What Is an Attorneys' Fees Clause in a Lease?
The rule
The default rule in US courts (called the "American Rule") is that each party pays its own attorneys' fees, regardless of who wins. The losing side doesn't have to cover the winner's legal bills unless a statute or contract specifically says so.
An attorneys' fees clause in a lease is the contractual override. It says: if there's a lawsuit over this lease, the losing party pays the winner's reasonable attorneys' fees and costs.
The standard residential version is one-sided. Most leases drafted by landlord-side counsel say the tenant pays the landlord's fees if the landlord wins — without the reciprocal right for the tenant. The aggressive version goes even further, requiring the tenant to pay the landlord's fees even if the landlord brings a meritless suit and loses.
Where this gets interesting is that a number of states have decided this one-sidedness is unfair and have automatically converted it into a bilateral clause. California's Civ. Code §1717 is the leading example.
How reciprocity statutes work
California's §1717 reads, in essence: any clause providing for attorneys' fees to one party in a contract dispute is automatically reciprocal. If the lease says the landlord can recover fees, the tenant has the same right when they prevail. The reciprocity is automatic — it doesn't require the parties to have agreed to it, and it can't be contracted around.
Several other states have similar provisions:
- Massachusetts (M.G.L. c. 186 §20): reciprocity for residential leases.
- New York: Real Property Law §234 — reciprocity in residential leases for attorneys' fees in summary holdover proceedings.
- Florida, Washington, and various others: judicial doctrine of reciprocity for one-way fees clauses, especially in consumer contexts.
In states without reciprocity statutes — which is still the majority — a one-way fees clause is enforceable as written. The tenant is potentially on the hook for the landlord's fees if they lose, with no corresponding right if they win. That's the more dangerous version of the clause.
The economic effect
The presence of a fees clause changes the economics of small disputes:
Without a fees clause: each side absorbs their own legal cost. A tenant disputing a $2,000 deposit might pay $3,000 to litigate. Even if they win, they're out money. Result: most small disputes don't get litigated — tenants give up, landlords keep the deposit.
With a fees clause (reciprocity): a tenant who wins recovers their fees. The $2,000 deposit dispute becomes economically viable to litigate. Landlords settle more quickly because the downside includes the tenant's attorney costs.
With a fees clause (one-way landlord-favored, no reciprocity): tenants are even more risk-averse. The downside of losing — paying both sides' fees — outweighs the upside of recovering a smaller deposit. Result: even valid tenant claims may not get pursued.
This is why the difference between reciprocity and non-reciprocity states matters. The same clause has very different effects depending on where you are.
Red flag clause language
The most aggressive attorneys' fees clauses go beyond the standard one-way version:
"In the event of any dispute arising under or relating to this Lease, Tenant shall pay all costs and expenses incurred by Landlord, including reasonable attorneys' fees, court costs, and collection costs, regardless of whether litigation is filed, whether Landlord prevails, and whether the dispute is resolved by judgment, settlement, or otherwise. Tenant waives any right to recover attorneys' fees from Landlord under any circumstance."
Three layers of problem: (1) the tenant pays even if the landlord doesn't prevail, which converts the clause from a fee-shifting provision into a one-sided indemnification, (2) the clause applies "regardless of whether litigation is filed," which sweeps in pre-lawsuit costs the tenant has no control over, and (3) the express waiver of the tenant's right to fees attempts to contract around state reciprocity statutes. In California and Massachusetts, the waiver is automatically void; in other states, courts often strike it on public-policy grounds.
A clause that's actually balanced:
"If any legal action is brought to enforce or interpret this Lease, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs from the non-prevailing party."
That's bilateral, applies only when a lawsuit is actually filed, and only when someone actually prevails.
What this clause does for you
If you're in a reciprocity state, an attorneys' fees clause is actually pro-tenant in most disputes:
- Security deposit cases: The economics work in your favor. Lawyers will take winning deposit cases on contingency because they know the fees are recoverable.
- Habitability and repair cases: Same logic. The downside risk to the landlord of refusing to make repairs is much larger when the tenant's lawyer fees are recoverable.
