What Makes A Strong Rental Agreement
Landlords and tenants cats and dogs hippies and yuppies some things are just destined to clash. Tenants and landlords are always in disagreement about something or other and when they do where do they look first? The rental agreement of course which means you need a strong rental agreement that looks out for your best interests.
What makes a strong rental agreement?
The most important and overlooked aspect of a rental agreement is whether it complies with all applicable landlordtenant laws. Since each state has different landlordtenant laws this means you need a statespecific rental agreement. Sometimes states offer them for free on their websites but more often landlords purchase them from real estate attorneys or websites specializing in landlord forms see the Resource Box for an example.
The usual variables such as rental amount term tenants’ names etc. need to be included of course but there are a slew of other variables that need attention as well. What’s your policy on pets? Subleasing? Noise? Criminal activity? Cleanliness? You get the idea.
An especially contentious point is late rental payments. When does a payment become late? What’s the late fee? These are usually governed by state landlordtenant laws and vary state to state which is one more reason to use a statespecific lease that covers these issues.
Maintenance and repairs are another big area of friction for most landlords and tenants. Who’s responsible if the toilet is clogged? What if a cockroach problem develops? A strong rental agreement will spell out what kind of maintenance and repairs are the landlord’s responsibility and which are the tenants so that there’s no disagreement down the road about who should pay for what.
Unlike forty years ago a rental agreement is no longer a sufficient amount of paperwork between a landlord and tenant and nowadays landlords are hand a small rainforest’s worth of paper to the tenants when they sign the rental agreement. Disclosures addenda notices pamphlets it’s a dizzying process. A good real estate attorney can steer you properly in delivering all the right disclosures to a tenant or your property management company will take care of it for you. If you don’t want to pay for one of these services there are websites that will compile these required forms for you based on your state and needs see EZ Landlord Forms in the Resource Box. One particularly glaring example of additional paperwork required is lead paint disclosures which are required by the federal government as well as most state governments.
There are other points that should be clearly spelled out in your rental agreement such as who pays for which utilities and what constitute acceptable uses of the rental property. Think of the time spent on a strong rental agreement as an investment which will prevent a host of headaches and problems later on and you’ll be a happier landlord for it.
About the writer: Brian is a landlord who owns several rental properties in Las Cruces NM who also contributes his knowledge of real estate investing to such websites as NuWire Investor Bigger Pockets and EZ Landlord Forms an online provider of rental forms such as a customizable rental agreement.
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