Landlords: What You Need to Know to Draw Up a Lease

For those planing to become landlords, what you need to know to draw up a lease could fill a book. Fortunately, you can usually find a decent lease template that contains all the necessary legal terms to protect your interests, and condense it into a document easy to understand by your tenants.

First, make sure you get full information on all the people who will be living in the residence. You have the right in most states to ask for a criminal, credit and rental history for each person over the age of 18. Put a clause in the lease that any additional tenants must be approved before they can move in, and that an additional fee will apply.

Next, demand that the tenant carry renters insurance, or charge enough to cover a policy (these policies are typically around $25 a month for $20,000 worth of coverage - not a huge investment.)

Clearly state any rules and regulations of the local homeowners association, as the association will go after you and not the tenant if the home is not in compliance. Make it clear that if the grass is not kept cut, you will cut it and a fee will apply, or simply roll lawn care into the rental cost.

List what is covered by you as the landlord and what the tenant must cover in the way of utilities; include electric, gas, water, trash collection, phone, cable and internet.

The rent amount should be stated as well as the firm due date, any grace period applicable, and relevant late fees. You can also direct what form of payment is acceptable, and offer an incentive if your tenant pays the rent prior to the due date.

Set rules regarding routine maintenance; for example, changing a light bulb is the tenant's job, but they should call you or a designated maintenance man for major problems such as a broken air conditioner or a plumbing problem.

Announce whether or not the lease is renewable, and what the rent increase will be if the tenant decides to exercise that option. Also make clear what type of notice must be given - most states allow you to demand a 30 day notice in writing, but this information must be in bold face and underlined in the lease to be enforceable.

State under what terms a security deposit will not be returned, and what the specific fees are which can be retained - such as $100 per room to re-carpet, or $20 per hole in the drywall that must be repaired. this will discourage tenants from being careless with your property. Also note if there are any nonrefundable deposits, such as for pets.

Finally, describe the eviction process in accordance with local law. Make two copies, sign each and have the tenant sign, and each of you should retain a copy, along with a walk-through inspection list before you hand over the keys.

These landlord tips for drawing up a lease should help you protect yourself and your property, and secure good tenants who will pay on time and take good care of your property.

Related Life123 Articles

Rental properties can be a good investment, but there's more to owning one than acquiring equity while someone else pays the mortgage. You'll need to deal with maintenance and business issues, as well as the occasional ornery tenant. Before you sign the mortgage and post a For Rent sign, be sure you have the skills to handle the job or the money in your budget to pay someone who does.

Making repairs is often a sore spot between tenant and private landlords. While some landlords are great about making repairs quickly, others take a long time. On the other hand, some landlords clearly spell out in the lease when a tenant is responsible for a repair and reasons for delaying a costly repair, such as evaluating bids.

Frequently Asked Questions on Ask.com
More Related Life123 Articles

Though the law generally protects tenants, you have a number of landlord rights that can protect the investment you have made in your rental property. From timely rental payments to evicting when necessary, landlord rights are in place to ensure that your property continues to be a good investment.

Some real estate purchases are for living, while others are for investment. Whether yours is for the former or the latter, it's important to know the issues involved in renting your property.

Becoming a landlord is no easy task. As a matter of fact, it can become particularly daunting at times. However, if you have the will, know-how, and personality for it, this is a job that can be lucrative and rewarding.

© 2014 Life123, Inc. All rights reserved. An IAC Company