“How To Specify The Lease Term For Rental Properties” written by Mike Marko
Are you looking to learn more about the lease term for your lease agreements?
There are different types of lease terms that you can use for your rental properties. The trick is to know how to pick which one to use, or how to specify it.
That’s why today I want to talk about the lease term, and you can add them to your lease agreements.
Learn More About The Lease Term
The lease term or length of rental is defined and understood by both the lessee and lessor when they have finalized the lease agreement contract.
The lease or rental agreement should be written, legally reviewed and signed, making it a legal contract between the lessee and lessor. Here are some of the items that are included in a lease contract:
- Date of agreement
- Names of roommates
- Accessible places of the property
- Amount of monthly rent
- Extra fees
Types Of Leases
There are two types of leases: Periodic tenancy, and Fixed term lease.
In a periodic tenancy, there is no end date included in the rental contract. The tenant has the right to live in the property until the landlord or property manager decided to end the agreement.
There are two types of periodic tenancy, monthly and weekly periodic tenancy. In monthly periodic tenancy, the tenant is required to pay rent on a monthly basis. While entering into a weekly periodic tenancy means that the tenant is required to pay the rent on a weekly basis.
Fixed Term Lease
In a fixed term lease the property manager agrees to rent the property for a fixed length of time. Unlike the periodic tenancy, a fixed term lease has an end date and both tenant and property manager could end the contract.
Can You Break The Lease?
As the property manager, you could end the tenant’s contract early. However, even a tenant could also “break the lease”. The terms and ways that both the lessee and lessor can break the lease agreement need to be spelled out and defined in the lease agreement contract. If the lessor is breaking the lease often times there is a cash penalty relative to the months of unpaid rent left on the lease. It is best to consult with your real estate attorney to understand the best way and legal requirements to avoid court and misunderstandings when a lease is broken.
If the tenant or the property manager have violated the terms of lease agreement if stated and agreed upon in the lease agreement contract, both of them could end the lease agreement. But, a notice must be sent within a legally allowed time frame before the eviction or end of the tenancy.
Always use a legal representative to review and add any legal wordings needed to meet State and local regulations when developing your lease agreement for your property management business. One suggestion is to include, “The tenancy created by this agreement is governed by the Residential Tenancies Act and if there is a conflict between the agreement and the Act, the Act prevails.”
If ever the property manager decides to end the lease agreement early, they can’t evict the tenant immediately. They can ask the tenant about the sudden ending of the agreement but the tenant is not required to move out instantly.
Remember it is best to have a reason or a cause that was breached to end or evict a tenant from a lease agreement. Also if ever faced with an eviction, use a legal representative to avoid any misinterpretations of the local or State laws.
Important Additional Aspects To Include In A Contract
There are several additional aspects that should be included in a lease agreement.
Specify The Number Of Tenants
When you approved the rental application of the tenant, it is important to specify the number of people who will move into your property.
The agreement will prevent the tenant to invite their relatives or friends to live with them without your permission.
Names Of Tenants
If the tenant is living with a companion, it is important to know their names and background. As the property manager, you have the right to acquire the names and signatures of each adult and include them in the list of tenants that are required to follow the terms of the lease.
Once you have the name and signature of the adult occupants, you can collect monthly rent from them. Then you can evict them all if either of them gives reason to evict (where they violate the terms and agreement of the contract.)
Terms Of Payment
It is important to include the allowed maximum days you will accept the rent late. You should also include the costs of late rent that can be allowed by law in your state.
You should also include the acceptable ways for payments and the amount of fee for delayed payments.
As the property manager, you have the right to permit or prohibit animals inside your property. If you allow animals, be sure to specify the number and what kinds of pets are allowed. Also, mention the tenant’s responsibility in keeping the rented property clean.
Final Thoughts About The Lease Term
The lease term is a very important part of the rental agreement. We took the time to discuss the different types of lease terms and how you can implement them into your rental agreement.
If you have any questions or thoughts about the lease term please add them to the comments below.
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