Author Topic: Writing a bulletproof rental lease  (Read 4491 times)

brandino29

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Writing a bulletproof rental lease
« on: August 05, 2013, 09:27:06 PM »
Our first adventure into the world of owning rental property is slated to begin sometime next week when we close on a small 2 bedroom 1.5 bath home nearby.  Does anyone with more experience have any advice for putting together a great rental lease agreement?  I know there are plenty of templates out there on The Internets but I was hoping to hear others stories of what they've learned to include, exclude, etc.  I know you can't plan for every possible thing but I want to be sure we're doing the best job we can in protecting our investment without being insufferable Nazis about it. 

For example, I don't want smokers inside and I'm 50/50 about animals.  I love dogs myself and know that there are plenty of people out there like us who make sure their dogs are well-behaved and completely house broken and I don't want to automatically turn them away by having a hardline no pets policy, but I also recognize that there are tons of people out there that literally let their dogs shit in the house and step right over it. 

I'm on the fence about whether to include yard maintenance as part of the tenants' responsibilities or not.  I don't really want to load up my lawn mower every week to drive across town to cut the grass but I also don't want it to go weeks without being cut and look like crap.

I'm sure lots of it is just going to be live and learn but I'm hoping it's a lot more living than learning.

TrulyStashin

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Re: Writing a bulletproof rental lease
« Reply #1 on: August 06, 2013, 10:56:31 AM »
Each state's law is different regarding LL-tenant rights and responsibilities so be sure to spend some time perusing your state's code (you can almost always find it online and do a search within the code for "tenant's rights." 

That's a start.

Undecided

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Re: Writing a bulletproof rental lease
« Reply #2 on: August 06, 2013, 12:55:45 PM »
In addition to the inspection/emergency access rights that are typically included, specifically reserve the right to post a customary "for sale" sign and show the building to prospective buyers on reasonable notice. This may be an area that is subject to specific state and local law, which may or may not permit you to alter the default terms.

willn

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Re: Writing a bulletproof rental lease
« Reply #3 on: August 07, 2013, 02:33:19 PM »
I'd say no dogs, or cats. They can absolutely destroy your ability to rent it out quickly when a tenant's problem pet becomes a...problem.

Check local laws.

Your best bet, (since contracts don't really protect you, they just spell out the rules, which people can go ahead and break):

Get a great tenant.  Be patient.  An empty month while getting a good tenant is cheaper than having someone tie it up with an eviction or no payment for months on end.  Get as much deposit as is legal in your area. Listen to the nerves in your gut and chest when you meet them.  Don't call their previous/current landlord--he may want to get rid of them--call the one before that.  Charge them for credit report along with a rental application, lying means the lease will be terminated. 

But credit score isn't the biggest factor, rather, ask to see their budget. See how much debt they have. Do they have to commute far to their job? Do they have a huge debt load?  Do they have a criminal history?

Basic leases are easily found.  Some clauses to consider: No adult roommates without them being on the lease.  No visitors longer than 2 weeks without your written permission.  Must maintain yard, must shovel snow according to local laws.  Smoking is grounds for termination.


AlmostIndependent

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Re: Writing a bulletproof rental lease
« Reply #4 on: August 07, 2013, 03:31:36 PM »
Check your local laws. This is important. Find a form you like and change it to suit you making sure that all of the clauses are in compliance with the laws in your area which you researched thorougly because it is important.

brandino29

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Re: Writing a bulletproof rental lease
« Reply #5 on: August 07, 2013, 03:45:43 PM »

Get a great tenant.  Be patient.  An empty month while getting a good tenant is cheaper than having someone tie it up with an eviction or no payment for months on end.

This is definitely in our plan, we're also not intending to post a for rent sign or put it in the newspaper to start off either, but planning to target certain population groups.  For example, we have a number of friends that are medical residents, often from out of town, young, steady income, usually very responsible, and most of their time is spent working and free time is spent sleeping or studying.  Fortunately, we could easily stretch our budget to cover the mortgage on the rental indefinitely, although obviously the goal isn't to pay it off ourselves but for the renters to do that. 

Charge them for credit report along with a rental application, lying means the lease will be terminated. 

I'm hesitant about doing this.  I know that charging an application fee is common practice in some areas but I've never in my life been charged one and I don't know of anyone around here who does that. 

Each state's law is different regarding LL-tenant rights and responsibilities so be sure to spend some time perusing your state's code (you can almost always find it online and do a search within the code for "tenant's rights." 

That's a start.

I'll have to call the county and city courthouse to see if there are local ordinances beyond state code.  The state legislation I found, in professionalese, is generally very basic stuff about repairing issues quickly and providing sufficient notice prior to evicting a resident. 

Daleth

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Re: Writing a bulletproof rental lease
« Reply #6 on: August 12, 2013, 07:16:54 PM »
Each state's law is different regarding LL-tenant rights and responsibilities so be sure to spend some time perusing your state's code (you can almost always find it online and do a search within the code for "tenant's rights." 

That's a start.

Just go to a real estate lawyer or see if there's some sort of local group of landlords (many cities have groups, like social clubs/educational groups, of people who do residential real estate investing) that has a lease they recommend members using. The laws are state by state and in some cases even city by city (e.g., there are some different rules inside New York City or San Francisco than outside). Many states have recommended leases you can get off their websites, but they're not slanted towards the landlord, which obviously you want your contract to be if you're the landlord. That's where the real estate lawyer or landlords' group comes in.

You can look up laws and go to the courthouse all you want, but the amount of time that's going to take you, plus the fact you aren't a lawyer, makes that one of those penny-wise and dollar foolish options that people sometimes suggest around here. I got my lease from a lawyer, and I'm a lawyer myself! Writing your own lease reminds me of the old saying, "The lawyer who represents himself has a fool for a client."
« Last Edit: August 12, 2013, 07:18:59 PM by Daleth »