A rental agreement, simply put, is a legal document that protects your interests as a landowner. It checks any instances of confusion that may otherwise arise for tenants; helping property lenders to avoid conflicts. For a landlord, this written agreement acts as a tangible record that can be used as protection. It can protect you from incurring any liabilities. It also details the rights of tenants.
Rental agreements can be used for acquiring equipment too, but for the most part, they are solely used for renting out residential and commercial properties. After all, companies need business rental spaces just as much as families need apartments.
The simplest kinds of rental agreements are the ones that are enacted verbally. They only involve a sum that is to be paid on a monthly basis (usually on a fixed date). As a consequence of the rampant fraud that is associated with the global real estate sector nowadays, all real estate affiliates strongly urge both property owners and tenants to commence their property lending/receiving relationships. They advise you to do so with codified – on-paper – agreements. That way, you mitigate the risks associated with these undertakings.
Now as a landowner, you are allowed to create your own personalized rental agreement in most territorial jurisdictions. Consider this post your one-stop solution to getting it right in the first attempt. Read on if you’re contemplating advertising your rental property in the open market.
Conduct Research Thoroughly
In the United States, there isn’t any format for a standardized rental agreement issued by the federal government. Almost every state has its own regulations for dealing with real estate rentals. For starters, you need to know the rules which govern your particular neighborhood.
You might come under a state general law for towns and counties that dictates tenant-landlord relationships for overseeing procedures. These procedures typically include evictions and debt settlements. To take advantage of these local regulations, you first need to become cognizant of the formal channels of authority. You also need to learn about their operational procedures before leasing your property.
You might want to request a copy of all applicable laws from a local housing authority as well. These provide instruction on everything you need to know about Health and Safety Laws (Lead Paint Acts), Security Deposit Acts, Rent Control Laws, Mobile Home Acts, Asbestos Acts, and Landlord/ Tenant Acts etc.
Browse Rental Agreement Templates Online
Because if you can’t get in touch with your local post or government office, you can easily retrieve a soft copy of a standard rental agreement template (as approved by your state) if you look it up online.
Nine of the 50 American states (Alaska, Arizona, Kansas, Kentucky, Nebraska, New Mexico, Oregon, Virginia and Washington) have their own standardized rental agreement form formats that you can find on public sites. You may use them for renting out your residential or commercial properties. You can also visit many DIY law websites to generate an automated agreement form, though these portals may charge you a small token in subscription fees.
Create A Detailed Draft
Once you have the right template in place, you need to create a detailed draft to go along with it. In this draft, you will have to mention all the facts pertaining to the rental property. These facts include the address, owner’s name, owner’s address, and property manager’s address. Also, you need to specify the mode of payment, security deposit requirements and fee policies that you want the tenants to follow. Add important information like the duration of the notice period which needs to be fulfilled for agreement nullification.
Please note that rental agreements are usually only valid for a short (month-to-month) term. For longer durations, use a lease instead. Leave the renter’s information to be filled in later for convenience.
Outline The Repairs And Maintenance Process
For dealing with any future requirement of conducting repairs or maintenance work on your rental property, you need to jot down the exact process for the tenant to follow. You might need to check up on the legal laws pertaining to the timeframe that you are required to complete the repair work.
Also, you need to pen down things like the kinds of repairs that will you be responsible for. Some landlords opt to be held accountable only for external repairs, leaving tenants to take care of the interiors.
Define The ‘House Rules’
Before renting out your property, use the top tips for screening tenants. Once you find trustworthy individuals, it is wise to lay down some ground rules for prospective tenants. For instance, you may not want to allow your tenant to make use of the property’s backyard or roof – or even the front porch. In such cases, you need to specify these conditions to tenants beforehand. Any rules about pets, number of residents, subletting, common areas or parking etc. should also be communicated (in writing) in advance.
Also, you need to specify who will pay for utilities like electricity, phone, cable and internet. If you want to enforce a particular code of conduct on the premises, it is also well within your rights as a landlord to do so. Consider (typical) clause inclusions like ‘no loud music after X hours’ in the rental agreement. In doing so, you ensure that your tenant is on the same page as you.
Hire A Lawyer To Review It
Lawyers are expensive – and so the entire reason why people may be tempted to draw up a rental agreement on their own is to avoid their exorbitant fees. Nonetheless, getting an expert opinion on this matter comes highly recommended.
As mentioned above, there are many variations in law, depending on the neighborhood where your rental portfolio or property is located. So if you decide to consult a lawyer to go over your drafted rental agreement, the effort might pay off in the long run.
Do proofread your agreement for any typological errors or missing information prior to submitting it for review. And if the lawyer offers any suggestions for making a textual amendment, you would do well to consider them.
Advertise Your Property
On the internet, you can find many property advertisement portals. They enable you to ‘list’ your house or apartment for attracting suitable tenants. Their online prevalence comes as the ensuing remnant of a trend which manifested itself at the turn of the century in the United States and parts of Western Europe – and which has now ‘enveloped’ even the developing countries of North Africa and South East Asia in its wake.
In Pakistan, Bangladesh and Tunisia, for instance, sites like Prop.pk allow landowners to promote their property options for instant rental adoptions. And with the advent of video surveying and appropriate home loan sanctioning features on these platforms, it may only be a matter of time before the real estate sector undergoes a complete relocation from the material plane to the virtual. Armed with a well-crafted rental agreement, the future will certainly bode well for you (at any rate); if it’s earning a steady income through tenants that you’re interested in!