Know what should be included in a lease?
The Fannie Mae landlord guide offers a checklist of what you will need in your residential lease. You can use this guide to come up with your own standard lease, or use it to improve your current lease form:
The names and signatures of both the landlord and the tenant;
The date on which the lease was signed;
The address of the unit the tenant is renting;
The beginning and ending dates for the period during which the tenant has the right to rent the unit;
The amount of rent the tenant must pay;
The time when rent is due, along with procedures for collecting rent, any policies regarding late fees or penalties for returned checks;
The amount of any security deposit or advance rent the tenant must pay, and the circumstances under which the landlord will collect or return such payments;
The policy concerning whether a security deposit can be used as the last months rent;
The amount of notice required to terminate the lease;
Where and how such notices should be sent; and required disclosures, such as lead-based paint or other hazardous conditions.
Many leases also contain provisions covering the following: Whether the cost of providing heat, hot water, electricity, or other utilities is the responsibility of the landlord or the tenant;
Whether the tenant may sublet the unit;
How many people may reside in the unit at one time;
Whether the landlord or the tenant must take responsibility for making various types of repairs;
Whether the property can be used for business, car repairs, or other purposes;
Any policies regarding pets, overnight guests, parking,extended absences, or other issues;
Any types of alterations the tenant may be allowed to make and any restrictions against making alterations;
Tenant responsibilities for maintenance and damages caused by tenant;
llegal activities, disturbances, violations of laws, and ordinances;
When the landlord may enter the premises (in compliance with local law);
Any circumstances under which the tenant may be asked to grant access to exterminators, painters, or maintenance workers;
Any storage space(s) a tenant may use and any restrictions on items that can be stored; and
Late payment fees and attorneys fees for evictions.
Include clauses that allow you to raise rent In some locations, laws allow you to include an escalator clause in a lease. Such a clause allows you to raise the rent “by either a specified amount or by a stated percentage” if your real estate taxes or utility costs were to increase.
Other Provisions to Consider
A pet policy;
The right to show the property for sale or rent; and
A no-smoking policy.
Each state and locale provide different limitations on landlords and rental leases. Be sure to research so you know what’s okay–and what’s not, in your area. Fannie Mae suggests contacting your local rental office or government housing department for a list of local zoning, building and other codes affecting rental properties.
Have an attorney familiar with landlord laws review the lease or rental agreement to make sure that the lease protects your interests and to make sure that it does not include illegal terms. Fannie recommends asking a lending institution that make mortgage loans for homes like yours if they also have materials that contain sample leases or information on how to create a lease or a rental agreement.
With AAOA, landlords have resources at their fingertips. Check out our Landlord Forms page.
American Apartment Owners Association offers discounts on products and services for landlords related to your rental housing investment, including rental forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.