Questions on a rental agreement for first rental

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Questions on a rental agreement for first rental

Charlene Stovin
Member since 2015 · 16 posts · 5 votes

Hello all

My boyfriend and I are getting ready to rent his house out; there are things that I would like to put in the rental agreement, but I don't know if what I am wanting and asking is realistic - or if there are other questions as well I need to ask and cover ourselves for.

The home is a 3 bed, 2 bath on 2 acres; the property has a seasonal creek that runs through it, but the house is not in danger of flooding

So, here we go:

1) is it possible/viable to put a 3-day no cause clause:  a friend of mine in Oregon added a 3-day no cause eviction clause In their rental contract to cover things like no payments, drug eviction, damage.....but they did it to help ilvaite  the 30 day eviction process.  Is it reasonable or legal to do this?

2) I saw on one of the forums a post that there is something you can put in your rental agreement, which basically states something like: if one of the clauses in the contract can't be enforced, that it will not nullify the contract.  (it prevents the issue if one part of the contract is ruled not enforced, then the rest of the contract will not be nullable) - what is that called?  (the legal term)

3) The creek: do you suggest anything other than home owners insurance to cover if someone where to get into the creek and drown?  I don't see that happening, but when we have rain here in Texas, and a lot of it - there is water ….I don't want to be liable for kids playing in it and getting hurt

4) late fees: when do you recommend charging late fees?  The day after a payment is late?  Can you word your rental such that if they are more than a week late, you can start eviction?  What is a suggested late fee per day?  ($50?, $25?)

5) last one - promise!!  We have a renter we are considering; he has been renting a room from my boyfriend for several months.  We are thinking of letting him rent the house if he does the yardwork for a reduced price; if he doesn't do the yard, we will have to add $200 a month to cover it -do you suggest just hiring a yard maintenance rather than giving him the opportunity to do it?

I am looking for a template for a rental agreement; when I have added what I want, I will take it to a lawyer and have them look at it, make suggestions, etc.

Meantime, I will keep looking for my answers here on BP, I know I have seen some of the same questions, and I am sorry there are so many!

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Jerel Ehlert
Attorney · Austin, TX · Member since 2014 · 888 posts · 759 votes
6y

Landlord-tenant law varies wildly between states.  Check with an attorney or real estate broker in your state.

3Reply
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  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    6y

    The reality is ....you can put anything in your lease and even if they agree it is a maybe 

    The 3-day no cause if iffy at best  For non-payment issues, I always suggest 30 days to cure

    In any case you will have to evict, which is simple in Texas in case of non- payment but  iffy at best in other cases

    In regards to the creek, you are the owner and should/will included in any lawsuit 

    In my experience which is 30 years, work in lieu of rent rarely works out in your favor 

    1Reply
  • Mike McCarthy
    Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    6y

    M ost states won’t allow a 3-day eviction. Eviction and non-renewal is usually based on state law. Understand what your state laws are on evictions and see where you go from there. Check out nolo.com for more details.

    My other comment is to never reduce rent for work. Keep the rent as-is, then create a separate agreement to do certain work for whatever price. Cut a check each month for the work. It makes it easier to terminate and not pay the work agreement if the work isn’t getting done.

    1Reply
  • Jerel Ehlert
    Attorney · Austin, TX · Member since 2014 · 888 posts · 759 votes
    6y

    Landlord-tenant law varies wildly between states.  Check with an attorney or real estate broker in your state.

    3Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    6y

    @Charlene Stovin I can’t comment on the things you mentioned that are largely dictated by local landlord/tenant law, but as far as letting people do maintenance in exchange for a reduction in rent I would highly advise against it. 

    In the long run it almost never works out, the tenant either does a shoddy job that will cause you more money to fix or they just lose interest in doing it.

    0Reply
  • Domenick T.
    Investor · Springfield , NJ · Member since 2017 · 192 posts · 93 votes
    6y

    @Charlene Stovin

    Regarding Q2: the legal term is Severability

    Definitely include it if you plan to make additions for your other questions.

    1Reply
  • Mark S.
    Real Estate Investor · Saint Paul, MN · Member since 2017 · 543 posts · 474 votes
    6y

    @Charlene Stovin Others addressed most of your questions but regarding your concern about the creek - I would have a solid landlords insurance policy and an umbrella policy on top of that with whatever amount of liability coverage you would feel comfortable with. $1,2,3 million? Inexpensive peace of mind.

    1Reply
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    6y
    Originally posted by @Charlene Stovin:

    Hello all

    My boyfriend and I are getting ready to rent his house out; there are things that I would like to put in the rental agreement, but I don't know if what I am wanting and asking is realistic - or if there are other questions as well I need to ask and cover ourselves for.

