As a new landlord making a lease agreement can seem daunting. How do you craft an effective lease? How will it help you? What provisions must it contain? Can a verbal agreement stand in lieu of a lease?
By understanding the importance of a lease and how it protects the landlord and tenant, you can maximize its benefits.
What is a Lease?
A lease is a legal document that contains the agreed upon terms and conditions between a landlord and tenant for a specific period. What’s more, it protects both the landlord and the tenant from potential disputes.
Why is a Lease Important?
Since a lease is considered as a legal document, it can be considered evidence in court proceedings. However, if agreements are made verbally, it can be hard to prove in court.
So, having a written document is recommended since it will provide the terms and conditions in detail. Furthermore, if a conflict occurs and the tenant takes the matter to court, it’s also easier to disprove wrongful statements.
A solid lease agreement will ensure both the landlord and the tenant will follow through on their responsibilities and respect each other’s rights.
What are the Steps to Writing a Lease?
Writing a lease must be done in an organized manner. You must tailor it to fit your specific property and needs as a landlord. Use simple and straightforward language and most importantly, make sure you refer to Florida’s property and landlord-tenant laws so each condition is legally compliant.
Here are steps you can follow when creating your lease agreement:
Format and Outline the Lease
Construct your lease in an organized fashion. Use headers so it’s readable and easy to locate specific sections.
Here are some of terms to include in your lease agreement:
- Tenancy term
- Rental price
- Security deposit and related fees
- Description and location of the leased property
- Tenant duties and rights
- Landlord duties and rights
- Occupancy limits
- Utilities provisions
- Disclosures and important policies
- Lease termination
List the Provisions in Your Leasing Agreement
Study the leases you want to emulate and think about the provisions that you want to include in your own lease. You can include policies on subletting, pets in rentals, limits on guest stays and whatever else you deem important.
Provide Detailed Clauses for Each Header
You’ll need to provide organized, understandable and detailed descriptions of each clause. This will make it easy for tenants to follow while also providing everyone with more legal protection should an issue arise down the line.
Here are examples what clauses and details you should include in your lease agreement:
This must contain the correct description, address, property name and specific rented area.
The tenant(s) complete legal name and contact information must be found in the leasing agreement. You must also, as the landlord identify your full name and contact information.
The length of the rental period must be specified in the lease. It must have a full date to limit confusion and prevent a tenant from overstaying.
You must state the procedure for renewal. You should indicate how many day’s notice a tenant need to provide to inform you they wish to either terminate or renew the lease at the end of the tenancy. Usually, this runs from a 30 to 90 day’s notice depending on the tenancy period.
One of the most important details to include in any lease is the rental price and the due date for payment. This must be specified with the allowed grace period, if the landlord permits one. The modes of payment must also be detailed so the tenant understands the available payment options.
If there are late payment penalties, this must be covered in this section of the lease. The tenant must know the financial consequence for delayed payment or bounced checks. Notice period and the grounds for eviction must also be put into writing. The tenant needs to understand the consequences of failing to pay or violating the terms of the lease.
Every tenant submits a security deposit to a landlord upon moving in. This is to pay for potential damages that could occur during the occupancy. The damages must result outside of normal wear and tear though.
However, property damages can be a general term, Therefore, tenants need to have a clear idea of what constitutes property damage. This way, there will be no conflict over potential the deductions made from the security deposit.
Once the tenancy period ends, the landlord is required to refund the security deposit to the tenant. Once again make sure you provide information about the procedure that are compliant with the Florida rental laws.
This part of the lease should identify who is permitted to be staying in the rental property. It will include strict policies on the length of period that a tenant’s guests can stay over. It will also include a policy on subletting.
Tenant Duties and Rights
This section must state what responsibilities a tenant is expected to perform. It will also mention their specific rights.
Examples of rights and responsibilities that should be included in this section would be, reporting property damages, even minor ones, keeping the rental unit reasonably clean, and the tenants right to privacy.
Landlord Duties and Rights
Along the same lines as the duties and rights of the tenant, landlords have different sets of responsibilities and are entitled to certain rights. This must also be spelled out on the lease agreement.
Examples of landlord rights and responsibilities can include, addressing property maintenance, performing repairs within a reasonable time frame, and provide tenants with reasonable notice before entering the unit.
Check Local and State Laws
Leasing agreements will differ based on state, local and municipal laws. As a landlord that you must comply with these laws and stay informed of any changed to them. Should there be changes, you may need to update your lease agreement.
The lease agreement must contain the signatures of the all people named in the lease agreement. The date of the signing must also be clearly indicated on the lease. By signing the lease all parties acknowledge that they’ve read it and agree to its terms.
Initially, creating a solid leasing agreement may sound intimidating but breaking it down to manageable sections will help you streamline the process. Just follow some of the recommendations and you’ll have a good lease in your hands!
If the process still seem intimidating consider hiring a trusted Florida property management company to help you draft the agreement and oversee the day-to-day management of your property.
The Listings Real Estate Management company can help you with all your leasing and property management needs!