Writing a lease agreement from scratch can be a daunting task. What do you include? What if you miss something important? What if your lease agreement is not legally acceptable? Creating a lease agreement often requires knowledge, expertise, and experience. Writing a lease agreement is one thing, but understanding it is another. This goes for both the tenant and landlord. While it is imperative to protect yourself and your property as a landlord, it is also important that the lease agreement is easy to understand for both parties. Just because a lease agreement is a legally binding document does not mean it has to have verbiage that is impossible to understand. This eliminates confusion on both sides and promotes an easier rental process. The essentials of a lease agreement include the following:
- The Orlando rental property management company or private landlord agrees to provide a habitable living space
- The tenant agrees to pay for that living space while taking proper care of the property
If only a lease agreement could be that short! We know most leasing agreements are not two sentences long. There is much more detail that goes into writing and abiding by the lease agreement. This is where details can be missed or overlooked if not careful. Lease agreements must also take into account the rights, obligations, and responsibilities of both parties. It should clearly state all penalties for failure to comply with the rules in the agreement and should outline rights and legal protections for both parties. Just like anything else in property management, putting it in writing protects both tenants and landlords in a sticky situation. A lease agreement is generally one of the first “paper trails” created when an Orlando rental property management team leases a property to a new tenant. Protect yourself and do it right the first time. Failure to get it right can cost landlords big bucks and headaches in the end. Below are some guidelines that can assist you in writing a lease agreement.
How to Write a Lease Agreement and What to Include
Would you be surprised if I told you that the majority of tenants do not read their lease agreement? The reason for this is because of the length of the lease agreements and the difficulty in comprehension. In addition, property managers should be well versed in the lease agreement so that they are easily able to explain what each paragraph says. Due to this, tenants often find that there is not a need to read the lease themselves. When a tenant reads a lease agreement fully, it removes liability from a landlord because it is the tenant’s responsibility to make sure that they understand and comply with the agreement. Orlando rental property management teams would be wise to encourage tenants to read the lease, even if it takes them an extended period of time. Afterall, their signature at the bottom of the lease agreement puts them on the hook for compliance to the rules, and takes a landlord off the hook.
The beginning of a lease agreement should contain the names of all authorized tenants, including minors, that will be living in the property, along with the address and a clear description of the property.
Rent Collection Rules
Orlando property management services should clearly state the rental price that is due each month, what day it is due, and how residents can pay it. It is also important to outline in this paragraph what will happen in the event that rent is not paid, if there are insufficient funds charged to a bank account, or the consequences for a late payment. Ensure that tenants fully understand this paragraph.
One of the most common disputes amongst Orlando rental property management companies and tenants is the return or refund of a security deposit. Include a detailed paragraph outlining the security deposit amount and application fees that have been collected. A security deposit is generally equivalent to one month of rent, although Nolo states that Florida does not have a limit on security deposit amounts. Security deposits for pets should also be included in this paragraph of the lease agreement. It is permissible to charge a pet deposit, but it is illegal to charge a pet deposit for a service animal. Clearly state what the security deposit is used for and how residents can expect deductions from the deposit depending on the condition in which they leave the property upon move out.
Keeping a property well maintained is in the best interest of both the tenant and Orlando rental property management teams. No one wants to live in rundown housing and landlords know that taking a careless approach to house maintenance only leads to a higher cost of repairs and replacements. A lease agreement should explain how tenants can report maintenance, what qualifies as a maintenance emergency, and the entry process to perform maintenance.
Of course a landlord does not plan or want a lease agreement to be terminated early, but special circumstances can arise making it necessary to terminate a lease. A lease may be terminated at any time if both parties agree to the termination. Terminating a lease agreement can get more complicated when there is a failure to pay rent or when unplanned circumstances come about. When writing a lease agreement, make certain that you are following federal, state, and local regulations and laws regarding early lease termination.
Easily the most dreaded subject when it comes to Orlando rental property management is evictions. If a tenant fails to pay rent, property management and landlords should notify the tenant and give them a specified amount of days to either pay rent in full with a late fee or vacate. If they still do not pay and have not moved out, an Unlawful Detainer may be filed. Consult your attorney prior to filing an Unlawful Detainer to make sure that you have grounds for an eviction.
Compliance to Fair Housing Laws
The U.S. Department of Housing and Urban Development states that it is illegal to discriminate in rental housing under the Fair Housing Act. The FHA protects individuals from discrimination based on race, color, national origin, religion, sex, familial status, and disability.
The Americans with Disabilities Act prohibits discrimination in housing for persons with physical and mental impairments that substantially limit major life activities. Renting to persons with a disability that are seeking reasonable accommodations to be made to the property should be granted in order to stay in compliance with the ADA law. Lease agreements should follow these guidelines of non-discrimination. Orlando rental property managers should allow a form for those renting who fall under the protected class of ADA laws to submit a reasonable accommodation request if needed.
HUD also prohibits discrimination in advertising and marketing a rental property. This means that property management teams and landlords cannot publish advertisements that indicate a preference in renters based on race, color, religion, sex, disability, familial status, or national origin. Compliance to laws, in addition to clearly stating rent collections, are perhaps the most vitally important parts of any lease agreement written by Orlando property management services.
Get It in Writing
It is difficult to prove agreements between two parties in court if they are verbal. This is why Specialized Property Management has all lease agreements, even if they are short term agreements, in writing. A written agreement helps both parties understand responsibilities and gives them the opportunity to fact check any misunderstandings. Before presenting a lease agreement to a tenant, consult with a real estate attorney to make sure that the agreement is legally binding and in compliance with federal, state, and local laws. Though a lawyer may charge a fee to review the contract, doing so has the potential to save landlords and Orlando rental property management companies from expensive mistakes that could exist in a poorly written lease agreement. Some common mistakes made by landlords include failure to comply with fair housing laws, habitability laws, disability laws, or maintenance. In addition to double checking a lease agreement prior to signing it with a tenant, landlords must document everything. Prior to signing a lease agreement, applications were submitted. Keep this documentation even though the lease agreement is the legally binding document upon move in. In addition to keeping copies of the lease and applications, document all maintenance requests and interactions between landlords and tenants. If a lawsuit arises in the future, a paper trail of maintenance requests, conversations, and lease agreements will often assist a landlord in a lawsuit.
How SPM Orlando Rental Property Management Can Help You
Generating lease agreements is just one of the many ways that Specialized Property Management in Orlando assists landlords. We cover all things property management including advertising, showings, turnovers, lease signings, applications, maintenance, property inspections, move ins, move outs, and so much more. For a free, no obligation quote on property management services, contact our Orlando office today at (407) 682-3355.