If you own more property than you need for personal/family use, you have an opportunity to make money while solving a housing problem for someone else. The housing market is tight right now, and millions of Americans need to rent due to short supply of homes for purchase or unaffordable real estate prices.
If you have considered or are planning to take on one or more tenants, it is well worth your time and effort to ensure that you do things properly. Even if the tenant is a friend or family member, having a written, legally sound lease could prove to be critically important in protecting your rights/property and preventing problems. The elements of a good lease are described below.
Clear Policies And Provisions About Rent And Other Fees
Nothing should be assumed or ambiguous when it comes to money changing hands. You need to be clear, in writing, about monthly rent, security deposits, and any other costs that the tenant will be responsible for.
Include not just how much the monthly rent will be, but also:
· When rent is due
· Any grace period for late rent
· Fees/penalties associated with late rent
· In what form rent needs to be paid and to whom
· What exactly you will be providing in exchange for rent (living space, certain utilities, etc.)
Rules About Behavior, Pets And Guests
If you’ve ever had a bad roommate, you know how difficult they can make your daily life. That’s why you need to be clear in your lease about any tenant behavior that could others on the property, including you. This includes issues like:
· Whether pets are allowed
· What level of noise is permissible and during what hours
· Activity going on outdoors or in communal spaces
· How many guests the tenant can host at once and how long they can stay
· Alcohol and drug use
Lease Duration And Penalties For Violating Terms
How long does the lease last? Is it six months, a year, or month-to-month? Is the tenant allowed to sublet to others? Can the tenant rent out their apartment on Airbnb? What is the financial penalty for moving out before the lease has expired? How much notice does the tenant need to give about plans to vacate?
These are just some of the many questions that should be addressed in the lease in order to avoid legal, financial and logistical headaches.
Need Help Drafting Your Lease? Contact An Attorney.
A legal document is only valuable if it is also enforceable. And the more legally sound it is, the better it will protect you against the types of issues you are most likely to face.