When is the last time you reviewed your lease agreements? Routinely reviewing these documents is a good habit to implement! An incomplete lease leaves property owners vulnerable to lawsuits from bad tenants and other legal problems. Without a strong lease, landlords risk losing income.
As an expert Orlando property management company, we've reviewed and created plenty of leases for various rentals and investors. If you haven't taken a close look at your lease agreement lately, it's time to make sure it doesn't have any gaps and does include these seven critical elements.
The Goal of a Lease Agreement
The ultimate goal of any lease agreement is to hold tenants and property owners accountable. The lease agreement requires property owners to deliver safe rental homes for residents. Tenants must follow the rules in the lease and pay the rent on time. A lease agreement must be a two-way street and becomes a legally binding document the day a property owner and tenant sign it to start a new lease term.
Risks of a Faulty Lease Agreement
Without an airtight lease, landlords, properties, and investment income are at risk! When a lease agreement isn't thorough or misses critical elements, a tenant can take advantage. Orlando property management professionals see tenants take advantage of lease contracts all the time. Difficult renters know how to spot a loophole or a gray area, then exploit those weaknesses to skip out on rent payments, break leases early without any repercussions, and get away with property damage. Property owners face expenses problems when a renter finds a hole in the lease!
If you're not sure if your lease holds up in court or protects your properties effectively, take a close look at it. Work with an Orlando property manager to create solid leases and enforce rules that apply to past due rent collection and other rule violations.
Your Lease Needs These 7 Elements
What should an excellent rental property lease agreement include in the city of Orlando? If your lease is missing any of these items, it's critical to update them for the next lease term and create an addendum to any existing leases.
1. Information on the Parties
The lease should include contact information for all tenants and yourself as the property owner. This allows landlords to keep track of who is allowed to live in the property and identify any "extra" residents that move in without permission. Having correct renter information also helps property owners enforce the lease when they find a violation.
2. Property Information
Double-check the property's information in every lease. These details should include the property's physical address, basic information about the home and property, and the parcel number. There should be no question about which property applies to the lease! Make sure the address is correct and doesn't contain typos.
3. Terms of the Lease (Including Termination)
What are the basic terms of the lease? Every lease agreement must include the length of the lease and details on lease termination procedures. Tenants should know how and when can a lease termination occur and the process to end a lease early. Be sure to include details about penalties for ending a lease early or without notice.
4. Rent Amount and Due Date
To enforce on-time rent collection, the lease must include the lease amount and the date it's due every month. The document should also detail what happens when rent payment does not occur on time. Outline a late fee assessment schedule and note when a payment is considered "late" and if a grace period applies for first-time payment delays.
5. Security Deposit Details
What is the security deposit amount you plan to collect when the lease agreement signing takes place? The lease agreement must detail the amount and when the payment is necessary. Make sure to include details about what tenants need to do to receive the full deposit back after move out and what can cause them to lose part or all of the deposit at the end of the lease.
6. Obligations and Rights to Maintain the Property
Tenants and landlords are responsible for maintaining a rental property. While rental owners must deliver routine maintenance services and repairs to deliver safe rental homes according to the law, tenants must also take good care of your rental.
Make sure the lease outlines your resident's responsibilities, including lawn care, taking out the trash, levels of expected cleanliness, not leaving broken cars in the driveway, and anything else that applies.
7. Legal Disclosures
Work with your legal counsel and Orlando property management company to make sure your lease includes required disclosures to comply with local, state, and federal laws. Rental property experts understand the law and how to get the correct disclosure wording in place.
Review Lease Agreements With a Property Management Company Today
A strong lease is one of the most important aspects of success as a real estate investor in Orlando! If you think it lacks protection, hire an Orlando property management professional today. Verandah Properties can review your lease and make appropriate changes to ensure its compliance with the law. We also create leases to protect your investments and income, then enforce violations with tenants! If it's time for a lease review, let us help.