With the market being a little more than what some would call crazy, some people are taking advantage and selling their homes while there are buyers paying more than asking and finding themselves renting for a while. The reasons for doing this can vary but if this sounds like you, we want to be sure you know some things about the rental agreements. This information is the same if you are thinking of becoming a landlord. You will need to prepare a customized rental agreement. The most common issues come from when a landlord downloads a generic agreement off the internet and doesn’t spend any time customizing it to the circumstances around the agreement or the property.
Tenancy Period – There is a basic difference between a lease and a rental agreement. A lease typically expires in a year and will need to be renewed annually. On the other hand, rental agreements auto renew each month until the tenant or landlord terminates it.
Rent Policy – The rent policy should be specified in the rental agreement or the lease. It should include the following:
- The exact amount of rent due and the exact time period
- Acceptable and unacceptable payment methods
- Conditions related to non-payment or late payment of rent
- The amount of late fees and when they will apply
Security Deposit – Many jurisdictions have put a limit on the maximum amount of security deposit that landlords can ask for. If you have a questions, check with your local property management legislation. Make sure the terms and conditions are clear, to avoid future disputes. You should outline where the security bond will be held and how interest will be disbursed if it is held in a bank.
Number of Occupants – Your rental lease, as signed by all adult tenants, should specify how many total adults and minors can reside in the unit – and list their names. You should keep a record of identification and other necessary documents on each of these residents.
Dealing with Pets – Pet bond deposits are a good idea if pets are allowed in the property. In this manner, you will be able to recover the cost if the pet causes any damage to the property. You will need to check with your legislation to see if it allows for the tenant to make a separate pet deposit over and above the mandatory security deposit.
Responsibility for Maintenance – Clearly outlining the client’s responsibilities with regard to property maintenance and repairs is critical. These responsibilities depend on the type of property. For example the agreement could state that the tenant is responsible for lawn or pool maintenance in a single family home.
Right of Access – Right of access for a property manager can be a cause of dispute if not clearly outlined in your agreement. Refer to the local property management law first regarding the amount of advanced notice you are required to provide the tenant before you can access the property.
Restrictions – Another important item to note in the agreement are the restrictions imposed by the rental premises. Examples of this could be no illegal activities, smoking or pet breed restrictions.
Parking Regulations – There are important rules and regulations about parking and use of common areas that should be in your agreement. Keep in mind the tenant’s rights when setting up the agreement. Your rental agreement must comply with all relevant laws including rent control ordinances, health and safety codes and anti-discrimination laws.
For more information about these rules and buying, or renting, please reach out. We look forward to being your real estate expert of choice for all of your needs.