The terms “lease” and “rent” are typically used interchangeably, but Pediaa shows that they’re actually different. A home lease agreement is long-term, spanning usually 12 months. Meanwhile, rent is a short-term agreement, typically around 30 days. So to lease your home is to agree to a tenant using it for the long term. Because of this, you’ll want to find the right tenants for your home.
To do this, you should issue rental applications to interested parties to more effectively screen them to see which among them is the best fit to get the property. Our Free Rental Application Forms writeup mentions that though every landlord has their own rental application process, there are some common steps — the final one being signing a lease.
It’s important for tenants to read through the home lease agreement you’ll provide. But you, the landlord, should also be aware of what you put in the contract. After all, it’s a binding contract that can be enforced in court, containing important details, from who the tenants are to who’s in charge of repairs.
So to create a home lease that covers all bases, below are crucial items it should contain:
Names of tenants
Every adult who will live in the house should be named as a tenant and sign the lease. This means they’ll all be legally responsible for all terms — and because of this, you can legally seek the full rental payment from other tenants if one skips out. Or if a tenant violates a term in the agreement, you can terminate the contract for everyone, not just the offender. Aside from their names, you should also have the tenants’ contact information, such as personal and work phone numbers and email addresses.
The lease should also contain an occupancy clause. This states that only the tenants and their minor children are allowed to stay in the house. If there are guests, they should stay for only a set number of days. Occupants, the minor children, and guests are not parties in the contract and don’t have any legal obligations toward the landlord. However, tenants are responsible for the occupants’ actions. If a tenant subleases without notifying you, this can be grounds for eviction.
Lease term length
A lease should have a clearly defined term or length of time that the contract lasts. At the end of the term, the concerned parties can decide to renew the lease. However, you should also consider including clauses that answer to situations where the tenants decide to leave before the end of the lease. Some options include allowing them to terminate the agreement early as long as they give adequate notice and pay termination fees, letting them sublet, or letting them assign the lease. If they simply leave before the end of the lease without doing any of the options, then they’re legally still responsible for paying the rent for the remainder of the term.
Your lease should specify the amount of rent, when it’s due, and how it’s to be paid. Some details to spell out are acceptable payment methods, charges if a rent check bounces, and late fees if rent is paid beyond a given grace period. You may allow tenants to pay ahead of time if you choose a monthly over annual rent payment. It would also be a good idea to have a clause about rent increases in cases of increased utility costs and property taxes. But before you do change the amount of rent due, remember that you’ll need to provide your tenants with a written notice.
Security deposits and fees
Security deposits, or damage deposits, are refundable. The Balance describes this as the amount of money a tenant pays upfront to secure the use of the home you’re leasing. The tenant gets the money back if the lease ends and leaves the house in good condition. Leaving with any property damage gives you the right to keep some or all of the deposit to get it fixed. It’s important to clearly state in your contract how you may use it (such as for repairs), and when and how you’ll return the deposit after any deductions when the tenant moves out. Meanwhile, fees are nonrefundable and may be used for cleaning or allowing pets.
Repairs and maintenance policies
When something goes wrong at home, what happens and who takes responsibility? To prevent any rent-withholding problems and arguments over security deposits, you should put down repair and maintenance policies. An article on AskMoney explains that the lease should clearly divide the responsibilities of maintaining the home between the tenant and the landlord. As the landlord, you’re responsible for making necessary repairs to the home, but you should state in the contract that tenants should tell you when repairs are needed. Outline exactly how and when you should be notified of any maintenance problems that aren’t from normal wear and tear.
Rules and policies
If you have a rule or regulation that’s so important that you’d evict someone for violating it, then you should include it. These can include banning illegal activity, such as drug dealing and use, and gambling, to limit your potential liability. Excessive noise and property damage are other things to consider as well. Sometimes, instead of completely banning something, you can regulate it. For instance, you can limit smoking by writing down in home lease agreement, where and what tenants can smoke. For pets, you can prohibit them (except service and emotional support animals), or have policies on what kinds of pets you allow, and that tenants should keep the yard free of animal waste.
Required landlord disclosures
It’s important to disclose certain information on the lease regarding your house. For one, the U.S. Environmental Protection Agency (EPA) says landlords are required to write down any known information on lead-based paint or lead-based paint hazards concerning the house. Aside from these, you should also provide an EPA-approved pamphlet — called Protect Your Family from Lead in Your Home — on identifying and managing lead-based paint hazards. Other things to disclose include deaths in the home, water damage, and missing items like kitchen appliances and water heaters.
A home lease is a highly practical document that sets the expectations on how a tenant is expected to use and maintain the house well.