Ensure that your Rental Agreement is in writing

It may seem obvious, yet some landlords never issue a formal rental lease agreement. There is no way to show the conditions that you and your renter agreed to without a formal agreement.

A well-drafted rental agreement between you and any renter — even a friend or family member — may save you money and worry in the long run.

It also outlines explicitly what each party is required to do, so there is no space for interpretation. From payment due dates to which repairs are the tenant’s duty and which are yours, your lease should mention everything that may possibly become a problem later.

Because landlord-tenant regulations are continually changing, the information necessary in a lease may also change; understanding your state and local legislation is essential. Items that may change include your right of entrance (rules vary on how much notice you must provide first) and, if your state mandates it, a lead paint warning.

5 Tips for a top notch Rental Agreement

Provisions for Clear Payment and Security Deposit

The first month’s rent and security deposit are required under state legislation.

Some restrict the amount of security deposit or penalty fee that may be charged for late payment. It is critical that your rental agreement includes explicit conditions for all payment requirements, including:

➤ The rental payment deadline
➤ Payment frequency
➤ Payment method
➤ Payment location
➤ Late or missing payment penalties or fines
➤ Also, be explicit about your security deposit return policy, including what constitutes damage to the rental property

It’s a good idea to examine your tenants before signing the rental agreement to ensure they can truly pay you. Require all possible tenants to fill out a rental application, do background and credit checks, and verify references.

Failure to do so may result in a range of issues later on, including late rent payments and property damage. If you’re concerned about the cost of running credit checks, you can consider charging a modest application fee to offset the costs.

Clearly stated policies on subletting, pets, and other activities

Inform your renters on your policies about subletting, pets, and other unacceptable behavior. If everything is clearly out in a lease that the renter signs, he or she cannot subsequently claim ignorance of the regulations.

Other fees summary in your rental agreement

Include any additional costs or services for which the renter will be accountable. Are there any utility bills, connection fees, or other costs from you or third-party providers? As a courtesy, be extra careful to explain any costs that may not be immediately apparent to a tenant.

You don’t want to sour your connection with your tenant by withholding facts like parking fees or key deposits.

You should also consider maintenance—who is accountable for what sorts of maintenance and how much it costs.

Is it only an extra price, or would the renter be responsible for contracting with a provider?

Penalties for Lease breach or breach

1. What if the renter want to terminate the lease?

2. Will you make him or her pay rent until you locate a new tenant?

3. Are there any additional consequences for breaching the lease?

4. What happens if the renter violates the lease in some way?

5. Do you wish to keep the option to end the lease?

Draft a lease agreement to protect your rights as a landlord

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