Lease Contracts: Crucial for Owners of Houses for Rent
If you own or manage houses for rent, you should have lease contracts ready for discussion with the renters and ready for signing. These contracts should have been checked by a lawyer for possible provisions that violate state laws.
If you are just starting out as an individual real estate investor and renting out only one unit, you can find lawyers working with nonprofits that can check your lease contract for free. Some websites also offer lease contract formats that can be used in certain states.
Generally, lease contracts are prepared and signed to protect both the tenant and the renter. But since you, as owner or manager of houses for rent are the one initiating the lease agreement, the lease contracts are designed to protect your investments in case your renters vandalize your houses for rent or do not pay their rentals on time.
States have different rental laws, so it is crucial that you need to know if your state has specific laws about houses for rent such as rental limits, security deposits and evictions.
Your lease contract should contain all necessary details, including your name, address and contact numbers; the name, address and contact numbers of the renter; the monthly rent; amount of security deposits; the dates of monthly payments; the periods when security deposits are used and returned; and conditions for evictions.
The contract should also describe your obligations as a landlord or manager of houses for rent and the obligations of the renter. The contract should describe when the renter is responsible for repair costs and when the landlord should be the one spending for repairs.
The more detailed the obligations of both sides, the better. Among details that should be included are the payments of utilities, collection of rent, payment of bank charges in case of returned checks, payment of fines imposed by the town or city due to actions by the renter, maintenance of the lawn, payment for services such as garbage collection, repair of damages to pipes, repair of broken windows and payments for repainting jobs.
Lastly, before you allow your renters to move into your houses for rent, set a time for lease contract signing. This will give you and your renters time to flesh out vague terms in the lease contract. You can also give a copy of your lease agreements to your renters days before the contract signing so that they can review the contracts and be ready with their questions about the contracts.
