As a landlord, drafting a comprehensive rental agreement is essential if you want to avoid problems with your tenants in the future. A rental agreement should include all the terms and conditions of the rent, the do’s and don’ts for tenants, and the responsibilities that you expect from your renters and what they can expect from you.
Generally, a rental agreement, also known as the lease contract, should set out the rules and regulations that both landlords and tenants should agree to and adhere to. A lease contract needs to cover all the basic terms of the tenancy and other arrangements between the tenant and the landlord.
This post contains the most important things that you should include when creating a rental agreement when renting out your property.
1. Maximum Limit on Occupancy
The maximum occupancy limit should be indicated in the rental agreement. You should specify that the property will only accommodate the tenants who are included in the lease and their minor children.
In most cases, local building codes require a maximum capacity for a rental unit. And both the landlord and tenants must comply with this rule.
This also helps ensure that only those whom you have screened and approved are allowed to reside in the rental unit. By adding this clause, you hold the right to evict a tenant who lets a friend, relative, or anyone stay on the property without your permission.
2. Names of All Occupants of the Property
The names of all tenants should be included in the lease agreement. Typically, every adult who will reside in the rental property should be considered a tenant and sign the lease agreement.
As an adult, each tenant should be legally responsible for all terms and conditions stated in the lease. They should also know the full amount of the rent and how to use the property responsibly.
By letting all adult tenants sign the lease, you can legally go after any one of them to collect the entire rent should the others fail to pay. Also, it would be easier for you to legally terminate the lease if they violate a crucial term of the rental agreement.
Also, if you list all the names of the occupants in the agreement, you will know how many residents will occupy the property. This is to ensure that it will not violate the maximum capacity required for the rental unit.
3. Rent Amount and Term of the Tenancy
The lease contract should specify the amount of rent, when it’s due, how often it should be paid, and the acceptable methods of payment.
It’s essential to include important details like your bank account if you allow direct deposit as a payment method, penalties for rents that are not paid on time, the number of late fees, and whether you are giving a grace period and for how long.
If you accept cheque payments, you should also specify if you are charging any fees in case a check bounces. You should indicate if the rent will run from month to month and self-renew monthly unless terminated. If the rent is a fixed-term lease, which typically lasts a year, then you should clearly state so in the agreement.
4. Deposits and Non-refundable Fees
If you are charging a security deposit, this should be clearly stated in the rent agreement. Check with your local tenant-landlord law to see whether there is a specific rule about security deposits including the maximum security deposits to charge, and what disclosures you need to include in the agreement.
You should also clearly indicate what charges you can deduct from security deposits, and how long it would take for you to return the deposit to the tenants after the term ends. Any non-refundable fees, such as cleaning fees and pet fees, should also be included in the agreement to avoid confusion.
5. Repairs and Maintenance Policies
To avoid issues with your tenants, especially when it comes to security deposits, you should set out the tenants’ responsibilities for the upkeep and maintenance of the rental premises. What is considered normal wear and tear versus damage due to negligence and abusive behavior should be clearly stated in the lease contract.
It’s best to list all the duties you expect from tenants, such as maintaining cleanliness, sanitation, and safety within the property. You must also state what maintenance tasks fall on you as the landlord.
What’s more, it’s essential to require tenants to alert you in case they notice any defective or dangerous conditions in the rental property. Moreover, you should specify any restrictions on tenant-initiated repairs and alterations without your permission.
6. Rules of Entry to the Property
To prevent claims of illegal entry or violation of privacy rights, you should clarify your legal right of access to the property in the rental agreement. For instance, you can set a schedule for regular property inspections.
You can also include that you can enter the property to make repairs, as well as the advance notice you will provide before entering. By being clear you’ll make tenants feel more comfortable and foster a better landlord-tenant relationship.
7. Other Important Restrictions and Provisions
Other applicable restrictions and provisions should be clearly stated in the agreement, including but not limited to the following:
- Pet Restrictions
- Illegal activity
- Street parking limitations
- Garbage collection
- Guest restrictions
- Parties, gatherings, and noise limitations
- Sanitation issues, including odors from food and garbage
- Subletting the property
- Health and safety codes
Drafting a lease contract or rental agreement can be a tedious and time-consuming task. It can also create legal issues if you don’t know what to include. To be safe, it’s best to work with an experienced and reliable property management company to help you with this.
If you need a property manager in Regina, contact Cressman Realty and Property Management today. We look forward to answering any questions you have about our management services!