A well-written rental agreement can boost your success as a landlord and function as a communication tool between you and your tenants. Rental property lease agreements are a guideline for both parties that could be used if there is disagreement. A proper lease prevents problems from arising in the first place.
Many landlords, however, aren't exactly sure how to write a proper lease agreement. Here are five suggestions for writing a better lease that will save time, money, and potential legal hassles.
1. Determine the Property and Parties Involved
The fundamental thing in every lease agreement is to clarify the basic information of both parties. Here is what should be included:
- Tenant's and landlord's complete names;
- Full address of the rental property and the landlord's full postal address;
- The rental property's name, if it has one, or its complete postal address when used to identify it. If the rented property is an apartment, make sure to provide the correct unit number.
Related: 2022 Rental Property Lease Trends That Landords Should Know About
2. Lease Period and Rent Payments
Use accurate dates when mentioning the terms of the lease agreement. Declare the start and end dates of the lease, including the day, month, and year. Avoid using unclear phrasing like "this lease is for one year," as this might lead to uncertainty, especially if the lease isn't for exactly a year. Double-check local laws for better understanding to be sure to write a valid lease agreement.
It is essential to determine the total rent paid and the amount due every month. Write down the total and monthly rent amounts in dollars. Include the due date for the tenant's rent payment each month. Rental agreement disputes are common, and the best approach to minimize them is to include wording that is as direct as possible.
Related: Free Standard Residential Lease Agreement: Top 5 Suggestions That Will Save Your Time
3. Specify Terms and Conditions
It's a good idea to add individual terms and conditions once you've written the essential elements of the lease agreement. These conditions will protect landlords against concerns that aren't written in the standard lease agreement. Here are a few common lease clauses:
Security Deposit Clause - we recommend requiring tenants to pay a security deposit before moving into a rental property. This condition safeguards the landlord if the tenants fail to pay rent or cause damage to the property. This deposit is entirely refunded to tenants when the lease period is over as long as the terms have been upheld.
Security Deposit Acknowledgement Document - this form confirms that the tenant's security deposit has been received. Landlords must indicate on this form where the deposit is stored as well as the account's interest rate. After the landlords receive the security deposit, the tenants should receive a copy of this agreement within 30 days.
Pet Policy Clause - specify whether or not tenants are permitted to have any pets on the property. Clearly define pet guidelines, such as the types of pets allowed, the amount, and the maximum weight of the pets. Include the fines that tenants must pay if their pet(s) causes any property damage, as well as what is expected by the pet(s) and pet owner. Finally, mention any potential consequences of not adhering to the guidelines.
4. Update Your Lease Agreement Often
Landlords should consider revising the terms and language of their lease every time they renew with an existing tenant or sign with new tenants. The most up-to-date rental leases are best.
For example - rental terms, rent price, terms, and conditions.
Related: Upgrade Your Rental Business With TenantCloud: 5 Surefire Ways to Choose
5. Use a Digitally Signed Online Lease
It's crucial to think about how your lease is produced, presented, saved, and signed in addition to the content.
Using online leases benefits both landlords and tenants. The following are five compelling reasons to form online leases:
- On the internet, customization is a lot simpler. Simply add, remove, swap, and adjust your own rules and clauses instead of continually examining and printing legal papers with a lawyer.
- Both parties can have access to the leases at any time. Both you and your tenant will appreciate the transparency.
- Online leases are saved and backed up securely. No one can claim to have misplaced their copy of the lease.
- It is easier to sign a lease online. Instead of repeatedly emailing and faxing your lease, simply send it to a tenant's inbox, signed and ready to be signed. There will be no drop-off or pick-up of hard copies.
- Written signatures are more secure and enforceable than digital signatures.
