A lease agreement serves as the basis of the landlord-tenant relationship. It specifies each party’s rights, privileges and obligations. Most importantly, a lease agreement is legally binding and can be enforced in court.
Because a lease agreement is a crucial document, it is important that both parties take it seriously. As a landlord, it is important that you create a lease agreement that not only protects your investment but is also compliant with state and federal laws.
Besides the names of the parties to the contract, here are two important clauses that every residential lease contract must come with.
The lease period
The lease duration must be clearly stipulated in the contract without leaving room for ambiguities. It helps to indicate the date when the lease period commences as well as when it will run out. In cases where the lease period is fixed, it is important that the document outlines what happens if either party vacates the contract before the expiry.
Rental amount and conditions
It is important that you include the amount of rent the tenant will pay during the tenancy period. Additionally, you should indicate when the rent will be due and how it will be paid. For instance, the contract can indicate that the rent will be due on 5th of every month and shall be paid by cash or EFT. This clause may also include circumstances when the rent can/will be reviewed and increased. This is usually important if you are writing a long-term lease contract, say five or ten years.
Still on money matters, it is important that the lease contract talks about the security deposit as well as other charges. Also, be sure to indicate what will happen to the security deposit at the end of the lease contract.
A properly-written residential lease agreement can protect the landlord as well as the tenant’s rights and interests. Find out how you can create a residential lease agreement that works for both parties.