Leasing a property to another person can be both an exciting and intimidating undertaking. You hope your new tenant will handle your property responsibly, pay their rent on time and make your life as well as the other tenants’ as trouble-free as possible. However, this is never a guarantee.
A well-written lease contract can safeguard the rights and interests of both the landlord and the tenant while preventing potential problems. By creating a lease contract that binds both parties (the landlord and the tenant), most conflicts can be avoided or, at least, addressed in an efficient and effective manner.
Here are crucial provisions that every lease contract must have.
The lease agreement must clearly address three important financial aspects of the contract. These include:
- The security deposit – The contract should indicate the security deposit amount, where that deposit will be held, the procedure for returning it and circumstances when it can be withheld.
- The rent – The contract should indicate the rent amount and its due dates. Any other payments such as applicable pet fees should be included in this clause. It is important that the contract outlines the acceptable rent payment methods such as check, cash or electronic.
- Late payments – Finally, this clause should mention something about late payments and the applicable consequences.
To eliminate any confusion and potential conflicts, it is important that the lease contract clearly articulates what the property will be used for. In the case of a residential property, it is important to indicate that the tenant shall not conduct any enterprise while on the property. The same applies to subletting the property to another tenant without the landlord’s knowledge and approval. Still on premise use, it is important to include a pet’s policy on the lease agreement. This policy can mention applicable pet deposit, additional cleaning fees as well as the responsibilities of the tenant regarding their pet.
Besides addressing and preventing potential disputes, a well-thought-out lease agreement can go a long way in ensuring a healthy landlord-tenant and tenant-tenant relationship. Find out how you can draft a sound lease agreement for your property.