7 Basics to be Taken Care of While Drafting a Lease Agreement
So finally you found someone that made the grade as a good tenant after a thorough tenant credit check. Tenant credit report and tenant screening are great tools to separate the sheep from goats. Sometimes, however, especially when your screening process is not foolproof, goats will dress like sheep to fool you. So for your added protection, you will need to draw up a lease agreement. This legal document is one of the vital tools every landlord should use to legally protect his property from problem tenants. Besides, it is required by law. Put this tool to good use by properly and clearly drafting it so that bad tenants cannot easily break free from their responsibilities through loopholes. Make sure to cover all bases. Here are 7 important points that should not be missing in the contract.
1. Length of Lease
One of the things you will have to agree with your new tenant and indicate on the contract is how long he or she will be occupying the property. It would be great to put into writing that the original agreement will automatically renew after the first rental period has elapsed, subsequently continuing on a monthly basis. Don’t forget to make provisions for rent increase after a given period.
2. Monthly Rent and Deposits
State in black and white how much monthly rental the tenant needs to pay and when it is due. Also spell out when it is considered late and the consequences of a late payment, such as late charges. Make sure to look into rental property laws in your state before charging late fees. Have these details in the lease agreement to avoid misunderstandings and to provide you a legal option in the event that the tenant continues to fall behind in payments. Even if a tenant passed the landlord credit check, it does not mean that he cannot be delinquent in payments.
3. Security Deposits
Indicate in the agreement the amount of security deposit you initially require. Also clearly state what will happen to the amount should your property be damaged. Be clear with what you consider as “damage”.
4. Repairs that you will and will not cover
It is every landlord’s duty to have broken fixtures, heating and cooling equipment, and included appliances fixed. However, keep in mind that you do not have to shoulder all repairs. The tenant is also responsible for certain maintenance, so spell this out in the contract. For your protection, indicate in the agreement that the tenant should take responsibility for repairs needed because of his or her lack of proper care of the property or his wrongful acts.
5. What you allow and disallow
Credit check for landlords will not give you a clue as to whether or not your tenant will behave improperly. So you may need to set a code of conduct especially if your target market is college students. If so, incorporate this in the lease agreement to make it clear to them what they cannot do. An example of this is disallowing loud music or pets in the property.
6. Consequences of breaching lease agreement
Spell out what will happen if the tenant violates the agreement. For instance, if the tenant falls behind in payments, or disobeys the code of conduct, you can put across that you as the landlord can rightfully terminate the lease and evict the tenant.
7. Right of entry
You can also specify in the contract the amount of time you need to notify your tenant so that you can enter the property. This will vary from state to state, but it is usually 24 hours. Some states, however, require 48 to 72 hours notice. Make sure that what you state is in accordance to your state’s laws.
There could be more points to cover depending on your specific requirements and the kind of rental property. Before signing on the dotted line, make sure to consult a lawyer who is an expert in landlord/tenant law. He may have additional insights for your particular situation.
Processing your request, Please wait....
