“How To Make A Simple Rental Agreement” written by Mike Marko.
Do you know that it’s quite easy to make a simple rental agreement?
There are thousands of simple rental agreement templates on the internet. But it’s still important that the template will fit with your property’s terms and policies. In this article, I will share my knowledge on how you can make a simple rental agreement.
Writing a rental agreement is easy! Just follow the steps I will provide in the article below.
Writing A Simple Rental Agreement
If you are new to rental property business, or even a seasoned veteran in the industry, making a document like rental agreement may seem complicated. But they are still a necessary when renting properties. In reading and reviewing the information in this article you will find that the more detailed your rental agreement is the less likely you will have disagreements or misunderstandings with your rental tenants.
In getting started in your rental property business or reviewing the documents you have used for years to rent properties, it is best to first look at the reasons why property managers need a simple agreement to help manage the properties that they rent…
Why You May Need A Simple Rental Agreement
A written rental agreement is a legally enforceable document and can be referred to and is needed to protect you and your tenant when a rental dispute arises. Tenants signing a rental agreement serves as the proof that you and your tenant agreed on your terms and policies and helps to allow the tenant to rent the property and avoid any hassles or misunderstandings that could arise during rental.
The rental agreement can be used to inform your tenant about your requirements and expectations during the lease term. In fact, the rental agreement should contain everything about the tenancy so no unanswered questions regarding the tenants rental should arise.
- The agreement should include the terms of rental payment.
- The rules that your tenant must follow when occupying the property.
- The responsibilities of both parties, the property manager and the tenant responsibilities detailed completely.
- The consequences, financially and physically to the property if there is a lease break.
Aside from that, a rental agreement will serve as a reference for minor and major repairs to the property and should help to resolve any issues if things didn’t go well between the tenants and the property manager. It can also help prevent and help to solve any issues that could arise between tenants and the property manager if the agreement details who is responsible for the pending rental issue.
It is still advisable to make a rental agreement even if there’s no law that requires you to do so. It’ll protect you, your tenants, and your business.
The next section will discuss everything you need to know in making a simple rental agreement.
Start With The Basics
To begin making a simple rental agreement, start with the basics. You can always check the internet for templates of the rental agreement. But, downloading or copying templates from the internet is not advisable if you have strict and local and State specific policies you must account for when renting your property.
If you’re a newbie to the property management businesses then making a rental agreement may seem complicated. Below I will detail the easiest way to start and complete these types of agreements.
As a seasoned property manager you may already have all the rental agreements and forms needed. Reviewing existing forms to make sure they are up to date is essential to avoid any legal issues that could arise from an outdated or incomplete form.
To further help you in making a new form or reviewing your existing forms we will list the easy steps in making a simple written rental agreement below…
Title Of The Lease
A legal contract should always have a title that explains what the document is. I would suggest that you start your draft with the title of the lease “Residential Rental Lease or Rental Contract”. On the top of the paper, write “Residential Rental Lease” or any of your preferred title as long as it can be easily identified as a legal contract.
Parties Involved In The Agreement
To make the contract legally enforceable you need to identify the parties or the individuals entering into the contract. The names of the individuals that are involved in the residency must be stated. You acting as the property manager or your property management company, and lessor, should be identified with your tenant’s name, address, and contact information, as the lessee, should be included in this part. When making your agreement, make sure identify correctly who is the lessee and the lessor to avoid any confusions in interpretation of the contract in the future.
Description And Location Of The Rental Property
When making a rental agreement, it is also important to Include a description and location of the rented property. In this section, write the complete address and number of the rented property. A description, a check sheet and/or photos, of the condition of the property at the time of the agreement should be included. This is important to detail and prove to a court if any damages occur during the rental of the property.
Length Of The Lease Agreement
Including the terms for the lease and the termination and renegotiation of the lease are very important. The start and end date of the tenant’s residency must be present in your rental agreement. If you and your tenant have an agreement regarding early lease termination, make sure to include it also.
Being very detailed in this section can avoid losing rental income if the tenant breaks the lease prior to completion. Detailing the lessee and who is ultimately responsible for the lease is important to know who will be legally accountable if the lease is broken prior to completion…
Rental Fees And Security Deposits
Part of the benefit to signing a lease agreement to both property managers and tenants is that rents will be listed and frozen at a certain price throughout the lease period. The best place to detail rental monthly fees and other payment costs is after the length of the tenancy or lease is identified. It’s logical to include the amount of rent and stipulations for late payments here.
