For budding landlords or long-time veterans of the housing industry alike, one of the more pressing and time-consuming aspects of renting out any type of property for both short or long term occupancy is ensuring you have all the proper documentation filled out.
After all, anytime you are planning to rent property to a tenant you are entering into a business agreement with that individual or individuals. You need to be sure you and your property are covered in any and all potential situations. This paperwork is essential for outlining what is expected from each party in this agreement and how you can find remedies to any number of potential eventualities that might occur.
This includes tenants failing to pay rent, tenants causing damage to the premises, even restrictions related to pets and certain types of music or industrial equipment allowed in the unit, and there are also the most recent concerns of tenants renting out their apartments or condominiums to third parties through Airbnb and similar sites.
All of the permitted and prohibited aspects of a rental arrangement must be laid out in black and white so there is no confusion in the future. A lease agreement is absolutely necessary to ensure that everything is done by the letter. But there are other forms of paperwork that might be required for landlords, property managers, and homeowners to keep a record of tenancy in their units.
Why You Need a Lease Agreement
Those of you who are new to the game may still be trying to gather all of your important documents as you prepare to rent out your first unit. The first thing you need to get is a lease agreement which is sometimes overlooked in its importance. Many rookies will download a boilerplate form that they find online after a quick, cursory Google search.
Unfortunately, this is often insufficient as lease agreements should have some level of specificity to them for the purposes of fully protecting you and your premises. A lease is, without a doubt, the single most crucial document for renting out property of any kind.
Your lease agreement must have all of the tenants who plan to reside in the property and they must all sign the document. This gives you certain rights throughout the extent of the leasing period and empowers you with the ability to evict tenants or charge them additional monies should they be in violation of the agreement.
Without a signed lease agreement, you are not fully protected and you could be putting your property and your income at risk.
Important Points
A lease agreement is designed to map out all of the fundamental points that will govern the leasing arrangement between yourself and your tenants. Therefore, it needs to be very specific about the terms of the arrangement such as the rental amount, the due date of said amount, the methods of payment that are suitable, and any late fees.
The lease agreement must also outline the length of the lease term and if the arrangement is a month-to-month situation. Some lease agreements begin with a fixed one year lease with the following year changing to a monthly arrangement. But this is not standard, by any means.
There are other points that must be covered including the amount of the security deposit that is submitted to the various policies governing the lease such as allowing for pets, allowing for multiple occupants not listed on the lease, and when you may be allowed to enter the unit. Repairs and responsibilities for maintenance that are designated for you and the tenants are also critical to have included in your lease agreement.
One other thing to keep in mind, different states might have varying requirements as to the protections and legalities governing leases of apartments, houses, condominiums, and so on. That’s why it’s important to ensure that the lease agreement you are having signed by your tenants complies with the mandates for your state. You could be putting yourself at risk if you are relying on a lease agreement expressly suited for renting property in California to rent a property in Florida.
Additional Paperwork
A lease agreement is only one document that you need to have in place when you are renting a property to others. There are many additional forms that you should also consider using when you are planning to offer units for rent.
Some of these documents are more critical than others but all of them provide additional protection for you and your property before, during, and after tenants occupy the unit for any period of time. Remember, the whole purpose of having the proper paperwork is to ensure that everything is written down on paper so there is absolutely zero confusion between you and your tenants.
The other paperwork you may want to consider having covers a number of different aspects of the arrangement between you and your tenant(s).
An application is imperative for all prospective tenants who are interested in renting your property. This document is the best way to screen anyone who wishes to rent from you as it gives you the best indication of whether or not you are getting into an arrangement with someone who will be a headache from start to finish when it comes to paying rent and obeying rules.
A move-in checklist is also a smart way to take inventory of the condition of the unit and have you and your tenants agree on that condition upon entering so there is no confusion as to who is liable for any damage or disrepair upon the tenant’s vacating of the premises at the end of the lease. This checklist points out any damage that is visible upon the start of the lease and accounts for any such other incongruities that are not the tenant’s responsibility.
An addendum is absolutely essential for covering anything that the lease has left out. These might be special circumstances that apply only to this tenant and might not be otherwise included in a normal lease agreement. Should your leasing arrangement require an addendum, you can draw one up that is satisfactory to all parties involved and have that signed by you and your tenant(s). This should be attached to the lease.
