Your residential lease agreement is the most important document relating to your rental property business. This is the document on which everything else hinges. If your residential lease agreement is not properly handled, it can spell significant trouble down the road. For instance, if you do not spell out in certain language in the lease agreement that specific behavior is prohibited, you will not be able to evict tenants later on for that behavior. A residential lease agreement can cover a lot of ground, which is why it is important to ensure that all of the verbiage in the agreement is written properly.
Along with ensuring that everything is properly addressed for your own protection as the property owner, you must also make certain that your lease agreement is compliant with all state and local laws. Regulations regarding residential lease agreements vary from state to state. You may also have local ordinances and regulations with which you must comply. This is why it is imperative to ensure that the lease agreement you use in your business meets all of the state and local requirements.
Many landlords unfortunately make the mistake of attempting to write their own lease agreement or simply printing off a random lease agreement online. This can be a very dangerous practice that can leave your business exposed to risk as well as potential legal problems.
There is some information that is commonly covered in a lease agreement in order to ensure that both the landlord and the tenant are clear about each party's specific obligations. Below are some of the most common terms that are encountered in a residential lease agreement.
Names and addresses of all tenants and landlords. In the event that a property manager is authorized to receive legal papers and notices on behalf of the landlord, that name and address should be included, as well.
- Rental property address and relevant details.
- Term of the lease, including the beginning date and whether the agreement is a month-to-month, etc.
- Amount of rent due each month along with the due date. Acceptable forms of payment should also be included as well as relevant information regarding late fees.
- Required deposits and fees.
- Utilities. The residential lease agreement should state who is responsible for paying for which utilities.
- Responsibilities regarding repair and maintenance. A properly written residential lease agreement should specify specific tenant responsibilities, along with what the property owner is responsible for handling.
- Limits on behavior. Most residential lease agreements will also contain verbiage that forbids the tenant from using the unit in a manner that violates any ordinances or laws. The lease may also contain wording that prohibits the tenant from disturbing or annoying other tenants or neighbors, such as by making loud noise.
- Pets. The lease should state whether pets are allowed and if so, whether there are specific restrictions or rules.
- Grounds for termination. The lease should contain information stating that any violation of the lease agreement will be grounds for termination of tenancy.
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