Top 5 for lease agreements

[Gregory Massi]

Hello everyone. I am purchasing my first investment property in two weeks and was wondering what are your top 5 rules/policies/terms that you like to include in your lease agreement (that aren't found in the typical lease agreement)? In other words, what specifically do you like to add to the lease agreement? ie tenant is responsible for checking the smoke detector battery every six months..

[Elizabeth Colegrove]

I know this isn't the top 5! but this is what keeps me out of trouble. It ends up being a 14 page lease but worth every bit!!

I wrote an article on  everything I put in my lease. Plus a few new things such as a $100 deductible.

Tips:

• I keep the lease blank. This way we can go over the lease together with the tenant filling it out in their handwriting.
• I have the tenants initial after every addendum. This prevents the “I didn’t see it” syndrome.

These are the things that I add to my lease. I have found a strong lease is more rather than less specific. Like always check your local real estate laws.

Addendums:

Automatic Lease Renewal – After the original terms of the lease have ended. I add a $300 charge to leases renewing month to month. Meaning that my tenant can give me 30 days notice and leave, with no consequence. The same for myself.I don’t want my leases going month to month because my markets have definite “time of years”. Therefore this charge helps influence resigning of the lease even if I increase rent.

Late Fees- I charge 10% of the monthly rent because rent shouldn’t be late. Rent is due on the 1st, late on the 6th which includes the 5 day grace period.

Pet Fee: I love pets for many reasons. On the other hand, animals behavior is directly related to the owners care. In order for both side to have “skin” in the game I have either a $50 a month pet rent OR one months security deposit. I define the exact name and age of each pet. It prevents your tenants from house sitting, fostering or getting a new animal without your expressed permission.

Utilities: My tenants pay for all utilities including landscaping.

No Smoking: I do not allow smoking and charge a $500 fine in addition to any damages if smoking occurs in the house.

Maintenance: I reserve the right to only pay for repairs that I authorize in writing. I only pay for repairs I approve.

Lease Termination Provision for Military Personnel: My lease allows both parties to be able to break the lease with military orders. This provides us the opportunity for us to move back into the house if we, the landlords, receive orders back to the area.

Tenant Assumes Responsibility for the following Routine Maintenance:

• Granite and stainless steel appliances if applicable.
• Yard Maintenance to include mowing, edging, feeding, seeding, maintaining sprinklers, etc.
• Tenant is responsible for thy smoke/CO detector. The tenant is responsible for changing all the batteries and alerting (by written notice with a written response signifying the letter has been received) the landlord to when they are no longer in working orders.
• Tenants are responsible for all windows.
• Tenants are responsible for the flooring.
• Air Filters are the responsibility of the tenants. Any damage incurred to the AC system by filters or lack of, will be the tenants responsibility.

This list is not completely inclusive. Your lease will have more or less depending on your needs.

Steam Cleaning: I require the tenant to professionally steam clean the carpet upon move out and provide the Landlord with receipts.

Professional Cleaning: Tenant is required to return the house in the manner such that it appears to be professionally cleaned. If there are any questions, I reserves the right to professionally clean the house at the tenant’s expense.

Landscaping: Tenant is held accountable for all yard responsibilities. Tenant understands that if this house is located in an HOA they are responsible to abide by the HOA rules. Tenant is responsible for watering the lawn per city code/HOA code. If the yard deteriorates due to mismanagement, tenants will be held responsible.

Fines: Landlords are not responsible for any fines that the tenant receives. All fines will be taken care of by the tenant immediately. Landlord using Tenants Security deposit will pay any fines not paid by the tenants on move out. A processing fee to equal to the total fine (including fees, penalties and any other charges) will also be taken out to compensate the landlord for handling.

Keys, Garage/Gate Remotes: If Tenants or their guests break, lose, damage, or lock themselves out pertaining to keys, garage or gate remotes than the tenants are responsible for any cost replacement, locksmith or other cost to rectify the situation. If the locks must be changed for any reason due to the tenant’s fault, the landlord must be informed and provided a set of keys upon the replacement of locks.

Damages: Any monies received, will be applied to damages or fees, first. Rent will be applied second.

Renter’s Insurance: Tenants are required to carry renters insurance in thy amount to cover their personal property and liability. Landlord assumes no responsibility towards tenants, or any of their guest’s personal property.

Buy Out: This allows either the tenant or the landlord to break the lease without penalty as long as they have provided 60 days’ notice and a two months break lease fee. 60 days notice begins on the day that the fee is received. If the tenant moves out before the end of the 60 days notice, the additional days will be assessed as a fee.

Pest Control: Pest Control is the tenant’s responsibility with the exception of termites.

Home Business: Home Business are not allowed to occur within the house structure or on the premises. Violation is grounds for eviction and a $1,000 fine.

Hope this helps! Please note that my audience is class A investments. I self manage from a distance with professionals that have things to lose.