Summary to the Complete Guide to Rental Leases
Why Should You Care About Your Rental Lease?
Your rental lease is a legal contract that outlines each party’s rights and obligations. As a landlord, you want tenants to pay rent on time and take care of your property. Your lease is a tool that helps make sure both parties follow through on their end of the agreement.
As we said in chapter one, online rental leases are more transparent and, because of this, they’re more likely to be read. After all, you want important rules and information to be read and understood by your tenants.
Lease agreements also protect you and your tenants by preventing legal trouble. When both parties review and sign the lease, there should be no confusion about what is expected of either party. If you do end up in legal trouble, a written lease will back you up, as long as you follow the rules you set.
While your lease can help you in a legal battle (and by preventing it), you should also keep detailed records:
- Tenant’s rental application
- Deposit information
- Move-in checklist and photos
- Written notices (notice of entry, late rent, rent increase)
- Records of repair requests and receipts for fixing them
- All correspondence with your tenant
This is another huge benefit of using Rentalutions to manage your rental property: we help you digitally record every aspect of your rental business.
In case you haven’t read our entire Guide to Rental Leases, we’ve provided a brief summary of each chapter’s key points.
Key Points from the Guide to Rental Leases
- Landlords benefit from saving time, making tenants happy, getting positive reviews, finding quality tenants who are tech-savvy, and easily renewing their leases.
- Tenants benefit from faster communication, access to the lease 24/7, easier move-in process, and saving time by signing the lease from the convenience of their homes.
- Digital signatures are legally binding and fully enforceable.
- It’s affordable. You can have a lease at a very low cost. In fact, our software is free for landlords with one unit. Create an account to learn more.
- The most common laws that impact your rental lease will be about the grace period for rent payments, late fees, security deposits, occupancy limits, and who is responsible for different types of maintenance problems. These rules differ state-to-state.
- To research your state laws, we recommend searching for your state’s “landlord-tenant laws,” joining a professional organization for landlords, reading landlord blogs, and setting up Google Alerts for relevant keywords, like “Illinois landlord-tenant laws.”
- It’s important to stay up-to-date with landlord-tenant laws, so you remain compliant and don’t risk legal trouble. Certain laws, like security deposit laws, have strict penalties if you break the rules.
- In chapter three, we outlined 10 important rental lease clauses to include and how they work.
- We differentiated between clauses, addendums, and disclosures.
- Clauses are typically pre-written legal statements you add to your lease. For example, the rent liability clause states the tenant is required to pay the monthly rent price for the duration of the lease term.
- Addendums are added to the lease to support or add to the document. You may choose to add a pet addendum, renovation addendum, etc. Check your local and state laws for required addendums. The EPA requires you attach this lead paint pamphlet to your lease.
- Disclosures are statements on the lease that disclose information. For example, the bed bug disclosure notifies tenants if there has been a bed bug infestation at the property.
- Most states require bed bug, mold, asbestos, and radon disclosures that state whether the property has ever had these issues.
- Our lawyer-reviewed online lease agreement automatically provides you the most important clauses, addendums, and disclosures for your state. No extra work necessary.
- You should update your lease every time you find new tenants.
- Customizing your lease includes updating your rental terms (tenants’ names, rent price, security deposit, etc.) and customizing your rental rules.
- As you customize your lease, you’ll need to decide important rules:
- State the monthly rent price, instructions for how the tenant will pay rent, collection date, late fee amount, and late fee grace period.
- If you have a co-signer on the lease, you’ll need the co-signer’s name and signature on the lease.
- If you’re collecting a security deposit, state the amount, where you’re holding the deposit, and if you’ll owe your tenant interest.
- State if pets are allowed. If you’re allowing a pet, you should include the pet’s size, breed, and other identifying information. Be sure to mention a pet deposit and pet rent if you have a deposit or rent.
- Let tenants know if smoking is not allowed in the building or on the property.
- If you live in a state where marijuana is recreationally legal, let tenants know if you allow it to be grown or sold on the property.
- Require tenants provide proof of purchase for renters insurance before moving in.
- Provide instructions for how tenants should reach you for maintenance issues. Mention if any maintenance tasks are the tenant’s responsibility.
- If your tenant is moving in early, state the amount of prorated rent in the case that your tenant is moving in the middle of a rent period (mid-month typically).
- In chapter five, we review how to handle different situations when a lease ends early.
- Valid reasons for tenants to end a lease include: reporting for military duty, military permanent change of station, or the landlord violates a lease term.
- There are five valid reasons a landlord can evict a tenant. If the tenant:
- Stops paying rent
- Violates any lease rule
- Damages the property
- Does anything illegal on the property
- Does not move out after the lease expires
- If a tenant abandons the property, you should follow your state’s law for how to handle their belongings. Some states allow you to throw away a tenant’s belongings, while other states require that you put it in storage.
- Lease renewals are a great way to keep quality tenants who pay rent on time and take care of your rental property. You save yourself time by not having to find new tenants and you reduce the risk of renting to bad tenants.
- Before offering a lease renewal, consider whether you want to keep your current tenants. Do they pay rent on time, take care of the property, and respect their neighbors?
- Ask for a renewal 90 days before the lease expires.
- Send a letter, an email, or ask the tenant in person if they are interested in renewing the lease for a set number of months at $x/month.
- Month-to-month leases are a good option for landlords who want to keep tenants but on a more temporary basis. The landlord or tenant can end the month-to-month lease at any time with proper notice.
Signing Your Rental Lease
If you haven’t already, sign up to use our lawyer-reviewed and state-specific rental lease agreement. At Rentalutions, landlords send the lease to tenants to sign first. After the tenant has reviewed and signed, then the landlord signs. This is best practice because you want your signature to be the final step that makes the contract legally binding.
If you sign first and send it to your tenant, it’s possible your tenant won’t sign. If you then move on to another tenant and send a signed lease to that tenant, it’s possible the first tenant will get back to you with a signed lease. In this situation, you could end up with multiple signed leases. To make sure you have one legally binding lease with the correct tenants, make sure they sign first.
After Signing the Rental Lease
We recommend completing a move-in checklist with your tenants. Walk-through the unit and have the tenant check off the condition of various parts of the unit, including appliances, floors, paint, etc. Note any pre-existing damage and be sure to take pictures of your rental property.
We also recommend providing a move-in letter that summarizes key information for the tenant. You can provide instructions for how to:
- Get set up to pay rent online
- Set up utilities, including which companies to contact
- Your contact information in case of questions or maintenance problems
- Emergency contact numbers
- Location of garbage bins and trash pick up days
- Maintenance do’s and don’ts (how to properly use the garbage disposal, etc.)
- Other useful information about the property and neighborhood
Check out our 8 tips for welcoming your tenants into your rental property.
On to the Next Step…Collecting Rent Online!
After setting up your lease, the next step is collecting rent. You can set up your online rent payments with Rentalutions. You’ll make it easier for tenants to pay you, allow tenants to set up automatic payments, and add clarity and transparency to the payment process.
Read The Complete Guide to Rent Collection for an extensive look at everything you need to know about rent collection.
Sign up now to customize your rental lease agreement and set up online rent payments.
This Guide is designed to convey general information, and not for the purpose of providing legal advice. You should not consider any information in this Guide to be legal advice. Readers should consider obtaining specific legal advice from their attorney in relation to any decision or course of action contemplated.
Also published on Medium.