Pitfalls of verbal leases…
If I were to take a non-scientific poll of landlords I know, I would say a majority of them operate without written leases. They simply go month to month on a verbal basis with their tenants. In the world of rugged individualism that comprises the small landlord property investor, the same old, same old that has worked for them year in and year out retains the steady preference over a written blank lease agreement…even if the written rental agreement spells out a strictly month to month rental arrangement. Some old school landlords feel, “why bother with a written lease?”
In our heavily litigious society, they are fooling themselves into thinking the simplicity of an oral agreement will always suffice. And I’m sure most have been financially burned at least once or twice due to not having a written agreement in place with their tenants. A written lease gives the landlord a great deal of legal protection, not to mention that a landlord can write the agreement in their favor on a number of important terms. And it’s so easy to simply download any number of free lease agreement templates to work off of…Let’s take a look at what’s included in a standard residential lease agreement.
What’s included in a free lease agreement
Besides the most basic of info, like who the tenant and landlord will be, the monthly rent and the security deposit being held by the landlord, a rental lease agreement also spells out when the rent is due, and what financial penalties accrue should the tenant miss the timely payment (late charges). It also should include who the exact residents of the unit will be, besides the tenant. These usually refer to the tenant’s immediate family members, but they could include non-immediate family members, or friends, if the landlord will allow them. Most importantly, it limits the overall number of people residing in the landlord’s unit during the duration of the tenancy period.
Utilities spelled out…
Other important parts of the lease include spelling out who is responsible for payment of different utilities incurred for the unit. As an example, if there is no separate heating bill for each unit, then traditionally, the landlord is responsible for heating costs. Conversely, each unit will certainly have their own electric meter, and tenants are generally responsible for their own payment of electricity. However, common area (hallways, exterior lighting) electricity is usually paid for by the landlord.
Pets and parking
Another key lease term is whether the landlord will allow any pets. It’s a good idea to state the exact pet(s) that will be residing at the residence. Usually, the landlord can collect an additional security deposit for dogs, in case of any damage done by them. Parking is another important element included in standard residential lease agreements. This will detail the exact number of on-site parking spaces allowed to each tenant. This will also include any parking garage privileges as well…In addition, terms like alterations are a critical part of a lease. The written agreement will note the procedure for a tenant to apply to the landlord should they want to make any physical alterations to their unit (for example, adding a loft bed to a bedroom).
Other items included in a standard lease include regulations involving allowable noise, disturbing other tenants, destruction of the premises, and the consequences of a tenant’s actions. It also includes terms relating to what maintenance the tenant will undertake on a regular basis (for example, will they be required to mow the lawn, shovel walkways, place their garbage in certain bins, etc.) In addition, the terms of how the lease will be terminated are also spelled out, both for normal termination (end of the tenancy period), as well as reasons for early termination by the landlord (for damage done by the tenant during their tenancy). Further, reasons for using security deposits to liquidate damages done by the tenant are also stated in the agreement.
Insurance responsibility is also an important part of any lease agreement. Writing out that the landlord provides no coverage for a tenant’s personal possessions is very important. A landlord may also require a tenant to obtain renters insurance for their personal possessions. Another key component of a standard residential lease agreement is allowing the landlord to gain access to the unit not only during emergency periods, but for non-emergency periods too, for simple inspections of the property, and to make basic maintenance repairs to the unit. Finally, there is traditionally a term involving whether the landlord will allow a tenant to sublet his unit. It can be a blanket no, or vice-versa. It can also be somewhere in between, allowing a tenant to sublet upon landlord’s written approval of the sub-lessee.
photos courtesy of houstonmortgagetexas.com, lawofficewalterjennings.com, tenantscreeningblog.com, zillow.com, ortak.com