“A Guide To Creating A Lease Example Agreement”
Looking for ways to create a lease example for your property leasing?
A lease agreement or lease contract establish the terms of the arrangement between a tenant and his landlord. Generally speaking, landlords are the ones who draw up the agreement.
Of course, before you finalize a lease agreement, you need to have your lawyer look at it. But before that, you’re free to create a lease example or two.
That way, your lawyer can have more than one choice of lease agreement to recommend and polish up for your purposes.
Creating a lease example agreement is not an easy task. Not all are aware of what it should cover.
Fret not, though. In this post we will be guiding you through the process of creating your lease example agreement.
How to Create a Lease Example Agreement
As I said earlier, a lease agreement covers the rules and regulations both the lessor and the lessee have agreed upon.
Therefore, it’s important that the lease will cover everything relevant to that arrangement. If not, there could be space for questions and even arguments later on.
That’s why it helps to create more than one lease example agreement, as I suggested before.
This gives you options from which to choose your final lease contract.
Anyway, it doesn’t cost you much to make a lease example agreement. When we say it’s still “an example”, that means it’s not the official agreement yet.
Rather, it’s just an example of the sort of agreement you’re going to use as your official, final contract. It’s just a draft, in other words, which nonetheless gets your main points across.
So how do you start creating a good lease example? Here are the steps that you can follow to create a lease example agreement for your business.
Creating a Sample Lease Agreement
The best way to create a good lease example is to follow a guide to the process. Knowing what steps to follow in drafting a lease example will help you a lot.
For the most part, guides to writing a lease example are just enumerations of the points you need to cover in the document.
That’s since you just need to go through those points one by one to create a good lease example.
So let’s do that for your own lease example. Below are the important parts of a lease agreement that you should have in your own draft.
1) Lease Title
The title of the Lease Agreement should be written on the top part of the paper. This is the main section that shows who’ll be leasing the property, i.e. the lessor.
For the lease title, you need to specify what the lease agreement is about to make sure that the contract is legal and not a scam.
Next is naming all the tenants.
2) Name of All Tenants
The persons who’ll be occupying the space shall be called tenants or lessees.
You must specify in the agreement who the LESSOR and the LESSEE will be.
All their names and the basic information of the tenants and Property Manager should be included, such as these:
- The address of the tenant/Property Manager.
- The telephone number of the tenant/Property Manager.
- And also the email address of the tenant/Property Manager.
3) Address of the Property
State the complete address of the property that will be leased out. You need to be as specific as possible since it’ll show all the lessees where the property is really situated.
Include the description of the house being rented out. This includes the appearance of the house and all the appliances that will be rented out along with the house.
4) Term of Tenancy
This should specify the beginning and the end of the agreement.
The time frame of the tenant’s stay must also be written in here. For instance, state if the tenant can only stay for weeks, months and/or years.
If there is an option for early termination of the tenant it should specify this clause.
5) Deposits and Fees
A variety of points have to be covered here. For the rent, include these:
- The due date of the rent that tenants have to pay.
- The preferred or permitted mode of payment of the rent, e.g. bank draft, money transfer, cash, etc.
Don’t forget to cover the security deposit too. Here are the things you should state about it in a lease example document:
- When and how you will return the deposits and the account for deductions after the tenant moves out.
- Any non-returnable fees.
You should also specify in your lease example whether or not you plan to charge late fees for late rent payments. If so, be sure to cover the following points:
- If the tenant will be charged a late fee for a certain amount of time.
- The amount of the late fee to be charged.
6) Repairs and Maintenance
Repairs and maintenance must cover responsibilities, and restrictions on pets.
For the responsibilities you must have these:
- Check first the local laws to know who will take the responsibility.
- State who will be paying the damage and who will be paying for the utilities.
On the other hand, for the restriction on pets, you must do the following if applicable:
- State in the agreement if you are allowing a pet in the rental house.
- The agreement should also state the number of pets and that the tenant will take full responsibility for his/her pet (for example, cleaning of the waste).
This clause should detail the action the Property Manager or tenant will face in the event that one of them fails to abide by the terms that were agreed upon in the lease.
Detail the remedies available to you as the Property Manager, such as these:
- Repossession, and
- Court Action.
This is really just something you add to the lease example agreement as a blank. That is, you should prepare a space for signatures in the lease example document.
For the final (official) lease agreement, both the names of the parties should come with signatures. When the agreement is reviewed and signed, the lease will take effect.
In addition, include the date when the agreement was signed by both parties (again, this is for the finalized and signed version of the document – you obviously won’t need it yet in a contract draft your lawyer still has to review).
Conditions You Can Add to the Lease Agreement
There are some conditions you can also add to your lease example.
You can specify in the lease example if the tenant is allowed to make changes in the rented property.
Also, specify if there are any limitations to the changes the tenant may make in the rented property.
Final thoughts on a Lease Example Agreement
Today, I talked about creating your own lease example.
A lease example is essentially a draft of your lease agreement with tenants on your leased property. It’s still an example because it’s usually just the first version of your lease agreement.
In other words, it will still have to go through some polishing and auditing by people like your rental lawyers and similar advisors.
Nonetheless, it’s an important document. The lease example (or the best one you make, anyway) usually becomes the basis of your final lease contract.
As a recap, here are the important parts of the lease agreement you must have when creating your lease example:
- The lease title,
- All the names of the tenants,
- The address of the property,
- The term of tenancy,
- The repairs and maintenance,
- The consequence,
- The signature, and
- Other relevant clauses.
This article can help you organize and know the important points that have to be in the lease agreement. If you have further questions on crafting a lease example, feel free to leave a comment in the comment section below.
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