The lease agreement in a residential property management transaction is a contract that outlines all the details of the rental term. A proper, thorough lease agreement prepared by an attorney protects the interests of both the tenant and the owner/landlord. Here are the Top 5 Reasons why a professional lease agreement is key to a smooth and transparent rental term.
- Legal Protection: The lease agreement is a legally binding document. It outlines the terms of the lease period and what the responsibilities are for both the tenant and the owner/landlord. It also presents consequences and necessary actions in the case of lease term violations. Having all the details clearly outlined helps diffuse cases of dispute, and it keeps the scope/parameters of the business relationship well defined.
- Rent and Payment Terms: The lease agreement specifies the monthly rent amount, required security deposit, when the rent is due, and the methods of payment accepted. Any grace periods for late rent, fees associated with late rent, and subsequent actions if rent remains unpaid should be clearly stipulated. Other fees associated with the property, if applicable, such as pet fees or pet rent, smart home technology fees, resident benefit packages, etc. should also be clearly and specifically outlined.
- Duration of Tenancy: The lease agreement outlines the term of the lease. This can range from a fixed-term (ex. 12 mos.) to a month-to-month tenancy. The agreement will outline the exact date of move-in and the date when the lease will expire. It may also contain specific language regarding renewal options.
- Maintenance & Repairs: The lease agreement should also outline what general maintenance tasks are the tenant’s responsibility versus the owner/landlord’s responsibility and how property inspections and repairs will be handled. Questions should be addressed about what is considered regular and reasonable wear and tear, how property emergencies should be handled, and how the security deposit is addressed upon lease termination.
- Rules & Regulations: Each lease agreement outlines the standard rules and regulations that apply to every property under management, such as pet policies and smoking restrictions. It should also clearly specify any special HOA restrictions, county noise ordinances, road parking limitations, or other rules pertinent to that property and area.
The lease agreement is an essential tool in residential property management that establishes and defines the parameters of the tenant/landlord relationship and helps manage the expectations of both parties. It is vital to protecting the interests of both the tenant and the owner/landlord for the duration of the lease term.
