“Essential Information To Be Included In A Rental Agreement Form”
Confused about what to include in your rental agreement?
Providing a rental agreement to your tenants is important. It’s an important part of managing properties.
The rental agreement sets the ground rules and expectations.
However, don’t just give any rental agreement. Before you give one, make sure that 100% of the information that you included in the agreement is useful and relevant to your situation.
Today we’ll talk about the importance of a rental agreement and what it should cover.
Preparing Your Own Rental Agreement Form
A key part of running a successful property management business is having the correct and legal forms to do business with your tenants. Having your own rental agreement form to manage the rental units you are managing is a basic requirement for any property manager’s business.
The rental agreement is used and accepted as the legal contract between you the lessee and your tenant the lessor while they are renting the property you are managing.
A good and effective rental agreement form is normally developed over time and needs to be tailored to service and manage the rental properties you are managing.
Before we proceed with knowing essential information needed in a rental agreement, let’s start with knowing and understanding what makes up an effective rental agreement and how it is used to manage your properties…
What Is Rental Agreement
A rental agreement is a contract between the property manager and the tenant for renting a property.
The rental agreement is a listing of term, conditions, and rules that each party to the contract will follow while the tenant is renting the property. This contract is different from a lease agreement because it is commonly used for fixed term tenancies. It isn’t normally negotiated for a term longer than 1 year.
Most rental agreements contain most of the important information and the terms and conditions governing the tenant’s tenancy. It includes information about the tenant, the rented property, and details responsibilities and other useful information about the tenancy.
Property managers normally use the rental agreement to inform their tenant about who is responsible for anything that may arise while renting the property. Additionally, a rental agreement will detail the forms or rental, types and amounts of rental payments, and terms and policies to be followed for renting the property.
The rental agreement also includes details about security deposits and any other important terms including the need for insurances if using a commercial rental agreement.
Most rental agreements are now in written form and serve as a proof that the property manager and the tenant have agreed on the terms for renting the property. Rarely is the case of a property manager or landlord allowing unwritten agreement as it poses a lot of problems for both parties.
You should never hesitate to provide a written rental agreement because it can minimize and protect you from the stress and problems of managing a rental property.
Let’s take a look at the importance and benefits of having a written rental agreement.
Importance Of Having A Written Agreement
Having a written and agreed to contract to manage and oversee the rental of a property is key to helping to avoid any misunderstandings between you and your tenants.
The rental contract is a legally recognized contract that spells out terms and responsibilities for the tenants rental of the property. If something unforeseen or bad happens to the property while they are renting it, the rental agreement should spell out ways and means of fixing any problems that could occur.
A written rental agreement will help to keep your relationship with the tenant easily as any questions to the terms of their rental of the property would be detailed and explained in the signed and agreed to a rental contract. Often the rental contract is used to determine fault or responsibilities when something during the rental of the property goes awry.
The rental agreement can be used by the courts to testify that the tenant has not followed your terms and policies.
Since the rental agreement contains information about the tenant’s tenancy it is, therefore, the guide for that tenancy and will restrict you or your tenant from violating the terms that you both agreed on. If you or your tenant had violated the terms of the agreement, the rental agreement will be used to settle that dispute and be used by the courts to end a lease or worse determine fault in a lawsuit.
If the misunderstanding between you and your tenant had ended up in court the written rental agreement can be used as a legal document to detail and determine responsibilities and fault. It will serve as proof that one of you had violated your agreement for renting the property…
Where To Get Rental Agreement Form?
Not all property managers can or chose to make their own rental agreement. Instead of developing a rental agreement form from scratch they will ask for assistance from their trusted rental lawyer. A rental agreement is sometimes available in your local government offices and is readily available on any property management association site or forms site.
Some property managers begin by downloading a basic rental agreement from the internet and then tailoring it to be specific to manage the properties that they manage. There are a number of websites that offer templates for rental agreements but our suggestion is that you don’t use them as is.
Rental agreement templates are editable, but you have to make sure that your draft outlines the details of your agreement with the tenant. If you’re done making your rental agreement, don’t forget to show it to a rental lawyer.
Let the lawyer review it to avoid any violation of rental laws.
What Information Is Written In A Rental Agreement
Rental agreements contain all of the useful information about the tenant and his/her tenancy. So when you write a rental agreement include only the information that is necessary.
Before you make your rental agreement, study the rental laws in your area first. You can then check if there’s a required format for a rental agreement.
You may also consider consulting with a lawyer with experience in rental law.
Once you have completed your research, start making your contract.
To help you make your draft, here’s a list of information that is usually included in a rental agreement.
Parties involved in the lease
The first part of a rental agreement contains the names of all the individuals who will be renting and living in the rental unit. The verifying information (name, contact number, and the address) of the tenant should be on this part.
This is also where the name of the landlord or the property manager should be included.
Description of the rental unit
Almost all rental agreement contains details about the rented property. Don’t forget to include your property’s name, its exact address, and a detailed description of the rental unit.
Start and end date of the Lease Term
The next part you should include are the details about the tenancy.
When making a rental agreement, don’t forget to include the period of the tenancy along with its start and end date of renting the property. You should also have details about how the rental agreement gets renewed.
Rental Fees and Security Deposits
Be specific in giving information about the rental fees and security deposits in your rental property.
Most arguments between the property manager and the tenant are caused by the misuse or misunderstandings about the rental fees and security deposits.
While making a draft of your rental agreement, don’t forget to mention the amount of security deposit that should be paid by the tenant. And don’t forget to include the amount of rent due, your preferred payment methods and frequency of payments.
If you require penalty fees for late payments, include it in this part of your rental agreement as well.
Repairs and Alterations
The rental agreement should also spell out who is responsible for repairs.
As the property manager, it’s best to require your tenant to take care of their rented property.
There should be a specific designation of responsibilities between the two parties when it comes to repairs and alterations.
A subletting clause is also important for most property managers. Mention if subleasing will or will not be allowed on your property.
If subleasing is allowed, there should be a statement that states that a written permission from the landlord or property manager’s needed before a tenant may sublet.
Termination Of Lease Agreement
Your rental agreement should also cover the instances when both parties may terminate the lease agreement. List the instances that could be grounds for terminating the rental agreement.
If a violation could result in a broken lease, remember to include the details about the notice that will be issued before the eviction.
Right after the termination of the agreement clause, it’s logical to point out the restricted activities that should not be done by tenants. These pertain to any activity on the grounds of the rental units and within your rental property.
Each of the activities should be enumerated along with the possible penalties for violations.
Final Thoughts About Rental Agreement Form
In this blog post, we talked about what you will need to include in a rental agreement.
Property managers should provide a written agreement to help set the expectations and ground rules of the tenancy. Although you can find a lot of samples from the internet, you should still consider customizing one that will suit and contain all the policies of your own rental business.
And what’s most important is to not forget to include the key sections I pointed out in this article in your written rental agreement.
If you have questions regarding a rental agreement, you can leave them on the comments section below.
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