- Real Estate
Rental Agreements and Lease Contracts: What You Need to Know
Before you sign or draft a renter’s agreement or lease contract, its important that you know what to look for, what to include, what to exclude and how to negotiate.
In a stricken economy, more and more families are facing foreclosure of their homes and turning to renting as a viable alternative to housing. Thus, the rental market has actually improved while other areas of the U.S. real estate market have faced significant downturns. Both renters and landlords alike, however, can become victims of a faulty rental contract.
Why the Rental Contract Is Important
The rental contract stipulates what a tenant can and cannot do in his rented home. If the landlord wants the renter to keep the yard maintained or be responsible for all or a specific portion of other home maintenance, this must be stipulated in the lease contract. The purpose of the lease is to clarify the responsibilities of the renter and the landlord alike. This protects the renter from falling victim to unethical landlords who make demands not included in the lease. It also protects landlords from tenants who make unreasonable demands or make a claim of verbal agreements that never existed.
Verbal Rental Agreements Can Be Misunderstood
Even if you are renting to or from a close friend or family member, a lease agreement can help both of you by clarifying any verbal agreement that the two of you have concerning the property and its uses. If you don’t want your renter allowing other individuals to move into the home without your prior approval, you can put this in the lease agreement. If, however, you expect your friend or family member to be responsible for home maintenance and repairs, ask that this be included in the lease--otherwise, it might not get done.
A rental agreement in writing provides you with legal protection in the event that the landlord or renter does not meet the terms he or she originally agreed to. Verbal agreements rarely stand up in court and almost never carry the same weight as a signed and dated piece of paper supporting your claim.
The last thing you want is to be stuck living in or owning a house, apartment or condo when a problem exists that you cannot readily fix due to a previous misunderstanding. Thus, you should ask for a rental contract to protect both yourself and your family members from emotional stress and potential financial ruin.
How to Write the Rental Contract
For landlords, its always a good idea to visit with a qualified real estate attorney when drawing up your lease agreement. The cost involved for an attorney visit is almost always worth the peace of mind that having a legally airtight rental lease will provide. Before you can begin, however, you must make a list of the things you want to include in your renters’ lease. Some sample lease aspects are as follows:
- The amount of rent you expect renters to pay
- The date rent is due
- Late fees and additional charges
- Maintenance renters are responsible for
- Subletting guidelines or prohibitions
- Whether pets are allowed
- Conduct required of guests
- Circumstances that would result in eviction
- Eviction procedures
Although it isn’t necessary to have a lease notarized to make it binding, doing so gives your contract with the renter added legal importance.
- How to Write a Lease Agreement for a House
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- How to Write a Lease Agreement: Draw Up a Lease Contract to Rent Out a House or Apartment
A lease agreement is a contract that protects the interests of all parties involved when a house or apartment is rented.
Negotiating Items In a Lease
Renters should take care to read a lease contract carefully before agreeing to sign. If you plan to rent, ask your landlord if you can take a copy of the lease home to review before signing it. You may also hire an attorney to take a look at the lease and determine if all the requirements the landlord is requesting are allowed in your state.
Make a list of any questions you have about the lease, and present these questions to your landlord. If any part of the lease seems unfair to you, ask the landlord to modify or remove it. Remember, leases aren’t set in stone until you sign on the dotted line. Until then, however, everything is negotiable.
Landlords should be willing to consider their renters’ requests to modify portions of the lease if they can see a legitimate cause for doing so.