Leasing Essentials in Property Management
One of the most important jobs in property management is to draft an effective lease agreement. This document has to cover all the critical points of a tenancy agreement; otherwise, it can lead to strained relationships with the tenants, unnecessary legal disputes, and costly lawsuits. Before presenting the lease document, make sure you have covered everything that is important. Here are some of the essential aspects that should be included in any lease agreement.
The lease agreement should obviously have a detailed portion on rent. This may appear quite straightforward, but it is important to spell out everything in detail. The usual rental terms will include the amount of rent, the due date each month for making the payment, and penalties for late payments. If the owner has an accommodating policy, a certain grace period can also be included after the due date.
Permission to Enter
It is very necessary for the tenant to specify when entry into the residential unit is permissible by the owner or property management. Under this clause, you could also mention if a notice is required for the entry, and what circumstances would supersede any restrictions. It is obvious that at times of emergency, permission will not be necessary, but it is better to spell out these exceptions. It is important to be clear on when you can enter the unit, so that the tenant is not annoyed and there are no legal complications.
Repairs and Maintenance Responsibilities
In most residency complexes, maintenance responsibilities are shared by the owner and tenants. The lease agreement should clearly define what maintenance responsibilities the owner is willing to undertake and what is going to be left to the tenants. For instance, if the owner is responsible for all structural maintenance and the tenant is responsible for the lawn, then it should be clearly stated.
If the costs of certain repairs are to be shared, then these repairs should be clearly enumerated along with the ratio of sharing. If the owner does not want the tenant to do any major changes in the unit, such as the installation of ceiling fan and so on, then it should be clearly stated in the lease agreement.
It is better to have a separate section for covering the different deposits; you are going to take from the tenant. These deposits could be for keeping pets, as a security, or for having the apartment cleaned. Clearly mention if such deposits can be used for paying the last rent. For each deposit, mention clearly, if the amount is refundable and under what conditions.
Even though you are going to screen your future tenants thoroughly, before committing to a lease agreement, it is necessary to have clauses that cover consequences of any illegal activity on the premises. There are many instances where the tenant is involved in illegal activities like distribution or manufacture of drugs, and uses the premises for engaging in these activities. Make things quite clear as to what actions you are going to take if the tenant is caught doing any illegal activity. They should know that these actions will not be tolerated and if the tenant pursues them, they will have a witness against them in any court of law.
This is why you should have a police officer who lives in the complex (offer them lower rent to attract an officer) who can squash these matters before they germinate.