7 Ways to Improve Your Rental Lease
To manage your rental property with ease, you need a strong rental lease. The rental lease is the backbone of the landlord-tenant relationship.
A good rental lease acts like a guidebook when problems arise. An even better lease helps mitigate problems before they occur. Reading and utilizing our 7 tips will help you save time and trouble down the road by improving your lease:
Tailor Your Rental Lease
Most rental leases are templated documents that need to be tailored for your situation. There are two main ways you need to customize your lease:
- Make your lease city and state specific
- Edit rental terms and requirements
Each state has it’s own landlord-tenant regulations. One great way to research your city and state’s laws is with the American Legal Publishing Corporation. Just type your city in the right upper hand search bar and you’ll see a link that takes you to your city’s updated municipal codes.
Be Specific About Rental Terms
Every time you sign a new lease, you need to edit the rental terms for your current situation.
Important rental terms to update:
- Tenants’ names
- Rental term (12 months)
- Lease start and end dates
- Cosigner information if applicable (name, contact information, and income)
- Monthly rent price and how it will be paid
- Late fee rules
- Security deposit amount or move-in fee amount
- Pet rules
- Utilities
- Maintenance protocol
When you’re updating these terms, be specific. For instance, when you talk about utilities in your lease, you should clearly outline which utilities the tenant is responsible for and how the tenant can set them up. The more specific you can make the lease, the more helpful it is to your tenants, which will reduce questions and confusion down the road.
Add Clauses
Great rental leases have several, helpful clauses. There are a lot of important clauses, but here are two that are often left out and have useful advantages:
- Automatic Renewal Clause
- Holding Over Clause
It’s a headache for you (and your tenants) to figure out what to do when the lease is up. Both of these clauses address what should happen when the lease is over.
First, the automatic renewal clause states that your lease will automatically renew for a new lease term unless the tenant says otherwise. If your lease will automatically renew, you should notify your tenant 90 days prior to the renewal. This gives your tenants the opportunity to say they do not want the lease to renew.
The holding over clause helps you in case your tenant doesn’t move out when they should. The clause allows you to assume a month-to-month lease past the lease end date. Legally, a lease is null past the lease end date, but with this clause, you can retain your legal standing over rules and regulations. This clause can be customized. For instance, you can state that rent will double in the case that the lease continues month-to-month.
Use An Online Rental Lease
Online rental leases are the best leases. They’re easily customizable. The drafting process can be a lot of back and forth with constant edits and this process is much easier online. Online leases are accessible 24/7 and can’t be lost- they are backed up in the cloud.
Review it With Your Tenants Thoroughly
Beyond improving the content of your lease and how it’s built, you should improve your leasing process. Sitting down with your tenants and going through the lease to clarify and answer questions is very important. This aids communication and helps you avoid mishaps in the future.
Get Digital Signatures
As we touched on before, it’s great to move your leasing process into the digital era by drafting your lease online. Another great way to improve your lease is to sign it online.
Digital signatures are fully enforceable and just as secure. Digital signatures will ensure you get your tenant’s signature sooner rather than later, as it’s so simple to sign online.
Keep it Handy
Great rental leases are accessible throughout the rental term. Some people assume the lease is no longer relevant once it’s signed, but that is not the case. You and your tenants should have the lease handy in case of problems. You should also suggest to your tenants that they use the lease as a guidebook. This can help decrease how frequently your tenants reach out to you with questions about how to pay rent, how to set up utilities, etc.
Conclusion
These easy tweaks ensure your lease will be helpful to you and your tenants, and will hold up in court in the case of a problem. Tenants appreciate a thorough, clear lease, too. Ultimately, improving your rental lease helps you save time in the long run.
Let us know in the comments below: how do you improve your rental lease and keep it up-to-date?
Comments (6)
Hi Kasia. I wanted to add two cents worth to what you've already said here, if I may. One thing that I have found extraordinarily valuable and important to have in your lease is a "Reserved Rights" clause (or paragraph) spelling out what rights you retain as the owner/landlord. Believe it or not, if its not spelled out in the lease, you may end up losing your rights. Here's my example: "The landlord reserves the right to enter the property for inspection, without notice, between the hours of 9 am and 7 pm." Without reserving your right to enter without notice, you may lose that right in many states, and may violate the tenants rights if you enter a property without it being an emergency. If you do not specify those rights you wish to retain, you forfeit them. Protect yourself with your lease, and give nothing away.
Account Closed, about 9 years ago
Hi Tim, thanks for adding that advice! A reserved rights clause is a good way for you to spell out the rights you'd like to retain as the landlord, as you said. For notice of entry, each landlord should be aware of their state and local laws. Most states have laws that say you need to provide at least 24 or 48 hours notice (depending on the state) before entering the unit. Any clause that violates a state law will be voided if you go to court. That being said, it's a great idea to protect your rights in the lease.
Kasia Manolas, about 9 years ago
Good article! I'm a newbie, don't have a rental yet. I am a fire inspector and many of the questions from property owners, managers and renters would be easily answered with a well written lease instead of usong the local AHJ as a mediator. I'll file these suggestions for use in my leases.
Toby Rey, about 9 years ago
Hi Toby, thanks for the reply! It's great to hear this advice is helpful to you. If you have any questions, feel free to reach out.
Kasia Manolas, about 9 years ago
Well written article. This will go into my periodic re-training >39age process.
Of special note is the "hold over" clause. I had one tenant vehemently argue, as the lease has expired, any and all rules were void. Another resource told me about the "hold over", which went into my clause library.
One disagreement (Digital signing is "wonderful" when parties are remote (I am in RE sales)) However with local tenants -- IMHO nothing beats a "WET" "BLUE" initial on each and every page. I scan all documents in color. All of my properties are local and Class C+, B-.
Tim Dolan Nashua, NH
Tim Dolan, about 9 years ago
Hi @Tim Dolan, yes the holding over clause is helpful for situations where the lease expires and your tenant is still in the unit. You make a good point about digital signatures being great if you're remote. They're wonderful even if you're not remote, as the ease of signing on your own computer makes the process more convenient for everyone. And it's just as secure and legally-binding as a blue ink signature. I'm glad you enjoyed the article!
Kasia Manolas, about 9 years ago