Once you’ve found a great Tenant, the next step is Creating & Executing a Lease Agreement. The Lease is the most important document Landlords use, so it’s vital to have a strong one in place before handing over possession of your rental unit.
Creating & Signing a Lease Agreement
A Lease Agreement is a legal contract between a Landlord and Tenant that outlines all terms of the rental relationship. It does two essential things for Landlords:
- Provides clarity for both Landlords and Tenants about roles and responsibilities and ensures that each party understands their role; and
- Protects Landlords if problems arise with the Tenant or property.
Given the importance of the Lease Agreement, you never want to give a Tenant possession of a rental unit without a written Lease Agreement in place. And, while any Lease is better than nothing, there are a few things to prioritize to make sure you have a strong Lease in place.
1. Lease Agreements Need to Be State-Specific
Leases need to comply with the laws of the state where the rental property is located. Each state has some unique rental laws and policies, so it’s vital to always use a state-specific Lease to ensure that you’re complying with – and not directly violating – any applicable laws.
For example, many states have specific regulations about security deposits – how much they can be, how they should be held, and policies for returning them. Your Lease will address the security deposit, and if it’s not state-specific, you might well end up violating applicable laws.
The bottom line is that each state has its own requirements for language, terms, and required disclosures. Landlords need a state-specific Lease to ensure they comply with all applicable laws.
2. Leases Must Cover All Basic Rental Terms
The next key for a Lease Agreement is ensuring that it covers all basic details of the rental relationship. These include the names of all Tenants and occupants; the Lease term; rent amount; late fee policies; security deposit information; maintenance and repairs policies; and pet policies.
You don’t want any of these key terms to simply be discussed in passing or handled with a handshake. Instead, you need all terms to be clearly addressed, in writing, in your Rental Contract.
3. The Best Leases Cover All of the Small Details Too
In addition to the major terms of the rental relationship, you also want your Lease to cover as many small details as possible – the more the better! Landlords want to think through every issue that could come up with the property and clearly state who’s responsible for dealing with that issue.
- Who’s responsible for pest control?
- Who will handle yard work and yard maintenance?
- Who is responsible for shoveling snow?
- Who is responsible for checking smoke detectors?
These are issues that will come up with rental properties. Avoid future conflicts or confusion by clearly addressing them in the Lease Agreement. This will help to build good Landlord-Tenant communication from day 1 and ensure that all property maintenance tasks are completed.
4. Your Rental Contract Needs to Be Readable
Finally, it’s important that your Lease Agreement is written in plain language that both Landlords and Tenants can read. Too often, Leases are written in legal jargon or legalese that doesn’t make much sense to either Landlords or Tenants.
While this might give you the protection you need in court, it doesn’t help with the second main objective of the Lease: ensuring that both parties know their responsibilities from day 1.
To get the most out of your Lease Agreement, it needs to be in simple language that both parties can and will read.
With that in mind, it’s important that you encourage Tenants to read the entire Lease. One way to do this is to meet with them and talk through key details of the contract. This will help to ensure that your Tenants are prepared for their new home and that you and your Tenants will stay on top of property maintenance issues.
5. Signing & Using Your Lease Agreement
Once you have a thorough Lease that both parties have read and understand, you’re ready to sign the Lease. The easiest way to do this is to use an electronic signing tool. With e-signing, both parties can sign the Lease with a mobile device or computer. Plus, once it’s fully executed, each party will receive a signed copy of the Lease to have and refer to.
This is much easier than meeting with Tenant, having them sign the Lease, and then making copies to distribute to all parties.
Finally, once the Lease is executed, make sure to refer to it throughout the tenancy. It’s there to help things go smoothly, so make sure you take advantage of it!
Create Your State-Specific Lease Agreement in Minutes
At ezLandlordForms.com, we make it easy for Landlords to create a great state-specific Lease entirely online in minutes. Our Leases are guaranteed to comply with all of your state laws, and they cover all of the big and small terms of your rental relationship. Plus, they include unlimited access to electronic signing and storage.
Visit ezLandlordForms.com to start building your Lease or to learn more.
Kevin Kiene, ezLandlordForms Founder/CEO
Kevin is passionate about helping others to become a better Landlord by providing tools and education to help them thrive.