A good lease is the foundation for your success as a landlord. When tenants understand your expectations, they are more likely to live up to them. Furthermore, if tenants disregard some aspect of your agreement, a solidly written lease will give you firm legal ground for pursuing your rights. Here are 10 elements to include in your lease to ensure that it covers all the essentials:
1. Names of every tenant
If you rent to several people, you should not allow them to decide among themselves whose name will go on the lease. Every adult in the dwelling, married or not, should be included on the lease. This is helpful to you because it makes every person on the lease financially responsible for the entire amount owed to you. It is also helpful to list children’s names, simply as a way of being specific about who is occupying the dwelling. Occupancy should be limited to those people whose names are on the lease, and the issue of subletting should be specifically addressed.
2. Local landlord-tenant laws
Each state, county, and city has its own set of landlord-tenant laws, so you need to make sure that your lease follows local requirements. These laws cover many topics, including the amount of notice that you must give before you enter the property, how you must handle security deposits and what rules you must follow if you need to evict a tenant. If you have purchased a boilerplate lease, it’s essential that you change the parts of it that don’t comply with your local laws.
3. Rent payment expectations
Your lease should spell out exactly when, how, and where your tenants are supposed to pay the rent. These specifics should include:
- Amount of rent
- Due date for rent payment
- Form of payment: Will you accept cash? Money orders? Checks? Electronic payments? You may have a preference for a certain form of payment — for example, you may not want to accept checks because they can take a long time to clear — and it’s important to let your tenants know what you expect.
- Place of payment: To avoid disputes related to a tenant’s unsuccessful effort to submit payment, it’s helpful to state the location at which payment must take place.
4. Utility responsibilities
This section of the lease is highly variable from one residence to another. In some cases, tenants may establish their own personal accounts with city utility companies. In other situations, landlords may set a flat fee for utilities and ask tenants to keep their usage within certain limits. For example, you may pay the trash removal bill, but limit your tenants to a certain size of trash can. If your tenants will have responsibilities such as putting trash cans out or calling for a new oil delivery when the heating oil level is low, it is very important to spell these out.
5. Pet Policies
Your lease should cover which types of pets (if any) you allow. It should also specify quantity. If you allow cats, does that mean you would permit a tenant to keep eight of them? Also, do you allow snakes? Parrots and other exceptionally loud birds? Be sure to clarify your pet deposit policy, including any situations in which you find out about a pet after the fact.
6. Lease-breaking criteria
If your tenant wants to move out before the lease is expired, will you require them to pay for the full lease period? Or would you ask them to pay until you find a new tenant? Landlords have various opinions on this matter, so you need to clearly communicate your expectations. Likewise, you should spell out your right to terminate a tenancy if the renter breaks certain clauses of the lease. Don’t forget to check your local landlord-tenant laws to see if there are guidelines you’re required to follow.
7. Maintenance responsibilities
What is your tenant responsible for maintaining the property? Are they expected to water the lawn, replace fire alarm batteries, or shovel snow off the sidewalk? You can’t hold a tenant responsible for doing work that you never put into writing. Furthermore, you should mention that they must notify you if any household system stops working. In most cases, you will be responsible for keeping the heat, hot water system, and basic safety elements in functional condition, but you should spell out what manner of collaboration you expect from your tenants.
8. Security deposit details
Security deposits create fertile ground for landlord-tenant disputes. To head off trouble, spell out exactly what the security deposit may be used for. Be sure to check your state and local laws before setting the amount of the deposit, and clearly state the fact that your tenant may not use the deposit for the final rent payment. Likewise, clarify which part of the deposit is refundable, and how soon you will refund it, following tenants’ departure.
9. Tenant alterations
Although a lease cannot foresee every potential alteration a tenant might make on the dwelling, you can create categories of changes that require your permission. Do you want tenants to be able to paint interior walls as they wish? Can they install shelves, burglar alarms, or overhead light fixtures?
10. Emergency notification procedures
If the washing machine floods the basement, or there is a fire, the tenants need to be able to reach you right away. Be sure to include your emergency contact number, and describe the nature of emergencies that would give you permission to enter the tenant’s dwelling without notice.
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