Are you wondering how to write a lease agreement? Many regard a lease agreement as the foundation of a rental property business. However, creating your lease agreement from scratch can be difficult if you self-manage your rental properties.

To ensure that they are robust enough to enforce with your renters and in court, should a landlord-tenant conflict arise, lease agreements must contain much information.

For this reason, it’s essential to understand the fundamental procedures for drafting a solid lease agreement if you want to keep your rental property business effective.

If you need help drafting a solid lease agreement, this article contains valuable tips. Let’s review them. 

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What is a Lease Agreement?

A lease agreement is a legal contract that outlines the terms and circumstances of renting property between a landlord and a tenant.

While rental agreements usually specify a month-to-month rental length, a lease agreement is typically used for long-term leases lasting more than six months. The Professional Property Management Group of Northern Virginia can guide lease terms.

Lease arrangements are standard for both residential and business rentals. After the first term of the lease expires, there is usually an opportunity to renew it.

Leases will differ depending on the demands of the property, owner, and tenant. The majority of leases will include basic information such as:

• Description of the property
• The agreement’s duration
• Rental cost 
• Consequences of nonpayment

Leases are necessary when renting a property since they outline the landlord’s and tenant’s responsibilities and expectations. Lease agreements are required in various states. Even if they are not needed, they will assist both parties in protecting their interests and avoiding conflicts.

Essential Things to Include in a Lease Agreement

Every rental agreement or fixed-term lease should state whether it is a rental agreement or a lease. Rental contracts are typically month-to-month and automatically renewed unless cancelled by the landlord or renter.

 Leases, on the other hand, are usually for one year. So your decision will be influenced by how long you want the tenant to stay and how flexible you want your arrangement to be.

Rent

The terms of your lease or rental agreement should include the rent amount, due date (usually the first of the month), and preferred payment method, such as mail to your office. 

Clarify specifics like the following to prevent confusion and prevent issues with tenants:

• Acceptable forms of payment (such as personal checks only)
• If there is a grace period, the length of it and the amount of any late penalties that will be assessed if the rent is not paid on time
• Any fees associated with bounced rent checks.

Maintenance and Repairs

By clearly defining your and the tenant’s obligations for maintenance and repair in your rental or lease agreement, you can avoid headaches with rent withholding and other issues (especially those involving security deposits).

The tenant must maintain the rental property’s cleanliness and sanitization and compensate for any harm caused by abuse or neglect.

A clause stating that the renter must notify you of any unsafe or faulty conditions in the rental property, along with specifics on how you handle complaints and repair requests.

Property Management Tips to Write a Strong Lease Agreement

It would help if you had a lawyer assist you in drafting your lease agreement. In your written lease agreements, every state and city has unique landlord-tenant regulations you must comply with. There are also federal rental property laws you must obey there.

The last thing you need to do is include a provision in your self-written lease agreement that is against the law. You should also make your lease agreement more concise. This way, there won’t be situations where knowledgeable tenants use it against you.

Whether a property management firm or real estate lawyer assists you, educating yourself is always a good idea. It’s crucial to know the laws and regulations that pertain to you and your rental properties to safeguard your interests.

Keep Several Copies of Your Lease

Digital bookkeeping and the beauty of modern technology are benefits for keeping your firm safe and well-organized. Digital lease agreements, however, can be changed either intentionally or unintentionally by the tenant or the program. 

You must always keep a paper copy of the lease agreement on file for reference in case of disagreement. By doing this, your tenant cannot argue that a lease agreement provision says something wholly different from what you had intended when you first drafted it.

You should have concrete evidence that everyone involved understood what was expected of them throughout the lease term. Your property manager can discuss this paper copy of the lease agreement with your tenant at the time of move-in and have them sign the document.

Address Lease Changes

During a tenancy, lease arrangements might occasionally change. However, you can construct a solid lease agreement that prevents alterations of any type from slipping into the lease agreement. You can do this by including language saying that any changes to the lease agreement would only be regarded as valid if in writing. 

Give your tenants no authority to “add” lease modifications from verbal interactions you or your property manager have with them to the original lease agreement.

The original lease agreement

This may result in misunderstandings and changes to the lease you did not consent to. Instead, only allow the inclusion of documented amendments into the original lease agreement to protect yourself and your investment.

Using a sample lease agreement is acceptable, primarily if you handle your rental home yourself. However, lease agreement templates are not universal forms that apply to all landlords in the nation, so you should be aware of that.

Many localities have specific rules and guidelines regarding lease drafting. Customizing your template to meet your particular demands and considering local and state laws are essential.

Write a Lease Agreement Conclusion 

A poorly drafted lease exposes property owners to legal risk. Outlining important information and ensuring it adheres to landlord-tenant rules are required when creating a legally enforceable document.

As a result, it would be in your best interests to have a qualified real estate agent or a professional property management firm walk you through the procedure.

Read more business law blogs to learn more.