7 points to mention in a lease agreement
Most of us who have leased our home or any other asset such as a vehicle, property, etc., are aware of the term “lease agreement.” Others who have not leased might also know about lease agreements, but some people don’t know anything about it. If people are familiar with leases, they may know to avoid mistakes while preparing these papers. In this article, we will explore several important points that you must mention in your lease agreement.
What is a lease agreement?
The lease agreement is a contract between two parties, lessor and lessee or landlord and tenant. The lessor is the legal owner of the asset. The lessee is the one who gets the right of using the asset if he uses regular rental payments. The lessee must act according to the conditions imposed by the lessor on the use of the asset.
Points to include in a lease agreement
Name of all Lessees: Lessees are also referred to as tenants. It is essential to include the name of all tenants in the agreement to avoid any kind of disruption. All the adults who live in the rental unit should be treated as tenants. They must sign the agreement, which makes them legally responsible for following all terms, including the property’s proper use. If any tenant is unable to the pay rent, then other tenants have to pay anyhow. The owner can also mention the https://expressevictions.com/california-eviction-notices/60-day-notice-to-vacate/.
Provisions for a security deposit: The proper use and the time and clause of return of the deposits act as a source of friction between landlord and tenant. The limit, use, and return of deposits should be clearly specified to avoid future legal issues including:
- The amount of the security deposit, which must comply with the maximum amount allowed under state laws
- How you may use the deposit and how the tenant may not use it
- When and how you will return the deposit and what will be the deductions and for what purpose, and
- Any non-refundable fees for cleaning and other legal purpose
Assigning responsibilities: State the information regarding payment of utilities, trashing items properly, recycling of waste, maintaining the outdoor area and other responsibilities assigned to either the lessee or lessor.
Sometimes owners are legally responsible for bearing the expenses of utilities, while in some cases, tenants take care of this expense.
When it comes to repairing any home appliance or keeping the area safe, check into local laws to know your role. Most of the time, it is the landlord’s responsiblity to keep the living space safe to live.
If the tenant faces an issue like loss of keys or something else, he should inform the property owner first so he can help.
Restrictive use: Check thoroughly that your lease agreement complies with all related laws including health and safety, rent control, anti-discrimination, rules of occupancy, etc.
The term of the tenancy: It includes the starting and ending date and also contains the specific length of time. Time can be in days, weeks or months depending on the agreement end date. Every lease agreement needs to tell whether it is a rental agreement or fixed-term lease. The rental agreement runs from month to month and renews itself. Leases usually last an about year.
Rent: In the housing agreement, payment information must contain the rent amount. You also have to specify how rent should be paid, i.e., acceptable payment methods. Add whether extra charges or a late fee will be applied after a certain amount of time if rent is paid on time. Moreover, you must mention if any charge will be imposed when a rent check bounces.
Limits on occupancy: Make sure to mention that your asset is meant to be the residence of only the tenants, and no other person can live there without your permission. Sometimes tenants sublet the asset without talking permission and move to some other place.
If any tenant fails to follow or violates any term of the agreement, the lessor can terminate the tenancy of all tenants. Remember, making a mistake in the lease agreement can prove expensive in future, so make sure you don’t miss any essential terms and conditions while preparing a lease agreement.