A well drafted lease is something that you must have if you are going to be renting out your property. The laws in each state are slightly different so be careful – a lease must both spell out the entire agreement between you and your tenant and must meet all of the requirements of your state. If you miss a key element, enforcing your lease can be costly and troublesome.
The lease is a binding contract that defines the responsibilities of the two parties – the tenant and the landlord. A well drafted lease protects your tenant from abuses and misunderstandings, and it protects you from tenants who make unreasonable demands or make claims of verbal agreements that never existed.
A lease has many components, but here are a few you should ensure are in the final lease form you use:
Alterations: Your lease should clearly state the kind and extent of alterations that you will allow in your property.
Subleasing: Your lease should state very clearly if subleasing is allowed. If it is allowed, be very clear on the terms.
Due Dates and Late Fees: Your lease should be very clear on when rent is due, when a late fee will be assessed, and the amount of the late fee.
Form of Payment: Your lease should specify clearly what forms of payment you will allow. Checks? Cash? Cashier’s Checks? Money Orders?
Access: As an owner and landlord, you should have access to your property for periodic inspections. Your lease should detail when and how you will enter the property to conduct inspections. State laws vary on this subject and your lease should conform to the laws of your state.
Maintenance: Your lease should state very clearly who is responsible for the maintenance of the property. If it is a joint responsibility (not a good idea), the lease should make clear who is responsible for what.
Utility Payments: Your lease should be very clear about which party is responsible for which utilities that serve the property. Be particularly cautious about garbage service. While many landlords consider this a utility, many states have laws that deal strictly with which party is responsible for garbage service.
Abandonment: Your lease should be very specific on the subject of abandonment. It must clearly define your options if your tenant leaves the property without notice.