Every landlord wants to have their rental properties occupied by the best tenants, and all of that only starts happening when you give them a rental agreement outlining your expectations. A basic agreement defines the obligations of both parties as well as the duties you are held to, in maintaining the property as the landlord.
The agreement is also a crucial step towards leasing or renting out the property either for private or commercial use since it binds both parties to the responsibilities they have committed to. It also protects you from a string of nasty surprises that tenants can throw your way, from late or missed rent to property damage. Here are most important elements the agreement should include:
1. Names of Tenants: Write down the name of all tenants who will be occupying the property because these are the only people that will be recognized as tenants, which means they’re the ones bounded to the terms of the lease. You need to make sure that you’ve got the names of the tenants who are part of the lease before you give them the keys, or allow them entry to the building.
2. Lease Term: What is the duration of the lease? How long is it good for? As a general rule, in a college town or community, a lease term is good for a year. This gives the landlord a chance to bind tenants in for a full year contract which includes summer. However, it gives you an opportunity to raise the rent each year. You just have to state the specific start and end date of the lease or rental agreement, which also applies to month-to-month leases.
3. Payment Information: This section of a rental agreement gives all the details on how much rent is due and when, and the consequences if the tenant doesn’t pay. You’ll want to include the following information:
If you’re renting out one of your properties, you really need a written lease or agreement to establish tenant-landlord relationship and have it on record. You may want to add any rules or conditions of allowing a tenant to rent your property, subject to local landlord and tenant law. Here are the steps to help you get started:
1. Write the parties to the agreement: When you’re done with the property description which is the subject of your lease, provide your name and the name of the person or people you’re renting the property to. If this is part of a rental business or corporation, LLC or any other business organization, you have to state the business name instead of your own, for legal purposes. If you’re creating a form that you intend to use multiple times, you can leave a blank for the names and fill them in later depending on the circumstances.
2. Outline the provisions: Take the time to write and come up with a list of key issues you want your agreement to address. This makes it easier for you to organize them under section headings if you’re neither customizing nor editing an apartment agreement template from the internet such as the ones we have attached in this article. If you think your section headings aren’t quite enough, you can add new ones for additional provisions.
3. Detail responsibilities: Provide information for each tenant’s as well as the landlord’s responsibilities. This should be clearly defined and detailed especially when it comes to whom and when repairs are to be reported and who gets to pay for them, when these repairs should be made, lawn maintenance and building requirements for areas that has to follow code-specific inspections as well as garbage disposal.
4. Leave space for signatures: Add space for signatures at the end of the article and have your tenant sign it after you, to make it legally binding and enforceable. It’s okay for you not to add additional witnesses and in most cases, you don’t have to sign your agreement in front of a notary.
Your jurisdiction may be limited to having laws specifying a minimum term for both residential agreements and commercial leases. What’s important is that you stick with your state regulations. Here are some tips to guide you further:
Most states allows a landlord to hold a deposit of up to a month and a half month’s rent to serve as security just in case there are damages to the property or bills left unpaid. Indicate the amount you require for the deposit and the name of the individual the deposit will be returned to. Then clearly state what happens with the interest earned for the deposit made.
Your rental agreement and the property being rented itself, must comply with applicable local and state regulations. Aside from national laws, there might be local or city ordinances depending on the property’s location.
If an important provision, such as the amount of the rent, is unenforceable, it may render the entire lease illegal and unenforceable. Pay particular attention to laws governing deposits, your responsibilities as a landlord, and the amount of rent you can charge. Month to month rental agreements are pretty common but they need to be put in writing for them to be enforceable. Having a rental agreement is vital for both landlord and tenant as it protects your property and sets the record straight for both parties’ obligations, preventing disputes and future misunderstandings.