The security deposit and terms for its use and return should be detailed in its own section or lines of the contract or lease agreement. Regarding the security deposits, you should be specific in giving details including collection, uses for, and if the deposit is refundable or not.
You should also detail the types of repairs or damages that the security deposit will be used for to avoid any misunderstandings when terminating the lease between responsible parties. Some lease will detail that new carpet for the unit will be paid for from the security deposit when the tenant leaves. If that is not detailed you could have a dispute when the tenant terminates the lease. The usage, return, or lack of return of the security deposit is one of the common reasons why most property managers and tenant’s relationship ends on a bitter note.
Responsibilities Of Tenants And The Property Manager
The lease agreement or rental contract is a legally binding contract between the parties who sign the agreement. A simple rental agreement also includes the responsibilities of both sides prior, during and after the lease has concluded. It is important to make sure to state in the lease contract who is responsible for paying utilities, repairing damages, and cleaning the property.
Always check your state’s law regarding the responsibilities of landlords and tenants to avoid any violation of rental laws.
Specific Obligations Of The Tenant Under The Lease Agreement
Every State and local area has specific laws that need to be addressed and included in lease rental agreements. It is highly suggested that all of your rental forms, contracts, leases are reviewed and updated regularly by a Real Estate attorney to avoid any legal issues that could arise. It’s best to state in your rental agreement that it’s the tenant’s responsibility to follow the laws in your area. they must also use your property for residential purposes only.
In this section, write the tenant’s responsibilities if the rented property has been damaged or incurs damage from everyday use. Aside from that, mention in this part of the tenants responsibility if they want to do approved changes to the property such as repainting interior walls or adding more modifications. Don’t forget to mention if pets, children, or smoking is allowed inside the rented property.
Consequences For Failure To Make Payments And For Violating Lease Terms
Since the lease or rental contract is enforceable legally, it is important to make sure that your tenant has agreed on the consequences and stipulations of failing to pay the rent on time. This also includes consequences for not following your policies. In this section of the lease agreement it is appropriate to list the reasons or offenses that could eventually lead to their eviction.
Spaces For Date And Signature
Like any contract, a lease or rental agreement is not legally enforceable until all parties of the contract have signed and approved the contract. The last part of your rental agreement should be made specifically for signatures of your tenants, property management company and any and all other parties to the contract. By obtaining approval and signatures from all parties to the contract makes it legal and binding on all parties.
There are some states that require a specific format of the rental agreement, you can check them on your local government office or website.
Reminders For Property Managers
When making forms, contracts or leases it is important to make sure that you have knowledge about the rental laws in your area before writing and finalizing any form or rental agreement. Once you know the laws, it is easier for you to write the rental agreement and complete any forms needed to legally enforce the rental of the property. When writing your draft, make sure that everything that you and your tenant have agreed on are included. Don’t forget any of your policies and both of your rights and responsibilities.
Done writing your draft?
Make the necessary changes before you finalize your agreement. However, there is still one thing that you need to do before you can finalize it, consult a lawyer first. It’s very important to make sure you have any form or document developed for your rental business reviewed by necessary legal counsel prior to showing it to your tenant and asking them if they agree to everything in the rental agreement.
Get Advice From Lawyers
It is high common and suggested that to become and maintain status as a successful property manager you should be willing to get and taking advice from their trusted lawyers to avoid any violation of the rental laws.
When you and your tenant finally agree to the terms, responsibilities, and policies included in the rental agreement it is advisable to consult a lawyer and show the lease draft. Having them review any new or completed documents will only help you to avoid or be prepared for any legal issues that may arise in the future. Never hesitate to ask for any recommendations that they might add before you finalize your draft.
Final Thoughts About A Simple Rental Agreement
I just took the time to talk about simple rental agreements. A simple rental agreement includes the details about the tenant and the property. The rest will be about the property manager and the tenant’s responsibilities and rights. It’s easy to write a simple rental agreement, but before you start making your draft make sure that you have knowledge about the rental laws in your area.
Once you finish making your draft, show it to your tenant and ask them if they agreed on your terms and policies. As a last step consult a lawyer before you finalize your rental agreement.
Feel free to use the comment section below to share your thoughts or any questions you may have on this topic.
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