Tenants who want to lease or rent your property can be a great source of income for you. However, we all know that nothing comes without its ups and downs. Even with the best of intentions from both parties, things can quickly go south if there is no agreement in place between you and the prospective renter or tenant. There are lots of details involved with renting or leasing property and creating an agreement that outlines all of your expectations and rights as a landlord.
Whether you intend to lease property to a third party or sublet it to another user within your organization, there are specifics you need to set down on paper first. It’s much easier to avoid problems now than fix them later after they’ve already occurred. Here are some tips on how you should create rental and lease agreements with potential tenants:
What Is a Lease Agreement?
A lease agreement is a contract between a property owner and a tenant where the terms outline what the tenant is allowed to do with the property, how long they’re allowed to do it for, and how much they’ll pay to do it. In some countries, like the US, most lease agreements are for a set period of time, for example, one year. Some lease agreements, however, like the ones used in Europe, are open-ended, with no set end date. If a lease agreement is open ended, the tenant will pay a monthly rent amount, while a fixed-term lease agreement typically has a set rent amount that’s paid at the start of the term.
What’s the Difference Between Rental Agreements and Lease Agreements?
If we look at the definitions above, there are lots of similarities. However, they also differ in a few key ways. The main difference is the length of time the agreement is valid for. Rent agreements are usually short-term agreements, like a few months or a year. You can rent a property for a short period of time if you’re relocating for work or on vacation for a few weeks. A simple lease agreement is usually for a much longer period of time, such as six or 12 months. If you want to keep living in the same place for a long period of time, you’ll likely need to sign a lease.
Create a Checklist of The Things You’d Like to See In An Agreement
It’s always a good idea to put together a checklist of the things you’d like to see in an agreement. This will make it easier for you to ensure that all the details that are important to you are included. It will also help you to identify any issues or concerns that you might have so that you can address them before signing anything. Here are some questions you might want to consider including on your checklist:
- How much will the tenant pay?
- Is the rent or lease amount negotiable?
- What are the tenant’s rights and responsibilities?
- When are they expected to pay the rent?
- Who’s responsible for paying for utilities and other additional costs? What will happen if damage is caused to the property?
- What’s the notice period for both parties if they want to end the lease agreement?
Other things to include are:
- The names of the tenant(s)
- Occupancy limit
- Maintenance and repairs
- Notes on illegal activity
Establish Your Rights And Responsibilities As a Landlord or Property Owner
There are lots of ways to do this, but make sure you cover the basics. You’ll want to make sure you clearly outline what will be expected of the tenant in terms of how they care for and use the property. You’ll also want to clearly state how often and when you expect to be paid your rent. There are lots of things that could go wrong if you’re not clear about all of this from the get-go. You should also clearly state what will happen if the tenant doesn’t pay the rent or causes damage to the property.
What happens if the tenant breaks their lease agreement early? What happens if the tenants fall behind on their rent? You should also include details about any pets that might be living on the property. You’ll want to make sure that you include all of your expectations about things like hours of use, noise levels, and other aspects of daily living.
Please note that this isn’t legal advice. Consider consulting with a legal advisor if you have specific questions or to finalize your agreement.
Put In Place Safeguards For Any Potential Damages That May Be Incurred By The Tenant
At the end of the day, you are responsible for the property. That means you’ll be responsible for any damages the tenant or anyone that the tenant lets into the property causes. This can sometimes be a sticky situation, especially if you’re dealing with a tenant who doesn’t have the best track record when it comes to paying their bills.
It’s a good idea to put safeguards in place so that you don’t end up footing the bill for repairs or damage caused by the tenants. It’s also a good idea to include a clause that gives you the right to inspect the property periodically to make sure everything is being taken care of properly.
Make Sure Everyone Agrees With Everything Before Signing Anything
Once you’ve put everything together, make sure that the tenant signs each page and that you both initial every page as well.
Doing this will help to ensure that both parties agree with everything that’s written in the lease agreement. It’s also a good idea to keep a copy of the signed lease agreement in your records.
Create Your Own Lease Agreement Template With jSign
If you’re not a lease or house rental agreement expert, it might be a good idea to use a lease agreement template. This will make the process much easier and ensure that you don’t miss anything important. jSign allows you to create a lease agreement online with ease.
You can create your own lease agreement online by following these steps:
- Create an account with jSign. You will be directed to the editor where you can start creating your lease document.
- Add the details that are important to you and save it when you are done.
- Sign your lease agreement and have the tenant sign it as well.
- Keep a copy of the signed lease in your records.
As you can see, there’s a lot that goes into creating rental and lease agreements. The best way to make sure it’s done correctly is to make a checklist of the things that are important to you and then start from there. It’s also a good idea to keep it simple by using a lease agreement template and working with a legal professional to ensure you’re doing everything right on your end.