One of the cornerstones of any rental property business is having a solid lease agreement in place. This ensures that both parties are aware of their responsibilities and it protects the owner from frivolous lawsuits. But if you’re just starting out, you may not know exactly what should be included in the agreement. Sometimes, it takes multiple renters to figure out what you should have included and what wasn’t necessary. The fact is that as long as you’re not breaking any laws or discriminating against protected classes of people, you can put almost anything in it you’d like. Just be sure these three things are among them.
Rates and penalties
Your lease agreement must clearly state the amount of rent your tenants are required to pay and when they are required to pay it. Along with this information should be the forms of payment accepted, such as cash or check only and any fees that may be associated with it. Late fees are common, but you’ll need to be clear on the terms. For example, landlords typically give their tenants a grace period. So the agreement might state that rent is due on the 1st and considered late after the 5th. It might then state that a $50 late fee will be assessed after the 5th of the month. Some agreements even stipulate that the late fee accumulates at a rate of $5 a day each day that it’s late. Other fees you will charge in addition to late fees also need to be addressed. You might charge a fee for returned checks, or a fee for replacing lost keys. All these terms are obviously up to you, but they must be clearly presented.
Repairs and maintenance
Landlords are legally responsible for certain aspects of property repair and maintenance. These laws vary from state to state, but some are common everywhere. For example, landlords are always required to provide a safe and habitable environment for their renters. This usually means making sure the structure is sound and that all the doors and windows can be locked. It also means making quick repairs on anything that could be hazardous, such as gas leaks or broken windows.
Tenants are also held to certain obligations under these same laws. These can also vary between states or cities. Seattle, for example, requires that tenants “meet an owner’s reasonable expectations.” In other words, they’re responsible for keeping the house clean and free from damage. Seattle’s regulations even go so far as to lay out these expectations specifically. They are disposing of garbage properly, repairing any damages they cause, maintaining a working smoke detector, and allowing the owner reasonable access for repairs.
Your lease agreement should be clear about who is responsible for each task. In most states, it’s legal to make your tenants responsible for their own repairs, particularly if they cause them. This is usually only done in cases of minor damage, such as breaking a light fixture or damaging a door. But it all depends on what you agree to provide.
Pets
Before a tenant fills out a rental application, it’s a good idea to advise them of your pet policy, but you still need to include it in writing on your leases. Some landlords will allow pets up to a certain weight, while others don’t allow them at all. It’s also fairly common for property owners not to allow cats inside the residences or ban dogs of certain breeds. Your pet policy is entirely up to you, and you aren’t legally required to allow them on your properties.
