Renting your property is ideal if you are going away for an extended period and don’t want to sell. It’s also a for passive income.
If you have decided to rent out your house or apartment, you need a contractual agreement between you and your tenant. Many seemingly perfect arrangements have fallen apart because the parties did not clarify the terms of their agreement.
This agreement is a lease, and there are some basics you should include if you want a profitable and peaceful rental arrangement. Here are five lease clauses for landlords you should consider if you are renting out your place.
1. Identify the Parties, Price, and Location
When creating a rental contract, make sure to spell out the specifics of who is renting what and for how long. You want to include everyone’s legal names, the address in question, and the agreed upon price.
It may seem self-explanatory, but you would be surprised: the lack of these can jeopardize the enforcement of a contract.
Make sure all parties to the agreement sign a hard copy as well.
2. Severability
Usually, if one aspect of a contract is illegal or unenforceable, the whole thing is null and void. That’s why including a severability clause is key.
If by any chance there is an error in your lease, the presence of the severability clause will prevent that one mistake or omission from canceling out the entire legal obligation.
3. Duration and Renewal
Make it clear how long the lease lasts, and how much notice is needed to cancel it. You may want to add language that clarifies that if someone breaks the lease before the end of the specified time period, they are still responsible for paying the rent for the duration of the contract.
It’s also advisable to include language about renewing the lease. You may want to ask someone to tell you they are going to continue or leave within 30 or 60 days of the end of the rental term.
Another item to add might be incremental rent increases for renewals.
Consider whether you want automatic renewals unless the renter opts out, or if you want to have the choice whether to let them continue or not. If you like the renter, automatic renewal avoids the hassle of renegotiating.
4. Occupancy and Usage
Make clear how many people you will permit to live there and that the premises are for residential use only. You do not want people running a business out of your apartment!
Making sure your tenant stays within the contracted usage limits is important for maintaining the quality of your property. If you have an occupancy clause in your lease, if your tenant breaks this rule you may evict them for violating this condition.
Work with a law firm with experience in landlord-tenant disputes such as Law Office of Ronald D. Weiss, P.C. They can help you by providing specific language to protect you from contentious situations.
5. Default
You should also include provisions in case your tenant fails to pay the rent. Your attorney should lay out clear language governing what would happen in this situation so you can reclaim your property and recoup your damages as expediently as possible.
Lease Clauses for Landlords: Cover Your Assets
The best lease clauses for landlords cover any contingency in a landlord-tenant situation so that your business relationship can be smooth and mutually beneficial for all. They should also protect you in case things do not work out.
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