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A lease agreement, also called a rental agreement, is a legal contract that sets down the rules for tenants. With a lease agreement in place, landlords and tenants will be able to maintain a positive rental relationship. Issues can be dealt with accordingly.
As a new landlord, you could be wondering... What rules should be present in a lease agreement? We'll be discussing them in today's post. Keep reading to find out which basic areas you need to cover in your lease agreement.
The details regarding the rent are extremely important. Be sure to specify the exact amount of rent as well as the day of the month it's due. What about the payment mode? Penalty fees for late payments? Will you provide a grace period? Spell out all the details.
A security deposit clause should always be present in the lease agreement. In case you don't know what a security deposit is and what it's used for, it's the amount of money that tenants give you on top of their advance rental payment. It will serve as insurance if a tenant violates the terms on the lease. Your security deposit clause should specify the security deposit amount, how you're going to store it, the interest rate, and reasons for you to keep it (instead of returning it to the tenant).
One of the worst things that could happen is your tenant accusing you of illegal entry or violation of privacy. So, to avoid disagreements with your tenants, mention the circumstances in which you can enter the rental. Legal reasons include repairs and improvements and emergency situations. You may also enter for as long as you have your renter's permission. However, please keep in mind that frequent visits are not necessary.
Read more: 8 Legal Reasons a Landlord Can Enter an Apartment
It is a fact that 85 million families in the United States own a pet. If you decide that you're going to be a pet-friendly rental, make sure to define the pets that are allowed (dog, cat, hamster, etc), the number of pets allowed, and requirements on height and weight. Mention the renter's responsibilities pertaining to the pet. Are they responsible for cleaning up their pet's mess? What about possible damages?
Read more: Renting to Tenants with Pets: Tips to Follow
Tenants have a responsibility to keep the rental property in good condition. Whatever you expect your tenants to do, you need to spell them out in the agreement. Tackle areas such as garbage disposal, building and house codes, and damages and repairs.
You and your tenant should sign the lease to make it legal. Also, both of you must have a copy of the lease. If you need professional help, don't hesitate to work with a real estate lawyer. Looking for a ready-made template? Landlord Prep has all the resources you need to get started in landlording. Check out our templates-only packages.
If you’re ready, make Landlord Prep your go-to resource for landlording education. Here, we offer a complete DIY landlording course to get you on the right track. Join our academy today. If you want, you can check out Flavia’s real estate investing webinar first!