What Terms to Include in Your Lease Agreement

The 2019-census Bureau found that 36 percent of the population had rented a home at some point throughout the year. This is an estimated 122.8 million people. Despite the continuing pandemic, the US real estate market seems optimistic, but market maneuvering requires a great lot of care.

Rental agreements that safeguard both landlords and tenants are becoming more necessary with the popularity of renting out homes. You need to know what to put in a lease agreement.

Disputes from tenants are bound to occur if you are a landlord. The best solution to resolve these conflicts in court is to have a written lease agreement. But, do you know what basic terms should appear in the lease agreement?

Lease Agreement

Both lease and rental agreements are usually used interchangeably. But, the difference between the two agreements is the length of the contracts. While a rental agreement is a short-term contract of a month or less, a lease agreement takes six months or more. Both these agreements define the terms of the tenant's living conditions in your premises.

However, it is generally easier to terminate a month-to-month tenancy than a long lease.

How to Write a Lease Agreement

A lease agreement should include various terms that protect you and your property in case of anything. Therefore, it is essential to have an attorney present when writing a lease agreement for your tenants. There are numerous terms you could add to this agreement, but the basic ones include:

Contact Information

Under contact information, you should include the names and contacts of your tenants and yourself, the address of your property, or a description of the property if it doesn't have a number. For instance, if you lease a room, write, 'second room, first-floor bedroom.' Be clear and precise.

Duration of the Tenancy

Detail the length of the agreement, like a six months rental or a year rental. Include them if you have any agreement notice of tenancy termination with your tenants. But first, check with an attorney on specific laws regarding notice of termination for long-term lease contracts.

Rent and Security Deposits

Highlight how much you expect your tenants to pay per month and the modes of payment such as credit cards, rent checks, etc. Also, include the amount they should pay for any late rent payments- though it should not be excessive. If you aren't sure of the amount to charge for late fees, consult with your local building department for clarifications.

Utilities Included in the Lease.

Mention all the utilities you will provide with the lease contract, such as gas, heat, cable, etc., and clarify the tenant's responsibilities towards them. If you provide any household appliances, name them by a list, e.g., couch, bed, refrigerator, etc. Lastly, mention the utilities included in the rent and those not.

Damage to the Property

Highlight to the tenant that he is responsible for any damages other than the regular wear and tear. State that the tenant must return the premises to find it in excellent living conditions. State that the tenant should pay for damages to the property or the legal costs if the case reaches court.

Conditions of Tenancy

List what you expect and don't expect from your tenants—usually, these expectations include no illegal activities, smoking, or noise after a particular hour. Failure to do so can terminate the lease agreement, and the tenant also pays for the legal charges- under the landlord-tenant law.

Other basic terms you might also include in a lease agreement are:

The number of occupants/guests allowed on the property

• Landlords access to the property for repairs, maintenance, or inspection.
• All the required landlord disclosures, such as bed-bug history or lead-based paint.

Bottom-Line

Do extra research on what you need to put in the tenancy agreement. Remember to consult with your attorney before creating a lease agreement, even if it's only a one-page document.