    The home is a 3 bed, 2 bath on 2 acres; the property has a seasonal creek that runs through it, but the house is not in danger of flooding

    So, here we go:

    1) is it possible/viable to put a 3-day no cause clause:  a friend of mine in Oregon added a 3-day no cause eviction clause In their rental contract to cover things like no payments, drug eviction, damage.....but they did it to help ilvaite  the 30 day eviction process.  Is it reasonable or legal to do this?

    2) I saw on one of the forums a post that there is something you can put in your rental agreement, which basically states something like: if one of the clauses in the contract can't be enforced, that it will not nullify the contract.  (it prevents the issue if one part of the contract is ruled not enforced, then the rest of the contract will not be nullable) - what is that called?  (the legal term)

    3) The creek: do you suggest anything other than home owners insurance to cover if someone where to get into the creek and drown?  I don't see that happening, but when we have rain here in Texas, and a lot of it - there is water ….I don't want to be liable for kids playing in it and getting hurt

    4) late fees: when do you recommend charging late fees?  The day after a payment is late?  Can you word your rental such that if they are more than a week late, you can start eviction?  What is a suggested late fee per day?  ($50?, $25?)

    5) last one - promise!!  We have a renter we are considering; he has been renting a room from my boyfriend for several months.  We are thinking of letting him rent the house if he does the yardwork for a reduced price; if he doesn't do the yard, we will have to add $200 a month to cover it -do you suggest just hiring a yard maintenance rather than giving him the opportunity to do it?

    I am looking for a template for a rental agreement; when I have added what I want, I will take it to a lawyer and have them look at it, make suggestions, etc.

    Meantime, I will keep looking for my answers here on BP, I know I have seen some of the same questions, and I am sorry there are so many!

    I would look at a form (TAR ex.) lease and then make notes on what you want your lease to reflect. 

    1Reply
  • Charlene Stovin
    OP
    Member since 2015 · 16 posts · 5 votes
    6y

    @Mike McCarthy awesome thanks

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    6y

    @Charlene Stovin I would recommend buying a lease that was drafted by a local attorney, familiar with your local laws. (Don't just Google search a free one.) It is fine if you suggest changes for them to review. The reason you want a prepared lease is because "you don't know what you don't know". You are likely to leave out important clauses. You also don't want to add unnecessary or illegal clauses to the lease.

    One good option, f you sign up for a PRO membership with BiggerPockets, you get access to state specific lease documents that were reviewed by an attorney in that state. It is one of several perks. Honestly, having an attorney review a lease will probably cost more than a one year PRO membership, so there is huge value there.

    To address your specific questions:

    1. I am not sure a 3 day no cause is legal anywhere. I have heard of 3 day notice to vacate, but that is with cause (non rent payment, breaking the law, etc). I have heard of 30 day no cause, which is essentially terminating a month to month agreement. In that case, there is no reason you need to give. Check what is legal in your area.

    2. Any standard lease normally has a clause that states if one item on the lease is found void, it does not void the other clauses. Any attorney should add this.

    3. General liability should cover the creek, but it may not be a bad idea to have a specific clause in the lease that prohibits wading or swimming in the creek. You could also say, children should be under supervision when near the creek. Sadly it is a risk. We have people drown in the city river and they sue all the time, even though there is warning signs. 

    4. Late fees, we say due on the 1st and grace period on late fees up to the 5th. After the 5th, it is $50 plus $5 per day. We like the "per day" adder, otherwise it can limit incentive to pay quickly after it goes late. Most states cap late fees to some percentage of monthly rent, so stay within stat limits.

    5. We rent all our houses with yard care included. I would definitely recommend this.

    Be aware that many people put illegal clauses in their lease and falsely believe just because it is in the lease, that it is enforceable. The risk of bringing a lease to court with illegal clauses is that the judge could deem you not credible because you are trying to enforce an illegal contract. 

    1Reply
  • Charlene Stovin
    OP
    Member since 2015 · 16 posts · 5 votes
    6y

    @Joe Splitrock. Thank you and everyone; I was looking /wanting a lease template with the idea I’d put what I wanted in there then have an attorney look it over; I just think having an attorney look at it is some peace of mind! Appreciate it all everyone

    1Reply
  • Eric Paul
    Atlanta, GA · Member since 2017 · 22 posts · 10 votes
    6y

    @Charlene Stovin I bought the lease template from BiggerPockets for under a $100.00. It included the lease agreement and all sub documents / addendums as well. Totally worth the money, and you can also deduct this expense on your taxes.

    0Reply
  • Rick Pozos
    Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
    6y

    It sounds like you need to take a property management course held by the local board of realtors. There are so many issues that can get you into trouble. For several hundred $$ you will get to know state laws and get a better feel for what you can and can not do. From the questions that you have asked, you need to get some qualified answers from experts on the law. Maybe get a property manager also.

    0Reply
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