A lease agreement binds the lessor and lessee to certain agreed terms. The agreement contains the rules binding both parties as well as the responsibilities expected of both parties. This document also contains information about how certain issues that may arise later in the relationship will be handled. As rental property managers, knowing what to include in a lease agreement can help you to address certain conflicts down the line better. Below are some of the most important information to include in your lease agreement.
One of the most important pieces of information that should be contained in your lease agreement is the lease term. Clearly stating the lease term helps ensure that the tenant does not overstay his or her agreed duration on the property. Depending on the initial agreement, the lease term can be anywhere between a couple of months and some years.
Kindly note that the lease term is dependent on the kind of property that is being leased. Vacation homes tend to have a shorter leasing term compared to single-family homes. When leasing a vacation home, the chances that the renter will be there only for a few weeks exist. However, for a single-family home, the family may wish to lease the property for no less than one year.
Early Lease Termination Agreement
As part of the contract, you need to consider the chances of early lease termination. In some cases, a tenant may wish to terminate the lease before the end of the lease term, or the lessor may choose to terminate the agreement ahead of the agreed term. In such instances as this, this section of the contract will guide both parties on how to proceed carefully.
To ensure that all bases are covered, be sure to consider aspects and what to do if:
- The tenant terminates the lease early but considers subletting the rental unit to prevent income loss
- Who will bear the marketing fees to advertise the vacant property?
- Should the tenant be responsible for the payment of the remaining rent until their lease is due, or would they be required to pay rent until a new tenant is found?
Considering all of these questions can help you to put together a solid lease agreement.
Your lease agreement should also state the rent rate that is being charged on the property, as well as other charges. This allows the tenant to know how much is required of them in payment monthly. In addition to this, you should also state the terms to abide by when renewing the lease for the property. If the tenant has qualified for any discounts, be sure also to include this in the lease agreement.
Rent collection can be a major problem when not properly stated at the start of the arrangement. Be sure to include the form of rent collection, including clash, Interac e-transfer, cheque, pre-authorized bank withdrawals, post-dated cheques, debit or credit card, or other forms of payment. You should also state the date when rent is due for collection each month. Most people collect rent on the first day of each month.
Late Fee Penalties
Late fee penalties are included in the agreement to discourage renters from defaulting. However, you must clearly state what the late fees are and how to handle late payments. In some documents, property owners offer a grace period after which the late fee comes into play; in others, once the rent due date is missed, a late fee takes action.
Knowing the rules and regulations that bind both the lessor and lessee enables both parties to hold up to their end of the contract. Learn more about property management at https://myhomespot.com/
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