Residential Lease Agreement

Many real estate investors become landlords at some point in their careers. A residential lease agreement should be in place before any tenant takes possession of your rental property. It’s the responsibility of the landlord to make sure all business details are covered in the residential lease agreement. In a very true sense, the landlord is the “boss” in this business arrangement, making him or her responsible for the rules that both the tenant and landlord abide by.

While all residential lease agreements can be written to meet the specific needs of the landlord and tenant (as long as these meet local requirements), there are certain items that need to be covered in all residential lease agreements.

  1. Name every tenant. The names of each and every adult that will be living in the unit should be specifically named on the residential lease agreement. This includes the full names of both married and unmarried couples. Each adult needs to sign the agreement. This enable the landlord to require any adult signing the agreement to pay the full rent if the other adults skip out or are unable to pay the rent.
  2. Limit the occupancy. The residential lease agreement needs to be specific that only the tenants that have signed the residential lease agreement and their minor dependents are entitled to live in the unit. It’s also a good idea to include a clause about how long and how many guests are allowed to visit. This gives you grounds to evict unintended tenants if relatives, friends, or subleases occupy the unit.
  3. Terms of the tenancy. Your residential lease agreement needs to state the time length of the agreement. Typically, the length is for one year and becomes month to month after that or is month to month from the beginning. This clause should also specify how much notice either the landlord or tenant must give to vacate the rental unit.
  4. Rents, fees, and charges. Clearly the residential lease agreement must detail the amount of the monthly rent, when it is due, how it is to be paid, and any late fees that are due for late payment. These details need to include the address personal checks or money orders are to be mailed to, if there is any grace period (or not), how late fees are calculated, and any charges if a check bounces.
  5. Deposits and fees. These are often governed by local regulations, so make sure you are informed about what you can and cannot charge. Security deposits are the most contested feed between landlords and tenants. To avoid hassles, be sure your residential lease agreement clearly spells out the amount of the security deposit, what costs it will be used to cover (cleaning, pets, damage repair, etc.), any nonrefundable fees, and how and when any unused portion of the security deposit will be returned to the tenant. Some states require that you disclose where security deposits are financially held.
  6. Maintaining the property and making repairs. A sub-clause to the security deposit of the residential lease agreement needs to include what your tenants’ responsibilities are regarding repair and maintenance of the rental unit. This clause typically requires the unit be kept clean and sanitary and that the tenant is responsible for repairs caused by abuse or neglect. It should also require the tenant to notify you in a timely manner of any defective or dangerous conditions. Additionally, it should restrict any modification the tenant can make to the rental unit such as painting walls or installing a burglar alarm.
  7. Access to the property. This is another one that is often governed by local regulations. Your residential lease agreement needs to specify when you can enter the property for repairs, inspections, to show it to prospective tenants, and other reasons. Include how much advance notice will be given and how it will be given.
  8. Illegal and disruptive activity. The residential lease agreement should include a clause specifically forbidding excessive noise, parking abandoned vehicles, illegal activities, and other rules you want enforced.
  9. Pet policy. Whether or not you allow pets is a business and personal decision. However, the residential lease agreement must be clear what the policy is and what fees (if any) will be charged. Be specific about what animals are allowed, how many, the size, the tenants responsibility to clean animal waste from the property, and any other restrictions you deem appropriate.
  10.  Legal document. The residential lease agreement is a legal document that must comply with a variety of ordinances and codes. These possibly include rent control ordinances, health and safety codes, occupancy rules, and antidiscrimination laws.

There are other clauses you may want to include in your residential lease agreement. These may include what types of businesses a tenant is allowed to run from the property, parking rules, use of common areas, and anything else specific to your rental property.

If you want to work directly with me on a residential lease agreement or any of the other investing models that have proven highly profitable, please join me at www.wendypatton.com/what-is-wendy-pattons-inner-circle.

Besides reading this article about a residential lease agreement, you’ll want to read this other useful information that I offer free. Please take advantage of it today.

Lease to Own Homes

Buying a House – The Time is Now

Rent to Own Homes

HUD Homes for Sale – Flipping Investors

Land Contract for Profits

Can Landlords Break a Lease Deal?

For Rent by Owner

Several times each week, I make the most current real estate investing information available to readers. This time, it’s about the residential lease agreement but the information I provide changes constantly to stay current with the market. Be sure to check back at: www.wendypatton.com. Also, get started learning how to do NO CASH lease options on real estate by picking up a copy of my bestseller book: Investing in Real Estate with Lease Options and Subject-to Deals.

By Wendy Patton

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