“Drafting a Simple One-Page Lease Agreement”
How do you make a simple one-page lease agreement?
Property rental starts with the most important document in this business: the lease agreement. This is the legal file—agreed upon by you and your tenant—that can serve as your saving grace in case problems arise in the future.
You’re now up to the challenge and are willing to open up business as soon as possible.
But there’s just one problem: you don’t know how to draft your lease agreement. And this task is definitely not as easy as it sounds, as there are a lot of things you must consider adding onto the agreement.
Fortunately, we have for you some tips on what to include in your simple one-page lease agreement.
Creating Your Own Simple One-Page Lease Agreement
Along with your intensive internet research, you may come across pre-printed or standardized lease forms containing the essential terms.
However, these are only generalized, and may not always fit your needs as a property manager. These forms are not a one-size-fits-all solution, and that is why you have to create your own simple one-page lease agreement.
But before writing your draft, you must first understand what a lease agreement is.
What is a Lease Agreement?
A lease agreement is a binding contract that serves as the legal agreement between the landlord and the tenant. It lists all the responsibilities expected from both parties and must be abided by the rules at all costs.
How Does It Differ from a Rental Agreement?
Rental agreements are automatically renewable agreements that provide tenancy for a short period. You and your tenant can both make changes or terminate the agreement by providing a written notice. This type of agreement is especially useful for those who are having a hard time attracting new tenants.
On the other hand, a lease agreement cannot be automatically renewed and provides tenancy for a longer period.
Both parties also cannot make changes, unless agreed upon during the lease term. This is preferred by property managers who are looking to secure tenancy for a set period of time.
What is its Value?
Lease agreements help resolve problems and disputes that may arise during the lease term. It serves as a guidebook, that can be referred to and reviewed when sorting out issues.
It also serves as a communication tool that connects property managers with clients through agreed terms. This written document assures that a mutual understanding between the parties has taken place.
What You Should Include to Make a Good Lease Document
What makes a lease agreement effective is its content. Because it is considered a legal and binding contract, you have to include every bit of detail and all the things you would expect from your tenants.
The following sections outline some of the most important information to include in your agreement.
Every lease agreement should include the following:
- Name of the tenant(s) and the property manager,
- Address of the property,
- The contact information of the tenant(s) and the property manager (or landlord), and
- The exact date at which the agreement will take effect, along with the ending date.
Should you require security deposits, it is important to include its details within the lease. Because the amount of deposit varies in different state laws, you should also include how much you will need and what mode of payment is available.
You must emphasize that the security deposit will be fully returned at the end of the lease—that is if no problems arise.
Rent Cost and Payment Schedule
The full cost of the rent, the monthly due date, and the bank account details or any other mode of payment should be specified. To discourage late payments, consider including late fees or consequences when this takes place.
This section should explain tenant responsibilities in terms of property maintenance—things such as painting, refurbishing and such. It should also indicate the party to be held responsible for these tasks.
This section should first list all your available items and appliances, and their current conditions. You may then include rules regarding allowable alterations to the property, periodic lock changing, etc.
Make it clear to tenants that deposits will be used for any necessary repairs due to damages were done to the property.
You may want to include a subletting clause, as you might have to deal with this in the future. Specify whether subletting your property is allowed or not. You may also state that you have the right to screen any potential sub-tenant before any agreements are made.
Concealed Defect Warning
It is your legal duty as a property manager to inform your tenants of any known or anticipated defects in your property.
Disclose every single defect in your property so as not to find yourself explaining an incident in the future. It can also help you avoid serious legal trouble later.
Although before renting out your property, you may want to fix any known defects first.
After the lease has expired, specify the allowed number of days your tenant can stay on your property without term renewals.
Include a section about termination and specifics about how either party can or should go about it. Tenants should be informed of the process and results if they wish to terminate their lease. You can also check lease termination rules with your local state laws.
Other Things to Consider in a Lease
A well-crafted lease saves you from facing potential problems in the future, letting you run your business with ease, and providing convenience for your tenants.
That is why apart from the essentials, you should also consider having additional terms in your simple one-page lease agreement.
How to Make It Even Better
Remember that pre-printed or standardized lease forms only save you time since you don’t have to start from scratch. Revisions must be made to customize the form according to your needs as the property manager and the tenants.
Before finalization, ask yourself:
- Does it follow state laws and guidelines?
- Did I include everything I need?
- Is it enough to protect me and my interests?
- Will the potential client agree with it?
Consider updating your rental lease frequently, as your business’ market value may fluctuate, or you may change your mind regarding a specific rule or term. You should also stay informed to make sure your agreement is still in compliance with the law.
Protect Your Lease
Another tip before finalizing your document is to have a lawyer check and review your simple one-page lease agreement draft. They must be familiar and well-versed with the property laws in your state to ensure that your document is valid and legal.
Once your agreement is already checked, keep multiple copies of it, or convert it into an online document for safekeeping. You can also scan your document onto your computer after it has been signed.
Final Thoughts on Making a Simple One-Page Lease Agreement
A simple one-page lease agreement serves as a binding contract between a property manager and the tenant. Compared to a rental agreement, a lease agreement is suitable for long-term tenancy.
The ideal lease agreement will save you from facing a whole host of problems in the future. It is also comprehensive, and includes the following information:
- Basic information,
- Security deposit,
- Rent cost and payment schedule,
- Property maintenance
- Sub-leasing clause,
- Concealed defect warning, and
- Termination statement.
For further protection of your needs and interests, have it checked by a real estate lawyer before finalizing. Make sure that you are up-to-date with the latest changes in your state laws and market price.
And make sure you keep multiple copies of your simple one-page lease agreement.
If you need help in creating a simple one-page lease agreement, feel free to leave your comments below.
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