One of the most important rules of rental property ownership is to never rely on a verbal agreement. Spoken agreements are difficult to enforce and nearly impossible to prove in court. Without a written rental agreement, crucial details can be misinterpreted or ignored.
A well-documented contract ensures clarity, protects both parties, and provides legal recourse if disputes arise, helping to prevent costly misunderstandings. A strong lease agreement safeguards your investment by reducing the risk of tenant disputes, unpaid rent, property damage, and unauthorized occupants.
By clearly outlining the rules upfront, you can minimize liabilities and common rental challenges. Additionally, a written contract gives you the legal authority to enforce lease terms, including the ability to evict tenants when necessary.
In this article, the property management experts at KRS Holdings will tell you all the information your lease should include.
What Every Rental Agreement Should Include
Believe it or not, you don’t need to be a legal expert to write a solid lease agreement for your rental property. Anyone can write a detailed and thorough agreement — with the right guidance.
Here is a list of the basic information all your leases should include:
1. Full Names of All Involved Parties
A rental agreement is a contract. In order for it to be legally binding, it should include the full names of all parties involved. This includes you, the landlord, and all tenants over 18.
Every adult that wants to live on your property should be included in the lease. Otherwise, you won’t be able to hold them responsible for paying rent or taking care of the property.
2. Property Address and Description
When writing a rental agreement, it’s always better to be safe than sorry. Being thorough and descriptive will prevent misunderstandings and disputes. To avoid confusion, your rental agreement should include the address of the property, as well as a detailed description of the leased unit.
This will ensure tenants understand exactly what spaces they’re renting and are responsible for. This is especially useful for preventing disputes between tenants when you own a multi-family property.
3. Key Lease Terms
No landlord wants to deal with holdover tenants. A great way to prevent tenants from overstaying their welcome is by clearly stating the duration of the tenancy on the lease.
Whether you’re planning to rent your property on a week-to-week, month-to-month, or yearly basis, stating when the lease starts and when it ends can prevent confusion and misunderstandings.
For fixed-term leases, such as monthly agreements, it’s important to define whether the lease will renew automatically, as well as the conditions for terminating the agreement.
4. Rent Price, Due Date, and Late Fees
Many landlords dread collecting rent. After all, no one wants to have to chase down tenants for payments. A great way to minimize late payments is to clearly state the rent amount and due date on the lease.
Simply stating that rent should be paid on the first of every month, for example, can avoid confusion and encourage timely payments. Some tenants may require some extra push to pay rent on time. That’s why it’s crucial for landlords to enforce late payment policies.
However, it’s important to note that grace periods, late fees, and any other additional penalties for late rent payments should be disclosed in the rental agreement. Otherwise, you won’t be able to enforce these terms.
5. Maintenance Responsibilities
Keeping your rental property in good condition is a shared responsibility between you and your tenants. But, if your renters don’t know what maintenance tasks they’re responsible for, they won’t be of much help.
To avoid costly repairs, you must outline both your and your tenants’ maintenance responsibilities in the lease. This way, tenants will understand their responsibilities and contribute to keeping your property in good condition.
Including emergency contacts, rules for submitting unexpected repair or maintenance requests, and guidelines on how to act on specific emergency scenarios can save your tenants' lives and help you protect your investment.
6. Security Deposit Policies
Security deposits provide landlords with a financial safety net in case of nonpayment of rent or serious property damage. However, they can also be the cause of many headaches and disputes.
To prevent common security deposit disputes, you must clearly state the amount of the deposit, how it can be used, potential deductions, and the expected refund timeline. This will not only prevent common misunderstandings but can also serve as proof of legal compliance in case of legal disputes.
7. Rules and Restrictions
Every property and every landlord are different. A rental agreement is the perfect document to outline the unique rules you have for your rental property. Here are some examples:
Noise Restrictions: You can specify quiet hours and add restrictions for loud activities such as parties or listening to music at odd hours. Additionally, make sure to outline the penalties for violating these noise regulations.
Subletting Policies: Specify whether subletting the unit is allowed and the conditions for it.
Smoking: You should specify whether smoking is allowed inside the property. If it is, make sure to add rules for handling cigarette waste and potential property damage.
Alterations: You must specify whether tenants can modify or renovate the property during their tenancy. If you’re willing to allow alterations, make sure to outline the conditions for doing so, such as requesting your approval beforehand.
Parking: If you own a multi-unit property with assigned parking spaces, adding parking rules will prevent many disputes.
Pet Policies: Whether or not you allow pets into your rental, you should clearly state it in your lease. If your rental is pet-friendly, including rules and regulations on the number, size, and breed of pets allowed can go a long way in keeping your property protected.
Guest Policies: You can add any restrictions on having guests over, including maximum duration of stay and notice requirements.
Bottom Line
If you’re thinking about renting out a property in Richmond, VA, you should learn how to draft a solid rental agreement. A well-written lease will help you protect your investment by defining key terms, preventing disputes, encouraging timely rent payments, outlining responsibilities, and providing legal grounds for enforcing the lease terms or evicting tenants if necessary.
By including the information outlined above, you’ll be able to write a detailed and comprehensive rental agreement. If you need help reviewing your lease agreement, contact KRS Holdings Richmond!