If you are a landlord you want a well written lease that protects both you and your property. Here are twelve tips for writing a good, solid lease that will protect your investment.
Be sure you know your state law and any local ordinances that may affect your lease. Consult an attorney for the drafting of your lease after giving thought to the following suggestions.
Your lease should answer the following questions:
1. How much is the rent and all amounts due?
This sounds pretty basic but the total amount due from the tenant should be spelled out clearly. In my lease I require first month’s rent, last month’s rent, a security deposit, and a non-refundable pet depreciation fee. I show the total of all these amounts in a Summary of Amounts due. This way if I am ever in court, the judge can clearly see what is due. Judges don’t like to hunt through your lease to determine what the tenant owes you.
2. Do you charge a late fee?
Some landlords offer a discount for paying on time and that works for them. However, I think tenants are more used to penalties for paying late. I used to give my tenants a 5 day grace period, but they started taking advantage of it. I now charge a hefty late fee of $75.00 if the rent is not delivered by the first of the month. My lease also states that a statutory Three Day Notice may be given if the rent is late.
3. Do you require a security deposit?
Security deposits are to protect the landlord from damages caused to the property. Be sure your lease complies with your state’s law about security deposits. The lease must clearly spell out under what circumstances claims may be made against the security deposit.
4. Who is responsible for repairs to appliances?
I used to assume responsibility for repairs to appliances, but I found out that appliances are easily abused. Most repairs calls are regarding appliances. My lease now states that the appliances are left for convenience and are not included in the lease. They tenant may use them or not and have them repaired at their own expense.
5. Do you allow pets?
It seems like almost all tenants have one or two pets. I received one call from a prospective tenant with five dogs. If you allow pets, you must have a written pet policy. I charge a $250.00 non-refundable Pet Depreciation Fee and an extra $25.00 per month rent if they have more than one pet. You will want to be sure your insurance policy covers you regarding pets.
6. What happens if possession is delayed?
Does your lease state what happens if the current tenant doesn’t vacate on time and your new tenant is ready to move in? This scenario is likely to happen at some time. My lease is binding on the new tenant for up to thirty days.
7. Who is responsible for yard maintenance?
Tenants just don’t take very good care of lawns most of the time. My lease states that if they don’t maintain the lawn I will hire someone to do it and then charge the tenant for it.
8. What maintenance is tenant’s or landlord’s responsibility?
You want to be very clear on the issue of maintenance and repairs. Spell out precisely who is responsible for what. In my lease the tenant is responsible for the first $100 of all repairs and for all repairs due to abuse or neglect.
9. When may the landlord access the premises?
Your state law probably addresses this issue and your lease should too. My lease allows me to access the property for repairs, showings, and inspections. The tenant may not unreasonably withhold consent. In Florida, the tenant may require a 24 hour notice.
10. What is the vacating procedure?
Your lease should spell out clearly the condition that the property must be left in. I require tenants to have carpets professionally cleaned. I also charge a minimum cleaning charge against their deposit. Check your state law about what happens if the tenant vacates and leaves possessions behind. Your lease should clearly state that you are not liable or responsible for storage.
11. Do you require a move-in inspection?
My tenants are provided with a Move-in Inspection Form and it is their obligation to inspect the property and return the form to me. This is used when the tenant vacates the property to verify the condition. They can’t argue that the damage they caused was already there when they moved in. Besides I also take before and after photos.
12. What happens if the tenant moves out early?
My lease states that if the tenant moves out early and doesn’t intend to stay for the full term of the lease they must give a 60 day notice. They will also pay an early termination fee equal to one month’s rents and forfeit the security deposit. Be sure your lease spells out what happens if the tenant defaults.
I am a real estate broker, not an attorney. This article should not be considered legal advice, but rather advice from one landlord to another. You should become familiar with your state law.
Dan Forbes is the broker/owner of Premier Team Inc., Realtors, in Bradenton, Florida. He has assisted over 1000 buyers, sellers, and investors. He is also president of the Bradenton Real Estate Club.
BradentonRealEstate.com and BradentonRealEstateClub.com
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