Last week I gave a very detailed description of all of the documents you need when doing a lease option with a landlord (all 10 of them). This week I am going to cover all of the documents you need when you find a tenant/buyer for your lease option deal. In no particular order, let’s get started…
- Payment Policy – I make every tenant/buyer sign this form that states my company takes on-time rent payments very seriously. We start evictions on the 5th of the month and there are zero excuses for non-payment of rent. (If a tenant doesn’t want to sign this form that should be your first clue to find someone else.)
- Option Agreement – This document states I am giving the tenant an option to buy the house for X amount of dollars anytime within the next 12 months. (I would not go longer than 12 months because you can always write a new agreement if need be.)
- Property Maintenance Agreement – My tenants must sign this form that says they are responsible for the first $300 of any repair. And that I will cover all amounts over $300.
- New Tenant Information – This document explains to the tenant what mailbox is there’s (if it’s a townhouse), gives them my cell phone number for emergencies, tells them what day is trash day and anything else they need to know about the property.
- Lease Option Disclosure – This lets the tenant know that I am not the owner of the house and I may have an option on the house myself.
- Agreement to Hold Property – If I have found a great tenant who needs time to get the option money I will have them give me a $2,000 non-refundable deposit to hold the house.
- Lease With Option to Buy Receipt – This is a receipt they get at move-in day which shows all the money they paid (option money, first month’s rent) and where that money is being applied.
- Renter’s Insurance – A tenant must fax back this form to me proving they have renters insurance.
- Rental Agreement – I have them sign my iron-glad rental agreement which is separate from the option agreement.
- Property Disclosure/Disclaimer – I fill this out and give it to the tenant to let them know of any problems with the property.
- Move-in Condition form – On move-in day we walk through the property together and evaluate the condition of the property.
It may seem like a lot of forms, but if you use them all it will make your deals go a lot smoother, especially if you should ever get into any legal trouble. (Thankfully, I’ve never had any problems, knock on wood.)