- Wrongful eviction: One of the most expensive types of litigation for a landlord to lose, particularly in fee-shifting states.
If you're in a non-reciprocity state with a one-way clause, the math is worse. The tenant bears more risk. The general rule is: in those states, tenants are smart to use the lease's existence of the clause as a negotiation point at signing — "make this bilateral or remove it."
What to do at signing
Three concrete moves:
- Read the clause carefully. Is it one-way or bilateral? Does it apply only when litigation is filed, or "in the event of any dispute"? Does it limit fees to those a court awards as reasonable, or include "all costs incurred"?
- In non-reciprocity states, push for bilateral language. Many landlords accept this. The standard version is bilateral; the one-way version is more aggressive.
- Watch for waiver language. A clause that explicitly waives the tenant's right to fees is a red flag. Either negotiate it out or, if you're in a reciprocity state, know that it's unenforceable.
What to do after a dispute
If you're already in a dispute and the clause is being invoked:
- Determine whether you're in a reciprocity state. If you are, the clause is bilateral regardless of how it reads.
- Document carefully. Fee-recovery requires you to show that your fees were reasonable and necessary. Keep records of all communications, time spent, and costs incurred.
- Use it in settlement negotiation. If you have a strong case in a reciprocity state, the landlord's exposure to your fees is a settlement lever.
- Talk to a tenant attorney about contingency. In fee-shifting states with strong tenant claims, many attorneys take cases for a percentage plus statutory fees — meaning you don't pay out-of-pocket.
The bigger picture
Attorneys' fees clauses are one of the rare parts of a residential lease where the law has actively pushed back against one-sided drafting. Reciprocity statutes exist in part because of recognition that one-way fee clauses produce systematically unfair outcomes — they discourage valid tenant claims while emboldening landlord overreach. If you're a tenant in a reciprocity state, the math of every dispute leans more in your favor than it appears on the page.
Frequently asked questions
If the lease says the landlord can recover attorneys' fees if I lose, can I recover if I win?
In many states, yes — even if the lease doesn't say so. California (Civ. Code §1717) and several other states have reciprocity statutes that automatically convert one-way attorneys' fees clauses into bilateral ones. So a landlord-favoring clause gives the tenant the same protection. In states without those statutes, you'd be bound by the lease's terms as written, which is why this kind of clause is more dangerous for tenants in non-reciprocity states.
What's the practical effect of a fees clause being in the lease?
It changes the math of every dispute. Without a fees clause, each side pays their own lawyer regardless of outcome — which often discourages small disputes because the legal cost exceeds the disputed amount. With a fees clause, the stakes are higher: if you win, you collect your fees; if you lose, you owe both sides'. That cuts both ways. It encourages valid claims (because winning recovers costs) and discourages risky ones (because losing is more expensive).
Can I waive the attorneys' fees clause?
In states with reciprocity statutes, the tenant's right to fees can't be waived by contract — it's a statutory protection. In states without those statutes, parties can in theory waive fees provisions, but courts disfavor pre-dispute waivers in residential leases and they're often struck on public-policy grounds.
What does 'prevailing party' mean?
It's the party that wins the lawsuit — usually the one that gets the judgment in their favor. Courts have a lot of flexibility in defining 'prevailing party' when the result is mixed. Winning on the central issue is usually enough, even if you lose on a minor counterclaim. Settlements complicate this — most settlement agreements address fees explicitly, but if they don't, courts have to decide who prevailed.
Do attorneys' fees clauses apply to security-deposit disputes?
Often, yes — and this is where they matter most for ordinary tenants. A typical security-deposit dispute is $500 to $3,000. Hiring a lawyer to recover that costs more than the dispute is worth, which is why most tenants don't pursue them. An attorneys' fees clause changes that calculation: if you win, the landlord pays your lawyer, making the case economically viable. This is one reason landlords sometimes settle deposit disputes quickly when a lawyer's involved.
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This guide is general information, not legal advice. Tenant law varies by jurisdiction and changes over time. For high-stakes situations — disputes, evictions, illegal lockouts — talk to a licensed tenant attorney where you live. Published May 28, 2026.