Housing Amendments Act and the Fair Housing Act) and aligns with many state laws, but you still need to look after yourself.
Commonly Asked Questions
Frequently Asked Questions about the National Apartment Association Lease Contract
I am a landlord of several apartment complexes. I am thinking about using the National Apartment Association lease contract. However, I hear that it is not enforceable in Arizona. Is that true?
No. Arizona courts routinely enforce the NAA lease contract. If you are a multi-family owner or operator, the NAA lease contract is the ideal lease for apartment projects. In addition to providing the highly desired brochure to your residents, the terms contained in this lease contract can be modified (added to or subtracted from) when used to enter into a lease with a new resident at your complex.
For example, owners and operators frequently use A.R.S. §§ 33-1314 to 1314.10 to attach rules and regulations to the lease contract. A.R.S. § 33-1314 . These Rules and Regulations generally include: (a) use of pools, jacuzzis, laundry and fitness rooms and the prohibition against making extra keys; (b) the prohibition against smoking cigars, cigarettes and pipe tobacco in common areas; and (c) the obligation to dispose of trash and to keep patios, balconies and yards neat and clean.
I am a tenant. I have heard that I can insert language within the prescribed sections of the lease contract. Is that true?
No. Any changes that you are contemplating to add to the prescribed sections of the lease contract can only be made to the approved "Special Stipulations" section of the lease contract. Substantive changes to the prescribed area of the lease created by the National Apartment Association are considered modifications of the lease contract that will not be enforceable. Of course, a tenant may request and/or offer to pay more rent to implement a newly desired term. However, if the landlord includes any modifications and the tenant does not, the entire modification will be unenforceable.