If you want to be a successful landlord, there are many traits of successful landlords that you will need to imbibe. One does not become a popular and respected landlord overnight. It is something that most individuals learn over a time period and experiences with their tenants and contractors. But there is one thing that certainly helps you in becoming a good landlord and that is a solid lease agreement that you sign with all your tenants. Lease is a legal; document binding upon the landlord as well as the tenant and it sets out the roles of both the parties at the outset. If the lease is clear and does not leave out any important topic, it makes sure that your tenants behave nicely and continue to pay your rent on time. It also makes sure that your tenants do not create trouble and hand over the rental property in good condition when they eventually move out. Here are some very important points that your lease agreement should always contain.
- Lease agreement should be a written document. It should not be verbal agreement that leaves a chance to go back on your words. If the terms are not written on a piece of paper and signed by both parties, it becomes impossible to convince a judge that violation of terms has taken place.
- Clearly write the monthly rent and the late fee that is applicable if the rent is not paid on time. The date on which monthly rent is payable should be mentioned clearly. Get the signature of the tenant against this clause.
- Mention the security deposit that you are receiving from the tenant in advance. Also mention the conditions that need to be fulfilled for the return of this amount when the tenant moves out of your property. You can attach a separate document containing the terms and conditions for the return of this security deposit.
- Mention the term of the lease. This is very important as the terms cannot be changed during the period of this lease term. Mention how the terms of lease will be set after the completion of the term.
- Mention the name of the person responsible for the payment of utilities. There have been many instances in the past where tenants refused to pay for their utilities saying that the landlord agreed to pay for the utilities and the rent is inclusive of utilities.
- The lease should contain the entire house rules that the tenant is expected to follow. You can always show the lease later on signed by the tenant if he flouts any of the house rules regarding noise, pets, trash, partying, business activity etc to settle a dispute.
- Mention all appliances that you are providing to the tenant. You can deduct cost of broken appliances from the security deposit when the tenant is moving out.
- If the rental property is old having been built before 1978, make sure you include a lead paint disclosure in your lease. You could be fined up to $2000 by the authorities if this disclosure is not there in the lease.
- Finally, do not forget to include clauses that are must in your County. Get advice from a local attorney if you are not aware of these rules.
In any case, it is a good idea to have an attorney read all the terms of your lease agreement. You do not want to leave any loopholes that can be used by a tenant to his advantage. Having a solid lease of agreement provides peace of mind and also saves you form many troubles later on.
If you’d like to talk about property management, or you need help with Everest Property Management, please contact us at Everest Realty.
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As a top producing Realtor and Property Manager; Terry specializes in sales, extensive construction homes, rentals, REO’s, short sales, and all aspects of Real Estate. After graduating the University of Michigan with a master in MBA, Terry continued his endeavor and now has over 15+ years of experience in the Real Estate world. If there is anything that has to do with Real Estate and sales, you can always be sure of Terry to provide important, specialized knowledge.
