5 Key Elements of a Residential Lease Agreement
Ensure that you can live comfortably in a rental home, hashing out a residential lease agreement is necessary. Similarly, a residential lease agreement is needed for a landlord to make sure they can be at ease and protect their interests. In other words, how you handle the lease agreement sets the tone for the entire future relationship between a landlord and their tenants. This is where the relationship between the two needs to set off on the right foot, or both would have a ton of issues to tackle in the future that they would probably rather not deal with. To help prevent such problems, here are the 5 key elements of a residential lease agreement!
One of the key elements of a residential lease agreement is your renewal terms. Now, admittedly, this particular clause most often works in favor of tenants rather than the landlord. Without it, your landlord can, at any point, refuse to extend your lease. You must insist on including it if you want to live in your rental long-term. Particular care is required when setting the agreement for the new rental rates. If you do not specify anything in the renewal terms, your landlord can naturally increase your rent over time. Be especially careful if you are allowed to renew on a monthly basis, and your landlord refuses to work in rules about rent prices since this is one of the surest signs that they want to adjust rent as time passes. This means that, even with the renewal agreement in place, they have a way to force you out. Therefore, you should be ready to negotiate a new lease when your old one is about to expire.
Another of the key elements of a residential lease agreement is the pet policies tied into the property. Unlike the last one, this one is definitely in favor of the landlord rather than the tenant. Typically speaking, any mention of pet policies past simple allowance is a restriction on what kind of pets can be kept on the grounds. And there are some pretty good reasons to restrict some pets from getting into your rental. Hamsters and similar rodent pets can escape, and if there is a breeding pair, their population can explode. Some pets love to mark their territory, which means you risk having your property’s value damaged by their behavior. Still, you might not want to ban pets altogether. They are helpful for many things, such as trying to make a child comfortable in two homes or as emotional support.
Security deposit and rent payments
Obviously, the key elements of a residential lease agreement must also cover the details of the deposit and rent payments. The deposit is typically easily handled and isn’t hard to agree on. However, there is much to cover regarding rent, not just how much it should be. The renewal agreement will somewhat inhibit your rights to moderate rent prices as a landlord. However, specifying how you want to be paid, in cash or a wire transfer, is important. You, as a landlord, should ensure that you can get your money consistently and that your tenant knows how best to reach you to deliver their rent payment. Without this agreement, you’d need to get in touch with your tenants monthly just to confirm how you’ll be getting the money, making it hard to get your life on track for both parties.
Entry and inspection rights
No landlord is going to avoid inspecting their property now and again. However, this does infringe on the privacy of your tenants. Just imagine how disruptive and even invasive it sometimes feels to have a stranger in your home, and you’ll understand. Of course, the property is yours, and you are not exactly a stranger. However, to a tenant who is properly settled into a rental and plans to stay there for the long term the difference between it and a privately owned home is negligible. So, be mindful of your tenant’s needs. Besides, if you know how to choose a good tenant for your rental and make a good decision, this shouldn’t be an issue. Do, however, make sure to work your right of entry into the rental agreement. How frequently you can do it, and the entry rights of authorized repairpersons.
Agreements on the use, occupancy, and subletting of the property
This is a somewhat tricky one. Most landlords assume that a rental property will be used as a home. However, you have no guarantees of this. As a tenant, you might plan on using the property for a different reason, such as a home office where you will meet with clients or any other type of commercial use. That’s fine, but make sure to communicate this. You might need special permission from the landlord to conduct business on the premises. As a landlord, we advise you to specify whether you would be okay with this in the rental agreement. Another aspect of this element is the right to sublet the property. Typically, as a landlord, you want to stop such practices. If not, definitely make sure to get a good personal injury attorney to protect you from any blowback derived from a sublet individual getting injured on your property.
Now that you understand the 5 key elements of a residential lease agreement, you should also know why they are so important. Many of the essential questions in the relationship between a tenant and a landlord can be left unanswered without them. The tenant does not know what exactly the landlord wants or where their limits are. And the landlord cannot properly ensure that their interests and desires are met. This only causes friction and means that the relationship will likely end quickly and on a sour note. Most people want to properly cooperate with their tenant or landlord for a long time to benefit everyone. So, take the time to make the residential lease agreement the right way. It can save you a lot of future stress and paperwork.
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