10 Must-Haves for Your Tenant-Landlord Agreement
July 26th, 2014
You bought the property. You hired a property management company to give it a fresh coat of paint and make some needed updates. You put the “for rent” sign up. As applicants started pouring in and you narrowed it down, you suddenly realized that you don’t have a contract.
While it isn’t legally necessary to have a written contract, it’s a lot harder to backup verbal agreements. Writing it down and signing it will be safer for all. Communicating your expectations on paper will help everyone get along.
There are plenty of templates online that you can use for your contract. But beware, not all of them will meet your needs or cover your bases. You could also go to an attorney to draw one up for you. Whatever you decide to do, be sure you include these 10 things in your contract or you might regret it later.
- State the names of all the parties involved. Your name or your LLC’s name should be on the contract along with contact information. Name the tenants (all responsible parties who will live on your property) and their contact information.
- Outline terms like the length of the lease (6 months, 1 year, etc.), the rent, and deposit you expect or agreed upon. It’s also a good idea to mention fees or charges that will be applied if the rent is late or payments are denied for insufficient funds.
- Delineate whether or not your property can be sublet and the process involved if you do allow it. Specify the proper process for termination of the lease.
- Describe the utilities and services that are covered under the contract and those that the tenant will be responsible for arranging and paying for. You may also want to state whether pets are allowed and the changes that tenants can make to the property (installing appliances, cable, satellite dishes, etc.).
- Summarize the state of the property before the tenant moves in and state how damages will be handled and the charges and fees that may be incurred for repair.
- State your expectations for how involved the tenant will be with maintenance and repair and list these expectations. Will they call the property manager when needed? Or will they contact you?.
- What will the procedure be if the keys are lost or the carpet needs cleaning? Don’t forget to detail things like whether or not tenants can change their oil on the premises and not to obstruct sidewalks and driveways.
- Explain that you may periodically want to inspect the property but will give at least 24 hour notice. Include a statement that tenants may not change locks without consent.
- Identify the penalties for breaking the agreement (a pet brought in, early termination, putting up a satellite dish).
- Sign the agreement. You and each adult tenant should sign and date the agreement. This acknowledges that everyone agrees to the terms and will abide by them.
A lease agreement will keep everyone on track and minimize legal disputes should they arise. Don’t become a landlord without one.