Guide to Making a Solid Lease Agreement For Your Rental Property

Once you’ve conducted your property market process and screened your tenants, it’s time for the tenant to move in. However, before that happens, it’s necessary to have a clear and detailed lease agreement in place.

A lease or rental agreement should include all the terms and conditions, rules, regulations, and responsibilities that both the landlord and tenants will have to abide by. As a rental property owner, it’s important to discuss with your tenants all the provisions in the rental agreement prior to signing it.

A solid rental agreement is a crucial document that will guide the landlords and tenants on certain procedures, such as how rent payments are collected and how to report a maintenance or repair issue.

Typically, a rental agreement should also indicate the penalties and consequences in case any violations of the agreement are committed.

If you would like to learn how to craft a solid lease agreement, keep on reading!

Basic Information That Should Be Included in the Rental Agreement

Each landlord will have different priorities and therefore different clauses in their lease. That said, most rental agreements should include the following information:

Names of the Parties Involved

The rental agreement should include the names of the landlord and all persons who will occupy the property. Additionally, if the landlord has an authorized representative to act on their behalf, their or firm should also be indicated in the lease agreement.

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Ideally, all adult occupants should be named as tenants. This allows the landlord to hold all adult occupants responsible should lease infractions occur.

Name and Address of the Rental Property

The name and address of the rental property should be included in the lease agreement. Make sure to indicate the complete and specific address of the property, including the door or house number, floor (if the rental unit is an apartment building), street name, city name, and zip code.

Rent Amount and Due Date

It’s important to state the rent amount clearly, both in figure and words. You must also mention the specific rent due date in the rental agreement. For example, do not just say “rent is due on the second Sunday of each month”. It’s best to mention the specific date, such as “the 10th day of the month” to avoid confusion.

It’s also best to include when the rent is considered late based on the state’s landlord-tenant law.

Duration of the Tenancy

For fixed-term lease, you should indicate clearly the specific duration of the tenancy. Instead of saying that the lease term is for one year, it’s best to indicate the start date and the end date. For instance, you could say that the lease term starts on January 1, 2022 and ends on December 31, 2022.

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If the lease is auto-renewed, you should indicate this in the rental agreement as well. Let’s say that the lease is on a monthly basis, you could include that it will automatically renew unless the renter provides a written notice. Make sure to follow the required number of days for notice that tenants need to provide in case they won’t renew their rent.

Signatures of All Parties

The rental agreement will not be valid unless signed by all parties involved. The landlords and all tenants should sign the lease as a symbol that both parties have reached a mutual understanding of the terms and conditions. Do not forget to include the date, time, and place the agreement was signed.

Important Clauses and Provisions to Include in the Lease

The lease agreement must also cover certain clauses and provisions that should be agreed upon by both parties. The list of clauses may vary from one agreement to another, but it’s important to include all restrictions and legal provisions to avoid potential problems later on.

Here are the things that need to be covered in the rental agreement:

Subletting Clause

Landlords have the right to make their own subletting policy. This allows them to have direct control over who will occupy the property.

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Subletting means the tenant is allowed to take in another occupant to share the rent. You can disallow subletting altogether, or require tenants to seek your approval first.

Landlord Entry

As a landlord, you have the right to access the property for inspections, repairs, and in case of emergency. It’s important to comply with the law regarding landlord entry to avoid violating your tenants’ privacy.

Make sure to include a clause on how much notice you need to provide to your tenants if you need to access the property.

Tenant Responsibilities

Tenants have legal responsibilities to maintain the upkeep of the property. Make sure to include a list of tenant obligations in the rental agreement to remind them of their duties.

A few examples of these include maintaining cleanliness and sanitation, keeping the property safe, and reporting any repair issues immediately. You must also note your maintenance responsibilities as a landlord to ensure everyone understands their roles.

Restrictions

If you have certain restrictions, it’s best to include them in the rental agreement. For example, if you don't allow tenants to have pet or have a no-guest policy, make sure that the tenant clearly understands this. Other restrictions include excessive noise, partying, and being involved in any illegal activity.

Note that your restrictions must be line with the Fair Housing Act. For instance, even if you have a no-pets policy, tenants are allowed to have emotional support and services animals.

Security Deposit and Other Fees

Landlords need to disclose the place where the security deposit is being held. Also, include how you will use the security deposit and the timeframe for returning the security deposit after the lease term ends.

Bottom Line

A clear rental agreement helps prevent potential legal issues with your tenants. If you are not comfortable drafting a lease on your own, it’s best to work with a professional property manager who can do this task for you.

Draper Realty can help landlords in Norman, OK create a solid rental agreement. Reach out to us at (405) 401-8100 to learn more about our services!

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