If you’re getting ready to rent out your home, apartment or another type of property, whether you plan on considering potential tenants who are searching for terms like “houses near me to rent to own” or those who are looking for a standard monthly or yearly rental, it’s important to understand the basics of a good rental agreement before moving forward.
You’re likely to attract a big pool of potential renters as analysis of US Census Bureau data by the Pew Research Center found that more households are renting than at any point over the past 50 years. But no matter how great that ideal tenant looks on paper and otherwise, an expertly crafted rental agreement can protect you from potential pitfalls.
Names of All Adult Tenants
Each person 18 and over living in the rental should be listed in the agreement as tenants. This makes each individual legally responsible for the terms, including how the property will be properly used and the monthly rent. That means, for example, if two roommates are living together and one skips out or is unable to pay, you can legally seek the entire rent from the other. If any of the tenants violates a significant term in the agreement, the rental pact can be terminated for every individual.
The Rental Term
The rental term indicates the dates the rental contract is valid for. The dates should be specific rather than incorporating specifications like “the agreement is valid for one year.” Include the exact date it begins, with the month, day and year, in addition to the exact date it ends. Many yearly arrangements automatically convert to month-to-month after the end of the original term, so you’ll want to consider that too.
The Rental Amount and When It’s Due
The agreement should detail exactly what the rent amount is, when it will be due, and how tenants should pay it. It’s critical to identify the total amount of rent due during the agreement term, and then to divide this amount into monthly installments. An example could be: “Leasee agrees to pay $12,000 as rent, to be conveyed in this way: $1,000 per month due on the first day of the month, with a late charge of $75 as additional rent for each payment over five (5) days late. Transfer of the security deposit and the first and last month’s rent is due upon the signing of this rental pact by the tenant.”
Agency and Return of Deposits
A proficiently written rental contract will also name how much of a security deposit is needed, what the property owner will use those funds for, and how the deposit can be collected by the tenant when the rental agreement terms end. All this is done to minimize legal troubles after the tenant leaves the rental location. The deposit might be used to repair any damage that was incurred. However, the security deposit is not often permitted to be used for any owed rent that was not paid. The rental deal might additionally include when and in what manner the security deposit will be returned to the tenant. This stipulation should consider potential deductions such as carpet sanitation or the unauthorized holding of pets in the rental unit.
While landlords have responsibilities like ensuring that a broken hot water heater is repaired and that the place is livable in general, tenants have obligations that should all be incorporated in the treaty. For example, the tenant must keep the property clean and become financially responsible for any destruction caused by reckless abandon or misuse as well as inform landlords of potentially hazardous conditions.