7 Important Terms To Include In Your Lease Agreement
If you own a property you plan to rent, you’ll want to place priority on legalizing any arrangements with tenants with a written rental agreement. This way, if you find yourself in a landlord-tenant legal dispute, you’ll be better positioned with a formal lease in place. When structuring a lease agreement, it’s important to include these seven terms.
1. Names of landlord and tenant(s)
It’s essential for a landlord to include their name and contact information in the lease, along with the names of each individual 18 years and older who will be living on the property. Make certain each party signs and dates the lease.-
Pro tip: Clearly state any occupancy limits on the rental
2. Address of the rental
In the lease, the address of the home, apartment, condo, or room should be clearly stated. Landlords should be precise with the rental’s address and any identifying areas tenants will be inhabiting, such as an apartment number, floor, or other location. If only a partial area of a home or building is being rented, be specific about what spaces the tenant(s) will occupy.
3. Rental Terms
Rental terms should include the amount of rent per month and on what date rent is due. If late fees will potentially be applied, clearly specify this. Other important rental terms to include are the length of the tenancy and stipulate what exact date the lease starts and ends. Calculate the full amount of the lease rental and then divide it by how much will be due each month; clearly spelling out the full rental terms avoids any potential confusion for either party.
4. Security Deposit Terms
Most landlords require a security deposit, but the amount they collect often varies. You should check with your local government about potential security deposit limits. Along with the amount of security deposit collected, including the date the deposit was collected, name and address of the financial institution where money will be held, interest rate, and procedures for returning the deposit. If deductions may be potentially taken from the deposit, the reasons should be clearly outlined.
5. Rental Inclusions and Exclusions
The lease should also outline what services are included within the rental price and what expenses are the responsibility of tenants. For instance, clearly list any utilities or services that are rent-inclusive, such as electricity, heat, air conditioning, cable, or even furniture. If any services or routine maintenance are not included with the rent, this should be carefully stipulated, such as lawn care, snow removal, etc.
6. Tenant Responsibilities
Tenants have specific responsibilities under landlord-tenant laws. For instance, they must agree to keep the rental property free from safety or sanitary hazards, not damage the property, and follow building/housing codes. Any state-required responsibilities should be clearly outlined for tenants.
7. Additional Tenancy Rules
This section includes your expectations of tenants, including smoking rules, pets, no illegal activities, and any rules associated with noise/quiet hours. If a tenant fails to follow rules, note in writing the lease can be terminated.
Ensure All Bases are Covered
Before renting your property, plan for leases that are legally binding and adhere to all federal and state housing laws. Consulting with an experienced law firm will ensure leases are properly structured and you’re protected. To learn more, contact Bay State Law today.