Lease agreements can be tricky and complex, especially if you’ll be renting out your property for the first time. A lease agreement should contain all the necessary clauses that will protect you, your property, and the tenant(s). Here are 5 things you need to know before you hand over a lease agreement to a tenant.
- A lease agreement is a legal contract
A lease agreement is a binding legal contract between you (as a landlord), and a tenant. By signing a lease agreement, you allow a tenant temporary use of your property. In return, a tenant agrees to make a monthly payment to the landlord known as rent income. All the names of tenants over the age of 18 should clearly be stated on the lease agreement, and their addresses should be included.
- Clauses of your lease agreement
While all lease agreements are not equal, there are specific clauses every lease agreement should have. For example, the amount to be paid every month, the due date, security deposit, a subleasing clause, late fees and allocation of payments clause, and so on. Here is an example of a late fee and allocation of payment clause:
“LATE FEE AND ALLOCATION OF PAYMENTS. In the event that any rent payment required to be paid by Tenant(s) hereunder is not paid IN FULL by the start of the SECOND (2nd) DAY OF EACH MONTH, Tenant(s) shall pay to Landlord, in addition to such payment or other charges due hereunder, an initial late fee as additional rent in the amount of 5% OF THE MONTHLY RENT AMOUNT. Further, a subsequent late fee of TWENTY DOLLARS ($20.00) PER DAY will be incurred by the Tenant(s) for every day payment is delayed after the 2nd day of the month.
- Hire a professional do it for you
Lastly, the way your lease agreement is drafted is going to set a tone on how your property is managed. If you’ve never drafted a lease agreement before, chances are you’ll make a mistake or forget important information. For example, there are certain terms that you’re not permitted by the law to add to your lease agreement. So, it’s highly recommended that you do it right by working with a professional. If you can’t do it yourself or don’t have the knowledge necessary, you have the option of hiring a professional to do it for you. Reach out to a company like https://www.rentgowalters.com/rentals/ and find out how they can help you.