Why A Rental Lease Agreement Template Is Needed

“Why A Rental Lease Agreement Template Is Needed” written by Mike Marko

Are you one of those people planning to rent out property? 

Drawing up a rental lease agreement template is one of the things you need to do if that’s the case. You’re probably asking why.

Simply, this template protects your investment in your rental property. Without a rental lease agreement template, you’re likely to run into various problems.

You might be stuck with an unruly tenant who causes damage to your property, for example. Or you might get into a dispute with a tenant over an issue like subletting.

A good rental lease agreement template can protect you from such eventualities. It lays out the terms and conditions of tenancy in your property so that there need never be misunderstandings.

In this article, I will discuss more reasons why you need to have a rental lease agreement template. I’ll also show what the average rental lease agreement template comprises.

The Importance of a Rental Lease Agreement Template

The key to a successful rental business is to create a genuine rental lease agreement template. It makes the agreement between the landlord and tenant explicit in a standardized, official document.

In other words, it dispenses with any uncertainty as to the terms of a rental contract. Provided it has distinct signatures from both parties, it’s also a valid legal document

Through this, both you and your tenant will have a clearer view of the agreement that binds you. That’s why you can’t do without it if you want to rent out property.

Unfortunately, not everyone knows what goes into a rental lease agreement template. We can clear that up right here by discussing what such a template entails.       

What Is a Rental Lease Agreement Template

A rental lease agreement template is a written document that legally recognizes the agreement between the lessee and the lessor. 

All agreed-upon terms between the two parties are stipulated in the template. Thus, anyone seeking a reference for the terms of the tenancy need only check the template.

There are certain clauses you can usually expect to find in a rental lease agreement template.

Clauses and Terms in a Rental Lease Agreement Template

A rental lease agreement template typically includes certain terms and clauses. For example, you can expect it to have a description and the address of the property concerned. 

If you’re not sure what else to put in your rental lease agreement template, I’ll give you some more important elements here. Below are other important clauses that are often in a rental lease agreement template.

Parties Involved in the Lease Agreement

A rental lease agreement has to provide the specific names of the tenants and landlord. Towards the end, it should also have a space for their signatures.

This is par for the course with any written contract. It means that both parties are accountable for the agreement.

Duration of the Lease Agreement

Every rental agreement should properly indicate the start and end date of the lease term. It must also indicate the process of how and when the rental agreement can end. 

It’s important that both parties must have a clear understanding of this clause to avoid issues concerning the tenancy’s end

Security Deposit Clause

Agree on the exact amount that the tenant must pay as a security deposit. Normally, the security deposit is set at one to two months rent. 

Include the ways you will return the tenant’s security deposit. All agreements about the security deposit should be made clear prior to official renting. 

I advise that you go into detail in this part of your rental lease agreement template. That way, you won’t get into a dispute with your tenants over how you can use the security deposit at the end of their tenancies.

Occupants of the Property

This clause should specify that the unit is exclusive to tenants who signed the lease. Include the names of every person who will have the right to regularly occupy the property. 

In this part, make sure to include all occupants, from minors to adults. That should clarify who is permitted to actually live in the property, as opposed to just visiting it.

Pet Policy Clause

Prior to renting, the property manager should specify if pets are allowed. 

If it’s allowed, make sure that your pet policy is properly stated. For example, state if you only allow a certain number or size of pets.

Repairs and Maintenance Clause

The repairs and maintenance clause sets the responsibilities of both parties concerning the upkeep of the property. The clause also covers the tenant’s responsibility to keep the premises clean and without damage, from start to end. 

This clause also includes restrictions on repairs or alterations that tenants may make. Generally speaking, it should stipulate that tenants require the landlord’s or property manager’s permission before making lasting repairs or alterations.

Right of Entry to Rental Property

The last clause you need to consider is the right of entry to the rental property. 

The property manager usually has the right to visit and inspect the property. Thus, in this clause, you should state how and when the property manager can visit. 

The property manager is generally encouraged to give reasonable notice prior to visiting and inspecting the property. This is to respect the privacy and preparation of the tenants.

Reasons to Have a Rental Lease Agreement Template

So now you know what the rental lease agreement template usually contains.

It provides a legal record of the agreement between the property manager and the tenant. It helps set concrete expectations for both and provides an answer to possible questions that may arise relating to the tenancy.

If that still doesn’t tell you why you need a rental lease agreement template, let’s go into more detail below. Here are the reasons you need a rental lease agreement template:

Serves as Legal Proof

The lease agreement will serve as legal proof under certain circumstances. It may be required in situations where the tenant defaults on the rent, for example.

Both the tenant and property manager is obliged to put their signatures on the template, as I said earlier. Once that happens, the document makes the agreement enforceable.

Hence, in a situation where a tenant defaults on rent, you can take any action stated as an option in your lease agreement in response. 

If your agreement says you can initiate eviction, for instance, you can go ahead and do that.

Contributes Possible Solutions to Problems

A lease agreement can also contribute a possible solution if certain problems arise. It depends on how you set up your rental lease agreement template.

For example, most templates will state that a late fee can be fined if the tenant fails to pay rent on an agreed-upon date. 

In that case, the late fee may be the legal redress the landlord wants for the inconvenience of a late rent payment.

Organizes Successful Tenancy

You can organize a successful tenancy if you and your tenant are clear on both your rights and obligations in the property and to each other. A lease agreement can help there.

The best lease agreement templates leave no room for uncertainy as to tenancy terms. They make everything crystal-clear so all parties are always aware of what they can and can’t do.

That means fewer headaches and less back-and-forth between you and your tenant. In short, you’ll get a smoother-running rental business.

Final Thoughts on Creating a Rental Lease Agreement Template

In this article, we discussed the reasons creating a rental lease agreement template is necessary

A rental lease agreement template gives a clearer view of the agreement that binds both parties in a tenancy. All agreed-upon terms between the lessee and the lessor are stipulated in this template.

The agreement thus serves as legal proof of the contract between the two. It helps to set concrete expectations for the tenants and provides an answer to possible questions that may arise. 

As such, the rental lease agreement template is mandatory for any well-run rental business.

If you found this article informative or have further concerns about the use of a rental lease agreement template, feel free to leave a comment below.

 

 

 

Suggested Articles:
1. How Property Managers Conduct An Employer Background Check
2. How To Make A Rental Property Profitable
3. Tutorial On How To Make A Standard Lease Agreement

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Article: Why A Rental Lease Agreement Template Is Needed

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