I have recently purchased my first tri-plex and am working on getting my rental agreement documentation put together. My question is, am I better off having my attorney draft an agreement for me or should I use the free one provided by my local state Bar Association? Just curious to what many of you have done in the past! Thank you for any thoughts you have on this.
Take the one from the Bar to an attorney and have him modify it to fit your property.
Hi @Ryan Knutson , congrats on your tri-plex purchase. I looked into the same thing when I was starting out. The lawyer I talked with told me it would cost thousands for him to draft a new lease agreement and it would look similar to the standard one we have in our area. The fact that the one you are looking at is free could be a red flag but as long as it is prepared by landlord-friendly lawyers, that is the most important thing.
@Ryan Knutson my suggestion is to find a really good RE lawyer. if you have a lot to choose from find someone who specializes in landlord/tenant matters including evictions. Those guys will have leases on file that you can but for 300-500 give or take. It is 100% worth it in my opinion to do this. They have handled all sorts of landlord / tenant issue and evictions over the years and their lease will be far superior and tailored to the likes, dislikes of the local courts and judges. Remember just because someone is a lawyer doesn't mean they are an expert in the field you need, look for an expert in the niche.
Take the free one. Read it forward, backward, and upside-down. Don't understand something? Research it on Google, take notes, and continue that process until you know it inside and out. If you feel something important is missing, add an Addendum page to the back of it. Make sure tenant signs the lease and your addendum.
It's that easy.
@Ryan Knutson use the standard free one and add additional sections that you feel you want. It’s a learn as you go process so you may not know of anything to add at the start
@Bruce Woodruff thank you for your response. Will be looking further into it this week.
@Brad Hammond thanks for your response. I will be talking with the attorney and bringing this up as well. Thank you.
@Scott M. Thank you for your response. That is a very good point. I will be ensuring the attorney I find does specialize in this kind of work.
@Nathan G. Thank you for your response. That is a great point about the addendum, never thought of that but that is super helpful. Thank you.
@Chris Herrera thank you. Yes without a doubt it’s a learn as you go. This is my first go but very excited to get the first one under my bet and continue on learning. Thank you.
We collected copies of every rental agreement we could find from apartment associations, purchased books pertaining to real estate rental laws (for your area), searched the internet and we compiled everything together and created our own rental lease agreements. The lease agreement our tenants sign is about 24 pages and the rental agreements you get at office supplies and form apartment associations is about 3 to 4 pages.
I don't believe an attorney will ever create a decent lease agreement for a client because attorneys have some serious issues where regardless of how much you pay them they are not going to sit their butts in a chair for the several hours it really takes to create a rent or lease agreement. Every time we have some sort of issue with a tenant we will try to add a clause to cover our butts. For example. A few months ago we added a clause that pertains to who is responsible to eradicate bed bugs because we've had a few issues where tenants want us to pay to eradicate them and we contend that we rent the units when they are empty and it is the tenant who brings in the bed bugs and our pest control company wants $350 to $700 to eradicate bed bugs.
Incidentally, I get magazines from two apartment associations and I read every page of every copy and I am always surprised when I realize that I just learned something that is critical for keeping up with the laws. I also purchase a book every few years on Kindle to keep up with the real estate rental laws in California. It is amazing to learn things I did not know. For example, I've been renting properties for 55+ years and a few years ago I learned that you cannot give a tenant a Three Day Notice To Pay Or Quit the day after the tenant has not paid their rent on-time and I learned that you cannot tell the tenant the total rent they owe you on the same day you give the tenant the Three Day Notice To Pay Or Quit. When the tenant owes you money other than the actual month's rent e.g. the late charge, you have to send a separate letter to the tenant regarding any of those charges the day after you give the tenant the Three Day Notice To Pay or Quit.
So, what I did to make my life easy is; I developed a software application with MS Access 2003 where it is super simple to print the Three Day Notice To Pay Or Quit and when the software prints the notice the software automatically prints a separate letter with a date one day in advance of the notice and I send both the notice and letter at the same time. Not supposed to, but it looks better when we end up in court and you had better believe that judges pay attention to those what we think are insignificant legal requirements.
We started with a lease provided by the local Real Estate investors group and have been amending it over the years. As we experience new "issues" we amend the lease to address them, examples are use of recycling waste containers, the city fines owner if improper items are placed in the recycle container. We now have prohibitions against trampolines, pools, and grills on porches, due to insurer requirements. Explicit definitions of what is an emotional support animal and documentation required to obtain that status. Our lease is an ever changing document.