Both of you and your tenant should have to agree with the rental agreements before you hand over the keys to your property. Rental lease agreements are one of the most significant documents in your rental business, and it can help to avoid conflicts and headaches when you have done it through a thorough, specific lease agreement. If all of your requirements are outlined, you can refer to the agreement when issues occur. One of the most prevalent landlord errors is that they are not specifying all of the rental requirements and expectations. Landlords tend to just use the standard type of rental agreement contract, but if you wish to make it your own you can make your draft with the help of your attorney.
What are Rental Agreements?
Rental agreements set out the basic rules that both landlords and tenants agree to follow all throughout their rental relationship. It is a legally binding agreement, and also an extremely useful document complete of all the important renting details.
Rental Agreements: What should be included?
Here are the much-needed details of your lease agreement that you should include when negotiating with your prospective tenant:
Basic information (Landlord and Tenant’s details)
You could start off with both yours and the tenant personal details, contact details as well as the address of the property. Clearly state the duration of the lease and conditions, depending on what is allowed under your local laws, which could be month-to-month beginning with a particular end date or automatically ongoing lease. Also outline the implications if the tenant would leave the property prior to the lease expiration.
In addition, rental agreements should always include the monthly cost of rent. Provide the exact amount and be specific about when to pay the rent and the forms of payment you will accept. Make sure also to indicate how many days you will allow for the grace period and when the rental payment is considered late.
How much security deposit is required
You might want to require the tenant to pay a security deposit that is the same with a month’s rent or more, depending on the situation and what is allowed by local law. When assessing the security deposit, you may consider the importance of the furnishings and future cost of repair. Provide the amount of the security deposit in your lease agreement, when it is due and under what conditions it can be withheld when the tenant moves out.
Some places require the landlord to put the security deposit of the tenant in a different interest-bearing account and return the deposit plus the interest to the tenant at the end of the lease, minus any damages. You have to make sure that you know your laws and regulations in your area. Work with a competent local attorney to arrange your rental lease agreements to guarantee that it is legal to prevent any problems after your tenant moves out so that you can save time and money on the long run.
Details of the other tenants (if more than one or a family)
It may seem apparent that you already know who is going to live in your rental proper, but most often than not, you mostly only talk with the primary leaseholder and you may not have an idea about future plans for other roommates or visitors to join with them. If family members, roommates or kids are going to live in the unit, specifically name each one of them as a part of the rental agreements, even if they are not the ones who is paying the rent or not included in your tenant screening process. This is so that you will know how many people who are going to live there.
1. Sublet letters
At some stage, most landlords have a tenant who wishes a friend or stranger to sublet the apartment, so you have to indicate on your lease agreement whether subletters are permitted.
Make sure that in your agreement it will be stated that the tenant must have your written approval before handing over the rented property to someone else. Thus allowing you to decide whether you are allowing or denying the subletting of the property to another person.
However, it would still be more preferable if you just to start from scratch with the new tenant and end the lease to the previous tenant. With the new tenant and with its new security deposit and lease, you must do entire background checking again. It can be difficult to try to implement your previous lease contract with the previous tenant to the new tenant (subletter) who was not a party to the lease agreement thus making it more risky for your investment.
2. Long-term Guests
The personal life situation of a tenant may change. Eventually, you may have an additional person living at your property, whether it is significant other or a sibling. More people in the unit will mean more wear and tear, higher utility bills, and more possibilities of dispute if there are damages.
Specify your long-term guest policy in your rental property. You can clearly state how many consecutive nights a visitor can stay at the property and/or how many total nights in a 6 or 12-month period.
Nearly half of renters have pets – most common are dogs. If you choose to accept pets in your rental property then you must clearly state a pet policy as part of your rental agreement or include a different pet agreement to safeguard your property from any future damage from the pets. On the other hand, if you do not accept pets, you must state clearly in your contract that they will be violating the lease agreement if they get a pet without asking first for your approval.
Proper usage or how to manage your property
Your contract should indicate that tenants must maintain the property in a good condition, abide by the rules regarding noise control and to never change the locks without your written permission. Identify and note the condition of the equipment and any other furniture that is included in the lease. Include any other special conditions or regulations and exceptions that are specific to your property, such as parking policies or common spaces.
Moreover, each utility such as trash, sewer, water, electricity, gas, telephone should be listed down and the one who is accountable for the payment of the utility should be indicated in the rental lease agreement.
Most landlords include the “no smoking” policy in the lease agreement. As a landlord, you should be very clear about what it covers. For instance, you should specify whether smoking or vaping outside the unit is allowed and how far away from the unit is smoking allowed.
Additionally, you are required to inform your tenants if there are any defects in the rental property that you know about. Before the tenant moves in, it is advisable to let the tenant know of any defect in the rental property. However, it would be much better if you repair or fix any defect before the tenant will move in.
Rules on the termination of the lease
It would be best if you know the rules of your state with regards to the termination of a lease and include all necessary details in your rental agreements so that your tenant will not be flabbergasted when the time comes to end the lease. If the lease is coming to an end, you must ask your tenant if they want to renew or move out when the lease expires.
Note that when the tenant is evicted then the lease agreement will also be terminated. Eviction has a very particular process, starting with the documentation and notification of late or missed rent payments or lease violations to the tenant. The first order of business in defending your investment is to have clear policies for your expectations to your tenants that is needed to be specified in the rental lease agreement which should also comply with your local laws.
2. Moving out time
In rental agreements, a move-out time or your next tenant’s move-in time can also be included. This would be just like in a hotel where there is a check-in and check-out time. If there is no specified time on when the tenant should move out, he or she would probably think that they have until midnight at the last day of the lease expiration to vacate. This might leave you scrambling to check the rental property and make any needed repairs before the next tenant moves in.
3. Personal belongings that are left behind
There are some tenants who leave any of their personal items behind after moving out. There are a number of states who will consider it is as an abandoned property thereby permitting the landlord to dispose of it. However, landlords are required to keep the tenant’s personal belonging for a certain amount of time and give due notice to the tenant.
Keep in mind to never let your rental lease agreements be open to any kind of interpretation. The lease agreement should be specific and thorough. Include all the relevant information in your rental agreements to avoid any misunderstanding with your tenants and have a harmonious landlord-tenant relationship with them.