While rental agreements will differ between properties, a common ground links through all these contracts since the same basic terms are expected to appear on them.
They will also be governed by the same state laws and local regulations, so you will find that to remain compliant, you must follow the legal conditions.
Keep reading this article to learn what basics must be included in your rental agreement.
Names of All the Renters
All the renters’ names must be declared in the contract and their signatures must also be included.
This signifies that they agree with all the terms and conditions covered by the rental agreement, which will include the duty to pay the rent in full each month at a specific date and fulfill their tenant obligation to maintain your property reasonably.
All tenants must affix their signatures. This is vital since it affords greater protection for the landlord.
You can go after the other renters named in the rental agreement even if one of them moved out without informing anyone.
Limits to the Occupancy
Ensure you declare that only the renters who signed the rental agreement are considered as tenants.
In case problems arise, you will solely be responsible for the residents that you met and have done a tenant screening.
You may not have any idea if your current renter accepted other tenants without your approval.
This method is for everyone’s safety. If you don’t include this clause, you might become liable for other occupants in your property without knowing their existence.
Term Period of the Tenancy
Term periods in a lease may differ. Some rental agreements are on a month-to-month basis, which means the contract automatically renews as long as no notice is given by either the landlord or renter to end the tenancy.
In contrast, fixed-term leases generally last a year. Depending on your purpose, you can either choose a term period of month-to-month or a longer fixed-term lease.
If you intend to sell your rental property and seek a buyer, it is best to remain flexible with the tenancy period and opt for a month-to-month arrangement. It will be harder to ask a renter to move out before the tenancy is over for fixed-term leases.
Rental Amount
When stating your rent amount in your rental agreement, make sure to complete the details. You must be clear on the due date and the different options for payment.
Be specific about whether you allow mailed-in checks, electronic payments, or credit cards. Doing this eliminates any potential conflicts with renters regarding rent collection.
Aside from payment methods, it is also important to think about the following and include them in your rental agreement.
- Late fee if the rent payment is delayed
- Amount of the late fee and grace period if applicable
- Additional fees you’ll charge for bounced rent checks
Deposits and Fees
Most landlords and tenants can have disputes over the treatment of security deposits. That is why it is crucial to be clear and specific in this section.
Read up on the state laws to adhere to what is legal. Some states are particularly strict in requiring landlords to inform renters where security deposits must be stored.
Details of the following should be found in your rental agreement:
- The security deposit amount (must not exceed the maximum limit set by the law)
- Usage of the deposit, specifically the property damage repairs covered
- The number of days and method of reimbursement of the security deposit
- Non-refundable fees of the deposit (must comply with State laws)
It is also a good practice to provide information to the renters if the security deposit is placed in an interest-bearing account even if your state will not require it. Renters will trust you more if you show transparency.
Repairs and Maintenance
Another source of conflict for landlords and renters concerns repairs and maintenance. It is not far off to think that some renters will decide to withhold the rent if a landlord delays maintenance repairs when they already reported a property issue.
In your rental agreement, provide details about the duties of each party when it comes to maintaining the rental space. This prevents animosity between the parties and reduces stressful complaints.
Your rental agreement should include the:
- Duties of the renter - list down the maintenance tasks renters must do for reasonable cleaning and to eliminate potential pest infestation. Be clear about repair costs being shouldered by renters for property damages that resulted from tenant neglect or abuse.
- Requirement of renters to report property issues - since they inhabit the rental unit, renters know the problems that occur in the unit. Include details on what issues they can report for their safety and outline the process for sending a request for property maintenance as well.
- Restriction list - be clear about your limits to DIY repairs and putting up decors in your rental space. Inform renters if they need to ask for approval before updating your rental place for their enjoyment, such as repainting the unit or hanging frames on walls.
Rental Property Entry
Inform renters in your rental agreement about when you will need to enter the unit. Provide an early notice according to the acceptable period in your State laws. Observe respect for the privacy of renters.
This makes tenants happy and encourages them to stay longer in your property.
Pet Policy
Whether you are a pet-friendly accommodation or not, this must be spelled out in your rental agreement.
If you are open to pets, mention performing a pet screening and your restrictions according to the breed and sizes of the dogs and the number of pets allowed for each renter.
Bottom Line
Creating a rental agreement makes it easy to cultivate positive relations with your tenant.
If you need support in managing your rental business, contact Nelson Property Management today! We can help create customized rental agreements, and offer multiple property management services.
