So you’ve gotten through the hard part: you found the perfect tenant to rent your property.
Congratulations!
That means the worst is over, right?
… right?
Alas, as a property manager, your work is never done. But there are ways to make that endless to-do list easier to manage.
Once you find a tenant, then comes the rental contract or lease agreement—an important little document that could make or break your relationship with your tenant.
In this post, we’re going to tell you six critical sections you must include. This is one article you won’t want to miss. It could save you from heaps of legal trouble in the future. So for your own sake, keep reading.
What’s the Big Deal With Lease Agreements?
A lease agreement may seem like a formality. A bunch of papers that just collect dust in your filing cabinet. And in the perfect tenant-landlord relationship, you may never have to pull it from the cabinet. But that doesn’t mean it’s not important. Lease agreements and rental contracts lay the foundation of the terms of your business with your tenant. It establishes the ground rules, the responsibilities, and the expectations for all parties involved. Imagine trying to play a complex board game without understanding the rules. Chances are you’d irritate the other players, maybe even accidentally cheat. One thing’s for certain: you wouldn’t stand a chance of winning. Trying to lease a property without a tenancy agreement is not only illegal, it’s also a recipe for disaster. I’m talking: legal drama and reputational nightmares. So, do yourself a favour and draft up a contract. It’s not as hard as you think. Let’s get into the nitty-gritty.What to Include in Your Rental Contract
So let’s get a few obvious things out of the way. First: there might be provided or state-specific things you need to include in your lease agreement. Ontario tenancy laws differ from those in British Columbia, so you’ll want to take a quick trip to your government’s website to confirm. This article will include important rental contract sections that are applicable across all of North America, but you should do a bit of research into your local regulations before you start gathering signatures. Once you’ve done that, there are the basics. All rental contracts need to include fundamental information like:- The full names of every tenant
- The address of the property being leased
- Signatures of all parties involved in the lease
- The date of the signing
1. Include the Length of the Tenancy in Your Lease Agreement
Let’s start with a biggie. The lease agreement should clearly state the start and end date of the lease. It should also clarify whether it is a fixed-term (meaning the tenancy is temporary and for a pre-specified length of time) or periodic (meaning the tenancy has no specified end date) lease.2. Include Rent Information in Your Lease Agreement
This might seem basic—of course, you need to include rent information in your rental agreement—but the rent section of your contract should include more than just the amount of rent. First, you need to specify the exact amount of rent and when the tenant is expected to pay each month. There should be explicitly listed inclusions and exclusions somewhere in the contract. If your rent includes utilities or internet, for example, then state that in the rent section for your agreement. If you have a late fee policy, this should be listed here. As well as details about how payments should be made and what sorts of payment methods are accepted.3. Include Deposit Information in Your Lease Agreement
Deposits are tricky business, but they’re necessary in most tenancy agreements. More than anything, deposits act as incentives for the tenant to respect your property. Without them, you could be losing a lot of money on easily avoidable situations. Here are a few common types of deposits to consider:- Security deposit: to cover the cost of any repairs when the tenant moves out of the home.
- Pet deposit: if you allow pets on your property, a pet deposit can cover the cost of any pet-related damage.
- Key deposits: lost keys are a pain to replace, true, but they can also pose a security risk to your property, especially if you have key fobs that open a parking garage, mail room, or other communal space. Key deposits can encourage tenants to take good care of their keys.
4. Include Pet Policies in Your Lease Agreement
If your property is pet friendly, you need to establish a pet policy. Deposits, cleaning fees, and other rules about pet size and limits need to be clearly outlined in your rental agreement.5. Include Maintenance and Repair Stipulations in Your Lease Agreement
Look, things are going to break. Frequently. It’s a part of living in a home, which means in a part of your job as a property manager. So, make sure you outline the process for requesting repairs and maintenance in your contract. It’s important to note that repairs and maintenance are not only good for the tenant but also you. Broken things tend to become harder (and more expensive) to fix the longer the repairs go undone. The last thing you want is a tenant moving out and leaving you with a long list of costly repairs that need to be completed before the property can even be shown to other prospective tenants. A little bit of work right away is better than a lot of work later down the line. So make sure your tenants know how to submit maintenance requests.6. Include Legal Restrictions and Other Rules
This is where you need to set your terms. Don’t want your tenants subletting their space or running a business from their unit? You need to clarify this in the lease. Would Airbnbing the second bedroom a few nights a month be a major no-no? Include it in the contract. Anything you need to ensure your lease term with the tenant runs smoothly should go into the contract—from small things like key fob replacement fees to large things like tenant insurance requirements. Every detail needs to be in writing for the protection of both you and your tenant. So do yourself a favour and spend some time thinking about this section before you proofread and print your agreement for signing.Streamline the Rental Contract Process With Leasey.AI
Look, we never said being a property manager or landlord was easy… But we do think it can be easier. That’s why we created Leasey.AI—property management software designed to streamline and automate your leasing process. The results speak for themselves: property managers already using our system have reduced their manual leasing efforts by 70% and saved over 20 hours per listing. Want to see what all the fuss is about? Book a demo with me to sit down and chat one on one about how Leasey.AI can support your business.
All information provided in this post is for general informational purposes and is not intended to be legal advice. You should speak to a licensed legal professional in your area for detailed information on this topic. The information on this site is pulled from third-party sources and, as such, is not necessarily up-to-date or accurate. You should always confirm the accuracy of the information you find on the internet, particularly with regard to financial and legal matters.