A Property Manager’s Guide to Understanding the Generic Rental Agreement

“A Property Manager’s Guide To Understanding The Generic Rental Agreement” written by Mike Marko

What is a generic rental agreement and why is it important?

A rental agreement exists for a reason, and that’s to eliminate any threats and problems that may arise between the lessor and the lessee during the tenancy. Although most rental agreements have the same inclusions with regard to its terms, property managers should know how to identify the differences in the agreements.

At this point, you may already have your own generic rental agreement, but how much do you really understand its contents?

In this article, we’ll discuss the contents of a generic rental agreement and the importance of providing the agreement in written form.

What to Know about the Generic Rental Agreement

Though it’s not a requirement to provide a written agreement, it would be in your best interest to present a generic rental agreement when renting a building or property to a new tenant. However, before elaborating on the reasons why this is so, let us define what a generic rental agreement is.

What Is A Generic Rental Agreement

A generic rental agreement is a written agreement that contains the terms and conditions for using or renting an asset (in this case, it can be an apartment or a house). The agreement establishes a tenancy for a short period of time, usually, one month or terms can define the tenancy for longer, like one year.

Before the tenant moves into the property, the agreement is shared and terms included are agreed to with the tenant. Anyone who is involved in the tenancy must sign the document because it will serve as a proof that the parties have reached an agreement.

Here are the common terms that you could expect from this document.

What Terms Should Be Included in a Generic Rental Agreement

Before a new tenant moves into the rental property, you should always provide and require them to sign a rental agreement. Your agreement must include all of the useful and important information and terms of the tenancy.

If you’re new to making agreements, here are the common contents of a generic rental agreement.

Identification of Both Parties

Every rental agreement should state who the lease or agreement is between. It should contain the landlord/property manager’s name and the tenant’s name along with their address. If there will be more than one person occupying the property, then their names and addresses must also be included. Additional verifying information and contact information are also added on some rental agreements.

Identification of the Property

Written agreements should contain details about the rented property especially its address. A generic rental agreement contains the full mailing address of the property. This includes the house number; street name; apartment number the tenant is renting; town; state; and postal code. Some agreements will detail the condition or include pictures of the property prior to tenants moving in, to show a condition of the property

Terms of the Rental

When making a rental agreement, the terms of the agreement are what will designate the responsibilities if anything arises during the rental of the property. You should make sure to include at least the basic details of the tenancy. The agreement should include the exact start and end date of the tenancy. Never write “this rent is for one month” or “this rent is for one year”. Writing the duration of the tenancy in this manner could lead to confusion cause problems in the future. Instead of detail the exact date and end of the tenancy to avoid any misunderstandings.

Amount of Rent That Is Due

It’s important to include the full amount of rent due over the period of the entire lease in your rental agreement. When writing an agreement, consider breaking down the amount of rent per month and never forget to include the date on which this rent is due. To avoid any misunderstandings or late payments you should state the exact day rent is due. For instance, “Rent is due the 1st day of the month. If rent is paid after the first day of the month there will be late fees and penalties charged for late rents.”

The Acknowledgement

To make the lease or generic rental agreement enforceable by law it must be signed to and agreed to by each party of the contract. If the rental lease is not signed and dated, it would be rendered useless. It should be signed by both parties so it would be clear that both parties agreed to the specific terms and policies for renting the property. All of the individuals that will sign the agreement should be over 18 and included in the “parties” clause of the lease.

Why You Need a Generic Rental Agreement

Renting a property without a written rental agreement is considered risky and can cause numerous legal problems if there is any disputes or issues that arise during the rental of the property. It is highly recommended to consider making a rental agreement so that all parties to the agreement know and understand their responsibilities and duties while renting the property. Oral agreements attract a lot of problems and it poses a lot of disadvantages for you. Even if there are property managers in your area who are letting new tenants move in without a written agreement, it is best to have a written agreement over an oral rental agreement.

Let’s take a more detailed look at the reasons why you should provide a written and agreed to rental agreement.

Helps Avoid Disputes

A landlord who’s not providing a written rental agreement often faces a lot of legal disputes. Without a written agreement, even small disagreement becomes an impending sign of a serious lawsuit. Everything that you and the tenant have agreed on must be written to have a reference should misunderstandings arise. Since a rental agreement is a legal contract having it detail responsibilities can help you avoid legal challenges and disputes when the they arise.

Deals with Key Issues

Aside from minimizing the threat of numerous lawsuits, a written rental agreement could help you maintain a good relationship with your tenants. The terms of the agreement will normally detail the responsibilities of all parties to the agreement and will help to settle any issues that could arise during the rental of the property. The rental agreement helps you deal with issues that could end the tenancy early.

The Advantages of Having a Generic Rental Agreement

A written rental agreement provides certainty and clarity for you and your tenant as well as a legal document to settle any disputes that could arise.

Whatever you and your tenant agreed to before the actual start date of the tenancy will be included in the agreement. It can be used as legal proof whenever there are disputes between the tenant and landlord.

The agreement also informs your tenants about what to expect during their tenancy and it would answer a lot of questions that may come up during the rental term.

Having a rental agreement can help you in a lot of ways, which is why it is important to make sure that all of the terms are written clearly. If you don’t specify how certain situations should be handled, then expect the worst possible actions from angry tenants.

Final Thoughts On What You Need To Know About Generic Rental Agreement

In this blog post, we talked about the importance of a generic rental agreement and its contents. This includes:

  • The tenant’s basic information,
  • Description of the property,
  • Amount of rent that should be paid,
  • The terms of the rental, and
  • Acknowledgement.

 

The agreement will be a legal document once signed by both parties and could serve as a proof that both parties have settled on certain terms. That’s why it’s important to have it done right.  Having an effective written rental agreement helps minimize legal disputes, and it can inform your tenants about what to expect during their tenancy.

If you want to know more about a generic rental agreement, please leave your questions below.

 

 

 

Suggested Articles:
1. Rental Laws That Property Managers Should Know
2. What You Need To Know About The Standard Rental Agreement
3. A Short Guide On Understanding Housing Association

Beginner’s Twitter Basics for Business - Mike Marko

Author: Mike Marko
Click here to contact Mike

If you need help marketing your business online then check out IM Consultant Services.

Disclaimer: This commentary is a matter of opinion provided for general information purposes only and is not intended to be taken as investment or trading advice under any circumstances. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses any person may incur as a result of this analysis. Individuals should consult with their personal financial advisers. By using this web site or any information contained in it, the user specifically and expressly agrees that no advisor-client relationship is created between said user and any author, owner, executive, or principal of this web site by either use of this web site, or by any information, product, or service offered by or on this web site. No express or implied guarantees or warranties as to investment or trading results are made, and any perceived insinuations of such are hereby expressly disclaimed.

Article: A Property Manager’s Guide To Understanding The Generic Rental Agreement

Leave a Reply

Your email address will not be published. Required fields are marked *