Important Things that Should Be Included in a Rental Lease Agreement

If you’re a rental property owner, it might be tempting to go online, download a basic lease agreement, and present it whenever you have a new tenant. A basic lease will include the monthly rent amount, the duration of the lease, and generic notations about the security deposit, pets, and maybe late fees.

As a rental property owner, you might think that’s all you really need. But remember, a lease is a legally binding instrument between you and your tenant. Leases are supposed to protect each party in the event of a disagreement, so wouldn’t you want the most comprehensive lease you can get?

Here are important things that should be included in a rental lease agreement.

Local and state-specific information

In California, there are disclosures a rental owner must make to prospective tenants before they agree to move in, including lead-based paint, asbestos, and methamphetamine contamination. But it’s not a bad idea to include those disclosures in the lease to protect yourself from potential litigious claims down the road.

Also, some counties and municipalities require their own notices. If, for example, you have a rental property in Santa Clara and use a Santa Clara property management company, they should include compliance with Santa Clara ordinances and regulations. That could require certain language in the lease.

Notices of inspections

Likewise, certain municipalities might require rental inspections and/or regularly scheduled HVAC inspections. In order to remain in compliance, a rental unit owner must include provisions for such inspections in the lease.

If you own a property in a community that requires such inspections, the lease should include the procedure by which tenants will be notified of an upcoming inspection. If you use the services of a Santa Clara property management company, they should know local requirements to ensure the lease clearly provides a way to stay in compliance.

Even if it’s not required by law, a property manager should conduct an annual inspection and provide you a report that includes photos to ensure everything is being properly maintained and tenants are taking care of the property.

Instructions for rent payment

In modern times, it’s become more important to outline how you want tenants to pay their rent each month. Direct deposits and online payments can make these easier on landlords, but setting that expectation – or however, you prefer to be paid – needs to be stated in the lease.

You don’t know whether your tenant’s last owner or property manager was available on the premises to collect a check each month or if they mailed a physical check. Whatever works between you and your tenant for rent payments should be outlined in the lease.

How is late rent handled?

The due date for rent each month must be explicitly stated. It should also be clear on which day of the month after it’s not paid it will be considered late and how much late fees will be after that.

It should also be noted what happens when the rent is considered late. If you will begin eviction procedures, you must understand what’s required by local laws. If you have a rental property in San Jose, you should know how property management in San Jose needs to handle eviction proceedings within the law. This procedure should also be included in your lease.

Clear responsibilities

Not all rental properties are the same. At their last place, the tenant might not have been required to maintain the exterior, replace the batteries in the smoke detectors or maintain a pool in the backyard. If you have different expectations, you must include them in the lease.

Remember, no rental owner wants to be sued. By clearly defining roles and responsibilities in the lease agreement, you might be able to avoid some of the tenant-landlord disputes that sometimes end up in court.

Do you need help managing your rental property?

Valley Management Group provides trustworthy and affordable property management in San Jose, Santa Clara, and throughout Santa Clara County. Contact us for a free property management quote along with one free month of services when you sign up.