A lease can be drafted by a knowledgeable property manager, or you can write it up by yourself. But if you’re new to being a landlord, it can be difficult to write up such an important document alone.
When you write up your lease agreement, there are many details to consider, including state laws and local policies that you may need to adhere to when it comes to the lease. By hiring a property manager, you can cut down on a lot of time and energy that you would normally spend researching.
As a landlord, having a solid lease agreement is critical to running a successful and secure rental property. So, if you’ve ever wondered how to craft a solid lease agreement, then you’re in luck!
In this blog post, we at MN Property Nerds will guide you through everything you need to know about writing up a strong lease agreement.
By creating a solid lease agreement, you can save time and improve communication with your tenant by answering common questions that they may have. Also reducing the likelihood of your tenants breaking any property policies that you may have put in place.
If you simply have an oral agreement regarding the rental home, it can easily be forgotten or misinterpreted.
Using an oral agreement for your property can also have difficult legal consequences. So, by creating a written lease agreement, you are providing yourself and your tenant with legal protection should there be any disputes regarding the conditions of the lease.
An oral agreement does not provide you with any proof in court should you encounter a legal dispute with your tenant. Ultimately, having a written lease agreement will help you prevent minor conflicts from becoming messy court battles.
While a lease agreement, no matter if it’s short-term or long-term, may have its own specific clauses that are unique to your property, there are some basics that all agreements should include.
This includes the names of everyone involved with the rental home and the property’s address.
The legal names of both the landlord and the tenants should be present on the lease agreement. The rental property’s name and address should also be included. Make sure to include specific details of the address, including the unit number if the property is a multifamily home or an apartment complex.
To ensure that your tenants understand their obligations regarding rent, make sure to include the specific date that the rent payments will be due and the frequency you expect the payments (weekly, monthly, etc.).
In addition to when you can expect your rent payments every month, you should also clearly state how much the tenant will owe in rent. This should be stated in both numbers and words. If you require any separate fees like security or pet deposits, these should also be included in detail.
Make sure to include the exact duration of your lease agreement, including the specific start and end dates. If you simply state that the lease is for one year, your tenants can find a loophole in the contract in the event of a legal dispute regarding your renter overstaying their tenancy.
Most importantly, both the landlord and the tenants should sign the lease agreement. This solidifies the agreement and indicates that both parties clearly understand their responsibilities in regard to the rental home.
While each rental property has its own set of policies that are dependent on your decisions as a landlord, there are some clauses you should include in every lease agreement.
Taking your state’s local landlord-tenant laws into consideration, here are some things that are important to note in your lease:
Subletting is when you allow your tenants to take in other occupants to share the cost of the rent. So, if you want to have control when it comes to the occupants of your rental property, then you should decide on your subletting policy.
If you are comfortable with allowing subletting in your rental home, then you can include a clause in the lease that allows the tenant to do so only with your written approval.
Here, you should also make your pet policy clear as you will want to know exactly who will be staying within your property at all times.
As a landlord, you must respect a tenant’s right to privacy. Not only is this crucial in order to maintain a positive relationship with your renters, but it is also required in order to avoid legal issues with tenants.
That is why you should always define the specific conditions that would grant you access to the rental home as the landlord. Most states will already have a rule regarding landlord entry, so it’s important to be aware of your local laws. If your state does not have a specific notice time required for landlords to enter the property, then you should state one in the lease agreement.
Landlord-tenant laws in every state require landlords to ensure that their rental home is habitable for their tenants. Similarly, tenants have their own obligations to fulfill. You can include these responsibilities in the lease to ensure that they are clearly understood by your renters. This includes what happens if a tenant damages the property.
There are some situations where a tenant may justifiably break the lease early without penalty. If you decide to allow your tenant to break their lease for any reason not defined by your state’s law, like relocation for a job or to be closer to family, then this should be mentioned in the lease.
In the lease, you should inform your tenants where their security deposit funds will be stored, and whether it will be held in an interest-bearing account. To avoid future legal issues, you should also outline the refund process in detail.
At the end of the day, creating a solid lease agreement is essential to having a successful rental property and preventing conflicts.
If you need help writing up a strong lease agreement or have questions about any other aspect of your rental property, contact our knowledgeable team of property managers here at MN Property Nerds.