“Creating Your Own Rental Lease Template” written by Mike Marko
Need to lease one of your properties?
Before you lease, it’s best to prepare all the necessary documents first. That would help the leasing process run as smoothly as possible. Creating a rental lease template is a part of it.
Some states don’t require you to use a standard lease agreement form. That means you’re free to create your own.
In creating such a template, however, there are clauses that you need to include. These clauses must be clearly stipulated in your own rental lease template to avoid any misunderstandings between you and your tenant.
In this article, I’ll provide all the necessary parts of a proper rental lease template.
Necessary Parts of a Rental Lease Template
A rental lease template is a legally binding contract between you and your tenant. This allows both parties to examine all important agreements that come along with the leasing process.
This template includes parts that you need to have to expect a good outcome for your leasing. Here are the important clauses to include in your rental lease template:
The Basic Clauses
A rental lease template must include certain basic terms and clauses. These include listing the property manager’s name and the tenant as parties involved in the agreement.
By listing the names of both parties, it gives them the right to be directly involved with all the rules in the agreement. That’s an important point for legal reasons.
Another necessary inclusion is the physical address of the property with a brief description about it. In the agreement, there should be a part that describes the location of the property and all aspects that relate to it.
Also, you need to include in the rental lease template the term of the lease by determining the exact duration of the occupancy.
There are two types of lease terms, the month-to-month lease, and the fixed term lease. As a property manager, you need to set an agreement with the tenant to choose one of these leasing terms.
A month-to-month lease is an arrangement in which the lease may be terminated after giving notice, typically at least 30 days in advance.
This type of lease is more flexible since tenants won’t have to pay a penalty or lose a deposit if they decide to live elsewhere.
It’s also flexible on your end. You can even raise the amount of payment you can require, although tenants will have to agree to it first, obviously.
A fixed-term lease is an arrangement in which the tenant agrees to stay and pay rent for the period of time indicated in the rental lease contract.
A tenant who violates the agreement will lose their deposit and be obliged to pay a rent violation penalty. This is best for tenants who are planning to stay on the rental property for years.
Security Deposit Clause
A security deposit is any money a property manager takes from a tenant other than the advance payment of rent.
The security deposit serves to protect the property manager if the tenant violates the terms included in the rental lease template.
Under this clause, you need to specify the ways the tenant will pay and withdraw the security deposit after the lease term ends.
Specify in the rental lease template that tenants are responsible for maintaining the cleanliness and order of your property. Tenants must also be informed that they need to maintain order on your property until the leasing term ends.
Also, you might need to set a rule that states that they must ask for your permission prior to any repair within the premises. Repairs in your property must only be done after getting your approval.
Warning of Concealed Defects
As a property manager, you must warn the tenants of any concealed defects in the property by giving them a prior orientation about it. Through this, your tenant can at least avoid possible accidents.
Disclose the defect of any part of the property by writing it in the rental lease template. And provide the tenant with an assurance that you will fix the defect at a specific time.
Under this clause, it’s a requirement for the tenant to obtain the property manager’s permission before turning the rental over to anybody. If possible, you need to have a new security deposit and lease agreement for your protection.
Not only that, you should also meticulously perform a background check on the new tenant. Through this, you can find out if this new tenant is suitable for your property leasing.
Most importantly, it’s best to end the original tenant’s lease and begin the process from scratch with the new tenant.
Keep in mind that you can also state in your rental lease template that you disallow subletting, though. It’s still your choice whether or not to permit it in your property, after all.
Include the rules on terminating a lease by detailing the steps in the rental lease template.
Termination occurs at every end of a non-continuing lease term. Provide your tenant with a notice of termination so they’ll be prepared.
Every state has different rules for notification requirements, though. So I suggest you check the rules on your state regarding this.
In the main, there are two basic types of termination:
Termination with Cause
The tenant will be asked to pay the rent within the allotted time or quit, also known as the “pay or quit” method.
Another option is to ask for an apology or the “cure or quit” method. However, a property manager can also terminate with no restrictions or the “unconditional quit” method.
Termination Without Cause
If a termination without cause happens, you need to specify the termination with either 30 or 60 days of prior notice. Take note that termination without cause may not be lawful in your area, though — so check your state’s rental laws!
There is a possibility for the property manager to file an eviction lawsuit if tenants refuse to move out after the notice.
Final Thoughts on a Rental Lease Template
In this article, I provided you with the necessary parts of a rental lease template.
As a property manager, you need to be ready for all the documents that are involved in the leasing process. Your own rental lease template is one of the documents that you must have.
The necessary clauses when you create your own rental lease template are the following:
- Basic clauses and terms,
- Security deposit clause,
- Property maintenance clause,
- Warning of concealed defects clause,
- Subletting clause, and
- Termination clause.
Following the above list can help you create a unique rental lease template for your property leasing.
If you find this article informative or have further concerns, feel free to leave a comment below. I can answer any further queries you might have about making a rental lease template!
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