As a landlord, you know your lease agreement is one of the most important documents you have to protect your investment. This agreement sets out the rules and regulations for your tenant and ensures that both you and your tenant are on the same page from the outset.
Today our property management experts discuss what to include in a basic lease agreement, including identifying all parties and the lease term, spelling out all rules and regulations for the tenancy, and including all necessary information. So before creating your next rental agreement, read this blog!
Identify All Parties and the Lease Term
When drafting a residential lease agreement, it's important to clearly identify all parties involved. This includes the landlord, tenant, and any co-signers or guarantors.
Additionally, it's essential to specify the lease term. For example, your agreement could be a month-to-month tenancy or a fixed-term lease, such as a year-long lease. The lease term should be clearly stated in the lease agreement, and any renewal terms should also be documented.
Define the Rules and Regulations for the Tenancy
Another critical component of a rental agreement is outlining the rules and regulations for the tenancy. This includes specific policies related to smoking, pets, noise, and other prohibited activities.
By clearly outlining these policies up front, you can help prevent any misunderstandings or conflicts with your tenant down the road.
Include all Necessary Information
In addition to identifying all parties and specifying the lease term, there are several other pieces of information that should be included in a basic lease agreement. After making sure your lease includes the names of every tenant and the type and length of the tenancy are defined, ensure the document also includes the following critical elements.
Monthly Rent Amount, Security Deposit, and Other Fees
The lease agreement should specify the monthly rent rate, the security deposit required, and any other fees or charges associated with the tenancy. Along with the monthly rent amount, the document must clearly show the date rent is due, how to pay rent, when it's considered past due, and the penalties for late rent.
Outline your responsibilities for repairs and maintenance, as well as any specific procedures for reporting repairs and maintenance issues. The lease should also document what is considered normal wear and tear vs. the types of damage a renter must pay for during their tenancy.
A Landlord Access Clause
The rental contract should specify when and how you can access the property and under what circumstances.
While the rental is your property, your renters have a right to privacy during a tenancy. Showing up unannounced, too often, without cause, or without enough notice can lead to violations of your residents' rights and lawsuits.
Rules About Illegal Activities, Noise, and Pets
The lease agreement should spell out the rules related to prohibited activities, such as illegal activities, excessive noise, or pets. If you prefer tenants not to have pets in your property, make sure that it is clear in the lease document.
Also, include clear consequences for violations of these rules.
Required Landlord Disclosures
When owning rental properties in Detroit, property owners must follow the requirements for landlord disclosures, such as lead-based paint disclosures. Therefore, it's essential to be aware of these requirements and include any necessary disclosures in the lease agreement.
If you're not sure of the requirements, a property manager can help!
When drafting a lease for a residential property, it's essential to be as specific and clear as possible. Avoid using vague or ambiguous language that could be open to interpretation.
To enforce the lease appropriately, it must be accurate, detailed, and clear.
To make a lease agreement legally binding, it's important to obtain signatures from all parties involved. This includes the landlord, tenant, and any co-signers or guarantors.
Without all the required signatures, property owners and property management companies can't enforce the lease.
Avoid Relying On a Free Lease Agreement Template
While using a free lease agreement template may be tempting, it's important to customize the template for each property. This ensures that all necessary information is included in the lease agreement and that the terms of the lease are specific to that property. Failure to do so could lead to legal problems down the line.
Using a free template can help you get started with your next lease, but be sure to review it with your lawyer or a property manager to ensure it protects your properties.
A Detroit Rental Property Management Company Handles Leases
Your lease agreement is crucial! By including all necessary information, spelling out rules and regulations, and being specific and clear in your language, you can protect your rental property investment and avoid legal problems down the line.
If you are a real estate investor in Detroit and need help with your lease agreements, consider working with Own It Detroit. As the best Detroit rental property management company, we have years of experience managing rental properties and can help ensure that your lease agreements are comprehensive and legally sound. Reach out to learn how we can help!
Get more tips for successful property management in our free resource, the "Expert Guide to Rental Property Management."