Tips for Drafting a Landlord-Tenant Agreement

If you've been thinking about renting out a property, there are a few things you need to know.

Becoming a landlord can be an incredible experience. If you've been thinking about renting out a house or apartment, it's important to understand exactly how to get started. Once you have a great property and you're ready to start looking for tenants, it's important to draft a landlord-tenant agreement. After you screen potential tenants, you'll need to make sure that each person who will reside in the residence is in agreement with the contract. So what makes a contract effective? And how can you create something that works for you? Here's what you need to know.

1. Include the length of the lease

The more information that you include in your contract, the stronger it will be. Always include the start and end date of the contract. You should also clearly dictate how long the lease will last. For example, do you want to offer six-month leases? Twelve-month leases? The length of lease you offer may also affect the rate you allow tenants to pay. Some landlords prefer to offer a slightly lower rate for tenants who sign longer leases.

2. Decide whether you'll allow tenants to sign a month-to-month agreement

In addition to regular lease length agreements, many landlords offer additional lease options. If you want to offer flexibility to your tenants, you may consider implementing month-to-month lease terms. This can be beneficial if you have tenants who may want to say for a non-traditional length of time, such as seven months instead of six, or fourteen months instead of twelve.

3. Understand the type of deposit you'll require

It's important to obtain a deposit from your tenants prior to handing over the keys. A deposit helps protect you against damages that could occur while the tenant lives in the home. If they accidentally knock a hole in the wall while moving in or out, for example, the deposit can cover the cost of repairs. Similarly, a deposit can help if your tenants fail to pay rent during one month.

4. Outline tenant responsibilities

One of the most important elements of your lease is including information on tenant responsibilities. For example, will you expect your tenant to mow the grass? Will they be responsible for cleaning the exterior of the home? If you have multiple apartments, will have you "quiet hours" at the residence? These policies and plans need to be carefully outlined so that both you and your tenant understand exactly what you expect of them.

5. Explain the lease to your tenant

It's imperative that your tenants understand exactly what the terms of your lease agreement are. Even if the terms are outlined in the contract, it's important to verbally explain the lease to ensure there are no misunderstandings with your tenant.

If you have questions or concerns about drafting your lease agreement or you'd simply like guidance and assistance in creating something effective, reach out to a real estate attorney who can help you. Your lawyer understands that creating a lease is an important part of being a landlord and would be happy to help you create something that works for you.