Finding a suitable tenant begins with marketing the property, viewings, and rental applications. Then, landlords screen potential renters to lower the risks of future contract breaches. However, even after you have settled on the best candidate, you must protect your investment. Ensure the tenant signs a lease agreement.
A lease agreement is more than a document outlining the rent amount and when it’s due. It defines the terms and conditions of the deal and outlines the way forward when the contract ends or one party breaches it. Lease agreement templates have made creating the document more straightforward.
An effective lease agreement considers all factors, anticipating and addressing common lease breaches. Although it requires time to make, it saves you much distress down the road. You should have an attorney review your contract for legal soundness and to ensure you don’t omit essential clauses.
Let’s discuss why you need a lease agreement. Then, we will provide a template and explain how to draft the document.
Why is a Lease Agreement necessary?
Both verbal and written lease agreements can be binding. However, spoken promises are difficult to prove and put you in a “your word against the tenant’s” situation. If you go to court and the renter is more convincing, the judge might throw out your case. To protect yourself, the tenant should sign a written contract. Consider the following benefits of making a lease agreement.
- You can hold the tenant accountable for late payments.
- Lease agreements provide opportunities to clarify essential matters, such as pet policies, noise violations, and lease assignments.
- You can make provisions for access and periodic inspections of the property.
- They provide an avenue to outline governing laws.
- Lease agreements also protect tenants from abusive landlords. Having one can be a sign of good faith; it shows that you care about tenant rights and are keen to follow the law.
Now that you know why you need a written agreement, let’s learn how to make one.
How to Write a Lease Agreement
Creating any agreement involves preparation, drafting, signing, and notarizing when necessary. Let’s start at the preparation stage.
Preparing to Draft the Contract
The first step is to collect the tenant’s information. Ask for their legal names, photo IDs, contact information, and employer details. You may also require them to provide an emergency phone number and information on their government-issued ID.
Review local, state, and federal lease laws. You may require a real estate attorney’s help for this step. Also, gather all the information about the policies you want to include to make the writing process less tiresome.
Drafting the Lease Agreement
With all the information ready, you can quickly create your contract. Use a titled document and follow these steps.
- Landlord and tenant information: Since you are parties to the contract, you should provide your and the tenant’s names, addresses, and contact information and mention that you are entering into a lease agreement. You may include more tenant names if more than one adult is co-renting the premises.
- Describe the property: Describe the property you are renting, whether it’s an open lot of land, a condo, a single-family home, or another, and give the address. You may also provide maps or GPS coordinates. List any appliances, social amenities, and parking lots that come with the property.
- State the rent duration: Specify the start and end dates of the lease. Landlords can also make provisions for how late into the lease a tenant may ask to extend the duration before it expires. Discuss early termination and eviction policies.
- The cost of leasing the property: State the rent amount in numbers and words for clarity. Provide payment methods and account numbers. Remember to include additional costs the tenant will incur, such as security deposits and utility fees. Also, outline how you will handle late payments and defaulted payments.
- Your ability to access the property: To avoid legal battles, make provisions for periodic access to the property. You may need to enter the premises when there is an emergency or if you want to conduct routine inspections and repairs. State how much notice you will give the tenant before you enter their residence.
- Include the necessary clauses: Below are some policies you may include to protect yourself and the property.
- Pet policy: Decide if pets are allowed and set fines for unauthorized pets.
- Maintenance policy: The tenant must know who is responsible for maintenance and whether they can alter the property. You should clearly state the tenant’s responsibility to keep the property clean.
- Waiver of subrogation: You can require tenants not to pass their legal rights to their insurance companies when they sustain personal injury at the property.
- Noise policy: Limit how much noise a tenant can make and set rules for quiet hours.
- Co-tenants are jointly and severably liable: Make provisions for adult co-leasers that make them liable as a group and as individuals. This clause protects you when one of the lessees breaches the contract.
- Insurance: You can require your tenant to be insured. Ensure this policy follows your state laws.
- Address dispute resolution: State the laws governing the agreement and how you will resolve any disagreements and breaches.
Review the document for errors and omissions before moving to the next step.
Signing the agreement
Signing a lease agreement is the most critical step because it makes the document legally binding. However, you should review the document several times before signing to ensure everything is in place. We recommend enlisting an attorney’s help. This additional step may cost you money, but it is worth it for your peace of mind.
After a real estate lawyer gives you the go-ahead, make at least two copies of the document and give one to the tenant. They will need time to review its terms before signing.
Notarization is generally unnecessary, but you can use a notary public to add authenticity. Your attorney will tell you if your state or local laws require this extra step.
Article by
Dena StandleySenior Writer | Experienced Paralegal | 79 Articles
Dena Standley is an experienced paralegal based in Houston, Texas and has over a decade of experience working as a paralegal with trial lawyers and law firms. She is passionate about making legal processes more accessible and helping people understand and navigate complex legal matters with confidence.
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