Guide to Making a Solid Lease Agreement for Your Rental Property

If you are a landlord, you must understand how to draft lease or rental agreements. This legal document binds the landlord and the tenant. It's a guide for rental rules, conditions, provisions, responsibilities and rights.

In this post, we will go over how to make written lease agreements while staying compliant with local laws and landlord-tenant laws! Keep on reading!

What is a Lease & Why is it Important?

A written lease agreement is a document specifying policies, stipulations and disclosures of the rental unit resembling a contract. It is the legally binding agreement between the tenant and the landlord. Leases typically cover a term of six months to one year.

A residential lease agreement is a powerful document that can hold power in a courtroom. Should conflicts arise, you can refer to the leasing agreement to help you fight your case. If you only have a verbal agreement with the tenant, it can be difficult to defend your case.

You might think that your relationship with the tenant will always be smooth sailing. However, as a future protection, a solid rental agreement aids in clarifying the conditions surrounding the residential property.

While it may be easy to look up and copy lease agreement templates and samples from the web, creating your own allows you to customize it to you and your tenants own needs.


Critical Things to Include in a Leasing Agreement

The following are the critical elements to include in a rental agreement:

1. Title

Put "Lease Agreement" on the first page of the contract. Then, include headers to differentiate different sections of the lease. This will make it easy to scroll and look up specific topics.

Some topics you can discuss include in the lease agreement:

  • Leased Property
  • Term
  • Monthly Rent
  • Utilities
  • Security Deposit
  • Occupancy
  • Rights and Responsibilities of the Tenant
  • Rights and Responsibilities of the Landlord
  • Required Disclosures
  • Termination of Leases

2. Provisions and Detailed Clauses

Next, take time to analyze the vital points you want to mention in your lease agreements and provisions and label them per category. Make sure you put in adequate information for each clause. The clearer the details, the easier your lease agreement will be understood by the prospective tenants.

Here are the provisions and detailed clauses you may consider including:

1. Leased property

Identify the property, tenant and landlord. Include the following in the lease agreement:

  • Property name and address
  • Property description
  • Zoning type
  • Tenant's full name
  • Tenant's contact information
  • Landlord's full name
  • Landlord's contact information

2. Rent Terms

This section should offer information on the rental period.


3. Monthly Rent Amount

This clause provides details on rent price and rent payment date. It also gives information on modes of payment such as cheques, electronic or money order.

4. Utilities

This gives clarity on who is responsible for paying for the rental's utility bills.

5. Security Deposit

This clause gives information on the security deposit, such as the amount of deposit a landlord may collect and where it will be stored.

When the lease ends and there are damages outside of wear and tear, landlords may deduct the cost of repair from the security deposit. You can outline the differences between wear and tear and excessive property damage so the renter is able to differentiate between the two.

The return of the deposit must be done within a specific number of days. Tenants must know when they can expect the refund to take place after the tenancy ends.

6. Occupancy / Subletting

This topic will detail who is permitted to stay in the property, as well as the how long guests are welcome to visit. It also mentions if subletting is allowed.

7. Rights and Responsibilities of the Tenant

Under this clause, here are some of the things you can include:

  • Privacy rights.
  • The tenants being responsible for keeping the unit damage-free.
  • Restrictions, such as not changing the paint or wallpaper without authorization from the landlord.
  • Whether tenants are required to have renter's insurance or not.


8. Rights and Responsibilities of the Landlord

Under this clause, here are some of the things you can include:

  • The landlord's duty to keep the unit in a state of habitability.
  • Repair time frame when tenants report maintenance issues.
  • Property entry.
  • Notice period prior to property inspections.

To ensure you're abiding by the laws, we sure to verify the landlord-tenant laws for accuracy.

9. Disclosures

These are state-required and must be mentioned in the lease agreement. Tenants must be aware of critical facts, such as the presence of lead paint or radon gas in the home.

10. Lease Termination

Under this clause, cancellation of the lease term is discussed.

It answers questions on penalties, offers alternative remedies and states the allowable period for early termination. It also gives information on legally justified reasons for a landlord to terminate the lease agreement, including failure of the tenant to pay the rent, excess property damage or violation of the law.

3. Signatures

The lease agreement is a legal document. Therefore, it must contain the signatures of all parties, as well as the date of signing.


4. Addendums

An addendum is also known as an appendix. These can be additional items that landlords can attach to the lease agreement.

You can talk about appliances included with the rental, property abandonment and its associated penalties, pet fees and extended absence of the tenant.

Bottom Line

A lease agreement is crucial. Knowing how to make one from scratch will serve you and your tenants well. Once you have a ready one at your disposal, you can use it repeatedly and tweak it to match the needs of different rental units or tenants.

Creating a lease may initially look complicated, but as long as you know what provisions you want to include and follow the law, it shouldn't be too difficult.

If you have questions, or want more information, contact TE Johnson & Sons today!

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