Nearly 40% of households are renting their home. It is a statistic that speaks of how popular and affordable renting has become in recent years.
Landlords are seizing this opportunity to rent out their property.
But there’s a lot more to it than having a for rent sign on your front lawn. As a landlord, you need to have a formal lease agreement set up with your tenants.
More importantly, you should know what’s included in a standard lease agreement to avoid any confusion with tenants such as who pays for repairs, etc.
To cover the essentials of a lease agreement, here are the 5 most important terms you must include in a lease agreement.
1. Occupancy Limits
You want a standard lease agreement that limits the number of people who are renting your residence. You don’t want way more people occupying your residence than what was agreed upon in the lease.
You can apply the standard two renters per bedroom rule. This rule varies depending on the size of the bedroom and if the occupants have children.
You should also see what your local occupancy and rental laws are before applying these rules.
2. Length of Tenancy
Leases can be as short as six months and as long as thirty years. It depends on what the landlord and tenant agree on.
In addition, the tenant will typically move in and pay on the first of the month.
3. House Rules
A landlord must have house rules in order to establish what tenant can and cannot do in the home that may be illegal or damaging to the landlord.
As a landlord, you can have quiet hours in the lease and specify no smoking on the premises.
You may also want to include rules about pets or playing instruments loudly.
4. Deposits and Fees
A security deposit is required for almost any lease agreement. A security deposit is an assurance for the landlord in case any damage is done to the property. The landlord can use the security deposit to make repairs if needed.
The cost of a deposit is usually equivalent to a month’s rent. It should also be paid before the tenant moves in.
5. Repairs and Maintenance Requirements
A maintenance checklist can help tenants understand what they need to clean or inspect on a regular basis.
You may require tenants to replace filters, light bulbs, and batteries. But these are minor requirements for a tenant.
You should include in the lease who is responsible for repairs. Fixing appliances can be especially expensive and should be noted in the lease.
You can also find more information on DIY landlord property management by reading about it on our blog.
A Standard Lease Issues Creates Fewer Issues With Tenants
A landlord should find a standard lease agreement with these terms to avoid potential conflict with a tenant.
You want a lease agreement that spells everything out in order to avoid confusion or costly expenses that the landlord will have to pay for.
You can find more information on lease agreements by contacting us.