What Makes a Good Lease for a Landlord?

A lease is a document intended to spell out a tenancy agreement for both landlord and tenant. It can be for an apartment, a house, a commercial building or any other type of property. If you’re a landlord, you want a lease agreement that’s fair to both you and your tenant, but which also securely protects your rights.

Rent

You need to specify exactly what the rent for the property is and when it’s due. Rent day should fall on the first of each month, and specify that the tenant is paying in advance for that month.

You also need to include in the lease exactly when the rent is classed as late. If you’re generous, this could be the fifth day of the month, especially if the start of the month falls on a weekend although some landlords begin requesting penalties as early as the second day of each month. State how you’ll accept payment which will generally be in the form of cash, check or money order. In the event of a check being returned for insufficient funds, specify the procedure. To protect yourself, state you’ll need the rent for the next 3 months in cash after which you’ll only accept a money order or cashier’s check. You might also invoke a late payment charge so clarify this and state how much it will be.

Security Deposit

You need to be specific on the amount of the security deposit and exactly what it covers. If it’s just a deposit, state that it’s not rent. If you expect a deposit, as well as the first and last month’s rent, put that in the lease, as well as timescales for returning a deposit. This will avoid any later confusion. Make sure that a tenant understands their deposit could be lost in the event of damage to your property.

Use and Condition of Premises

If the property is meant for habitation, the lease should say so with how many people it can occupy, whether pets are acceptable and whether or not subletting is allowed. The lease should also state that you and the tenant have undertaken a walk-through and agreed on the condition of the property. If you need to undertake any repairs or decorating, this should also be noted on the lease. Note, too, who is responsible for paying utilities.

Be sure you include the maintenance responsibilities of the tenant. You should also have a clause prohibiting the storage of hazardous materials of any kind. Make sure there’s also a clause that allows you reasonable right of entry to inspect the premises.

Vacating the Premises

At some point your tenant will leave. You need to put in the lease how much notice they should give and in what form. If they abandon the property, specify the penalty. The same applies for any damage you find when the tenant leaves and this should be deducted from the security deposit.

In the event of any damage being in excess of the security deposit, state that you reserve the right to sue and pursue the tenant for any subsequent attorney fees. This acts as an extra safeguard for you, especially if the tenant agrees to pay attorney fees on the lease.

Finally, you should note that the lease will be governed and executed under the laws of the appropriate state.