The Ultimate Guide to Craft a Concrete Lease Agreement

Thinking of renting commercial/residential property? It’s time you learn to draft a lease agreement. It is a detailed legal document intended to protect your basic interests, investments, and your tenants. In short, it is the foundation of cost-effective property management.         

When drafting a lease agreement, you must ensure that all the terms adhere to the landlord-tenant regulations in your region. Using the right resources and support, you can confidently draft a standard lease agreement.

So what are the key points of a solid residential or commercial lease agreement, you ask?
Here are the key aspects all landlords must include:

 

1. Start and End Date of Lease Agreement

Despite being obvious and one of the first things that come to mind when drafting a lease agreement, many landlords forget to state the start and end date of the agreement, known as the lease ‘term’.

Based on your requirements, you can draft a short-term rental lease agreement or a long-term agreement.

Missing this important clause in the agreement results in dealing with a ‘holdover tenant’ who refuses to vacate the rental property after the lease term has expired, and nobody wants to unnecessarily deal with evicting a tenant.

 

2. Rent-Related Details

Whether it’s a commercial or residential lease agreement, the second most important thing is the amount of monthly rent the tenant has to pay. Moreover, you should also include other rent-related details, such as:

  • Due date for payment of rent every month
  • Grace period and amount of late fees
  • Acceptable modes of payment (check, bank transfer, online transfer)
  • Charges on bounced checks

 

3. Security Deposit Terms

Security deposits are important to cover any possible damages or problems caused by the tenant after returning the property. A tenant might believe the property is in good condition when vacating it, but the landlord might think differently.

To avoid any potential misunderstanding and the consequent trouble, include the following terms about the tenant’s security deposit in your lease agreement:

  • Exact amount of the security deposit
  • Terms and conditions the tenant must fulfill to obtain a full refund
  • Terms and conditions under which the landlord may use some or all of the security deposit

 

4. Names of All Adult Tenants

It is extremely important to include the names of all the adult occupants in the residential lease agreement. Some landlords only mention the name of the person signing the agreement, but this is not recommended and may lead to problems at a later stage.

For example, if you’re struggling with nonpayment of rent and you cannot demand it from other occupants, since their name isn’t in the agreement!

 

5. Subletting Permissions

It is important to mention whether you allow subletting your rental property. If it is permitted, make sure you devise a clear policy with straightforward rules. For example:

  • The right to reject/accept the sublet rests with the landlord
  • The same qualifying standards hold for the sublet as for the other tenants

If you do not permit subletting, clearly mention it in the lease agreement. Also, notify your tenants before they sign the agreement to avoid any potential consequences.

 

6. Pet-Related Permissions

Similar to subletting, you can permit or prohibit animals on your property in the residential lease agreement. Have all tenants sign a pet agreement to avoid any future misunderstandings, just in case they decide to get a pet later on.

Here are some important terms to include in the pet agreement:

  • Types of pets allowed
  • Requirement of approval from the landlord before keeping any pets on the rental premises
  • Mandatory for all pet owners to have the required licenses, identification, and vaccinations
  • A pet fee; is for any damage the pet may inflict on the property

NOTE: these rules will NOT apply to occupants with service pets.

 

7. Landlord Visiting Rules

A landlord must respect the peace and privacy of their tenants; you can’t just enter a tenant’s unit whenever you want.

That’s where landlord visiting rules come in, stating clearly the terms and conditions in your commercial lease agreement under which you can visit your tenant’s unit. These can include:

  • Inspection
  • Showing the unit to future tenants, lenders, or buyers
  • As per official court orders
  • Under suspicion that the tenant has abandoned the unit without notice

Moreover, it is important to notify the tenant at least 48 hours ahead of a planned visit, and an appropriate time must also be considered, most suitably between 8 AM and 5 PM.

At the end of the day, a lease agreement is meant to protect both, the landlord as well as the tenant. You just need to ensure that the document is legally thorough and flexible to safeguard your property, rental income, and formulate positive relations with your tenants.

For any further inquiries regarding lease agreements, or any other property management related queries – Feel free and reach out to Skybridge Property today!

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