Tips for Writing a Custom Rental Agreement
A lease is often referred to only as a legal contract, rather than as a promise of fulfillment to prospective tenants.
How you write the lease, what it says, how it says it, communicates a great to the tenant about their responsibilities, and about the clarity and confidence of your tenancy engagement.
A confusing, poorly written contract without necessary components can leave you with an unenforceable contract if you need to collect, cover tenant damage, or evict. In today’s litigious legal environment, you need to compose it professionally and manage/update it professionally (using your property management software) and even have it drive your accounting.
It Should be More Than a Legal Document to Tenants
Writing your lease as a legal document only can make your tenant feel trapped, afraid, and disappointed. Yet, they do need to be informed about their responsibilities to pay and protect the property. In customizing your lease, you may want to cover each part of an agreement explicitly as though it was going to read by a court judge, because the courts are known not to be friendly to landlords.
Without a specific, well-written custom lease, you’re leaving the interpretation of your rental arrangement up to chance by the tenant and by the courts. A clear, informative and legally enforceable contract is a wise choice.
Controlling Legal Risk
If you’re a short term rental landlord (e.g., Airbnb) the financial risks are heightened and legal remedies are a little sketchy. A customized lease might be the ticket to make irresponsible renters think twice before jeopardizing your rental.
If you consider the legal consequences for you if renters use the property for a party, neglect and don’t assume important maintenance procedures, squat on it, don’t pay their rent, or just straight out destroy the home, that alone is sufficient reason to write a custom lease agreement.
In an era where tenants have more legal rights than landlords, a well-written lease is your only guarantee of the safety of your financial investment (other than insurance). And fortunately, you can manage leases within your property management software or a viable virtual leasing app.
The Courts Want to See a Well-Written Rental Lease
What the law may respect most, and have difficulty in dismissing or misinterpreting, is a well-written lease. Such well-conceived and clearly written documents are a big helper later in court for your attorney.
If all you’re currently using is a standard, common lease you found on the web somewhere, you might want to upgrade to a lease that is well-planned, designed, and validated by an attorney. Not only could it be more enforceable in your state, the professionally-written rental lease is an encouragement for tenants to take care of your asset, meet the written agreement, and to be willingly held liable for damages or failure to pay rent.
What is a Well Written Lease?
A well-conceived and well-written lease is orderly, logical, covers the most pertinent matters and specifics and meets the courts requirements for legality and clarity, with respect to applicable rental laws in your state.
If you want to create an air-tight, legally enforceable lease, there are some general rules to follow:
- know your local and state laws
- make the wording clear and thorough
- indicate the current condition of the unit from your rent inspection and do take hi-res photos (keep them on file in your landlord software account)
- specify who is on the lease and who has legal access
- specifies important clauses, addendums, and disclosures
- specify the monthly rent and payment due date in type with no handwritten/notated additions
- specify the ban on smoking in the unit, and what types of pets are allowed
- indicate what happens with the security deposit
- specify what’s needed for early termination of the lease
- state your right of entry to the unit to maintain, inspect, etc.
- indicate all tenant expectations, have them initial each key item, digitally via the the digital lease software
- clearly state your maintenance and repair procedures and policies and what you cover (lighting, plumbing, electrical, A/C and heating, windows, floors, carpeting, fixtures, etc.
- state specifically what constitutes damage with each area or asset
- state a code of conduct related to unit usage, driveways, backyards, parties, noise levels
- state the consequences to the tenant for breaches of the rental agreement including warnings and evictions
- state how the lease can be terminated and what happens after a 12 month lease period ends
- state how rent increases can be applied
Be Specific in Your Lease Terms
Spelling out items on the lease keeps things clear and ensures your prospective tenant really understands what they’re signing and that they understand their obligations.
Use a logical flow in your lease with appropriate sections with titles to make it clear. You might use these sections in the lease:
- Location of Leased Property
- The Term of Tenancy Agreement
- Rent Amount and Due Date
- Deposit Required and Safekeeping Procedure
- Lease Term
- Tenant Rights and Responsibilities
- Landlord Rights and Responsibilities
- Disclosures and Current Condition Report
- Lease Termination Rules
- Laws Governing the Lease
Refer to an Attorney to Ensure your Lease is Valid
Since leases need to adhere to local landlord/tenant laws, you may need to hire an attorney-at-law to create a lease template. Alternatively, you could visit a site such as ezlandlordforms, where they’ve painstakingly reviewed lease design and offer leases that may give you peace of mind.
EZlandlords.com has a lease builder wizard and their knowledge of each state’s tenancy laws could be invaluable.
You can find more on each state’s landlord laws on Nolo.com. Additionally, you can modify or add to the lease you create through them. They remind you that their forms are not a substitute for professional legal advice. They offer other forms and lease addendums you may need. A payment of $30 doesn’t sound too painful!
A comprehensive, thorough lease is believed to carry more weight than a simple one-pager off the Web. Building a thorough lease puts more weight on the applicant/lessee to accept full responsibility.
In fact, the lease document is a foundational document for your business, and items in your lease can become part of your property management automation process, to make your work easier and avoid errors. Always put everything in writing, post it online via your property management software to your tenant portal so the tenant can read it when they need to. And when changes to the lease happens, other parts of your account can be instantly updated (including accounting docs).
More lease writing tips:
- know what constitutes a lease that will be voided
- know what is happening in your local courts with respect to broken leases and rulings
- understand the court’s guidance/advice on how to handle tenant situations
Learn more about going virtual with your leases using ManageCasa.
* Note: the contents of this post is for general information purposes as does not constitute legal advice or a recommended action for any part of a rental lease. Please to refer to expert documentation and the council of your attorney when creating your tenant leases.
Take the opportunity now to explore the powerful, affordable features of ManageCasa and how you might automate your leasing process.
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