All landlords dream of having their rentals inhabited by
perfect tenants—and that all starts with having them sign a
rental agreement that spells out your expectations. It’s a vital step.
This is the legal document that protects you from a whole slew of nasty
surprises that tenants can fling your way, from late or unpaid rent to
damage to your property—and plenty more random issues. You want to
sleep better at night? Here's how to write a rental agreement that's
airtight.
Payment information
This
section of a rental agreement gives all the details on how much rent is due and
when, and the consequences if the tenant doesn’t pay. You’ll want to include
the following information:
- Exact amount of rent
- Due date
- Late fees that will be charged, and by
when
- Returned check fees that will be charged
- Security charges and refund
circumstances
- Utilities and other fees tenants are
responsible for
Property particulars
You’ve
got your rental home all spruced up, and the last thing you want to do is have
to pay for damage inflicted by a tenant who didn’t properly care for it.
Protect yourself! You'll want your rental agreement to cover the following
situations:
- Definition
of the property premises, including common areas
- Definition of damage vs. normal wear and
tear (e.g., minor wall scrapes, worn carpet, and other relatively easy
fixes)
- Specific details on what can be altered
(e.g., can tenant put holes in the wall for hanging pictures? Can the
walls be painted?)
- Owner’s rights to enter and inspect he
property, and how much notice will be provided (typically at least 24
hours is required by law)
- A reminder not to change the locks
or bar your access to the apartment
- A reminder that the tenant should
inform you immediately of any damage
Additional circumstances
It’s
hard to foresee what a tenant might do, so it’s best to cover any eventuality
you can think of. Here’s a list to get you started:
- Are pets allowed? What kind? How many?
- Are overnight guests allowed? How long?
- What parking is included?
- What can be stored on site?
- How many keys are included?
- What are the noise ordinances in the
neighborhood?
And
although you might assume that everyone knows this, it's best to make the
following things crystal-clear in your rental agreement just in case:
- Illegal activity such as drug dealing is
strictly prohibited.
- The tenant is required to comply
with all local ordinances, including laws pertaining to health and safety.
Keep
in mind that your property and lease must also comply with all federal, state, and
local laws, including health and safety codes, occupancy rules, disclosure
requirements, rent control ordinances, and anti-discrimination laws.
How a real estate attorney can help
Not
sure if the language in your agreement is ironclad? A real estate attorney can help you draft something or check
your work.
“Not
using an attorney is a huge risk,” says Ed
Laine, partner/broker of Miller Laine Properties in the Seattle
area. And since rental laws are constantly evolving, consider asking your
attorney to audit your lease regularly and make changes to cover any new issues
that might leave you vulnerable.
Remember, the stakes as a
landlord are high—so why not do everything within your power to make sure
your agreement is up to snuff?
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