A rental lease contract is a legal document between both landlord and tenant. Every lease is unique to the situation it represents. However, there are certain “must-haves” an excellent rental contract must include. Keep reading to learn about five essential clauses to include in your next rental lease agreement.
Identification of all relevant parties
Your lease agreement must identify who the contract involves. In the case of a lease for a rental property, this agreement is between the landlord and the landlord agent and the tenants that will be occupying the property all the must-have their name listed on the lease. In addition to stating all tenants, the properties physical address needs to be recorded.
All rental property lease agreements have to distinguish who the contract is between. Specifically, for a rental property lease agreement, the two parties involved are the property manager, property owners, and tenants who are staying at the address. This Clause identifies all parties over 18 staying at the lease as well as the owner and property manager.
An example of a clause commonly found in rental property lease contracts:
This lease is between (Insert Tenants Names) and (the landlord or property manager) on the (Insert date) for the address (Insert full property address here). The Landlord and tenant may collectively be referred to as the parties. This lease creates joint and several liabilities in the case of multiple tenants the parties agree as follows.
Identification Of The Address
Next, you will need to record the title of your property. If you have a formal name for the property, such as “Castor Bay Villas” Or “Taumata Grand Estate” you will want to include as well. You must have the full mailing address of the property which includes:
- House Number
- Street Name
- Unit number the tenant is renting (specific to multi-family complex living)
- Postal code
An example of a clause that identifies the rental property could look like this:
“The Landlord now leases the property at (Insert street address here) in the city of (insert city here) of (enter region or country here) to the tenant(s).”
Rental Lease Date Period
This is the term both parties agree upon in which the rental lease is valid. When writing your contract, you should include the exact dates and steer clear of using generic phrases like “This lease will be active for one month” or “The lease will be authentic for six months.”
Use the standard format of recording date’s when writing your lease ( DD/MM/YY). You also need to include the exact time the contract ends. It’s common for leases to have a clause in them that automatically swaps your lease to a month-to-month format once the original term comes to an end.
Including a date stamp on your lease is simple and ensures that you have covered all areas when it comes to the details in your lease.
An example of what a lease cause that identifies the rental lease date period could look like this:
“The lease begins on (Insert start date) and ends on the (Insert end date)”
Rental Payment, Amount, Due Date
Your lease needs to include a clause about how much rent is due, how the tenant will make payment and the date in which it needs to be paid by. SnapInspect suggests that you add the full amount of rent owing for the entirety of the lease and then break it up by amount due per each month.
Check out SnapInspect’s example for writing a rental property rent amount clause in a lease below:
“(Insert tenants name) Tenant agrees to pay the amount of $10,000 as rent. $833 is to be paid monthly for the next 12 months, beginning on the 1st of January 2019. Rent payment is due on the 1st of each month. Payment for the first month’s rent and security deposit (Insert security deposit amount here) is due once the tenant(s) have signed this lease.”
Security Deposit Terms
Your rental lease needs to have a clause relating to the security deposit. This should detail the following.
- Amount of the security deposit collected
- The date of which the security deposit needs to be paid by
- Name, Address, and the bank/ organization which has collected the security deposit
- Interest Rate
- Factors that allow the property manager to deduct money from the deposit
This section of your lease highlights the tenant’s responsibilities while living at the property. Depending on your location, tenants and landlords have specific landlord-tenant laws that they need to adhere by.
Inhabitants of the property must maintain the property to be free of safety and sanitary hazards. Your tenant obligation clause should also state that tenants must not inflict damage to the rental property and also follow the specific tenant building and housing codes that are relevant to your location.
Relevant Party Signatures
A lease without signatures from all parties is useless. Signatures enable the lease to become a legally binding contract that, if broken has legal repercussions.
The property owner or property manager must sign and date the lease acknowledging that they agree with all clauses, terms, and conditions. Tenants, must do the same signing and dating the lease in acceptance to all terms.
Here is an example of what signatures acknowledging the lease in acceptance can look like:
“By signing this lease agreement, the Tenant (insert tenant name here) Acknowledges that they have read, comprehend, and agree to abide by all rules, terms, and conditions in this lease contract.
(insert name of property manager)…Manager Signature…Date (DD/MM/YY)
(insert name of Tenant)…Tenant Signature…Date (DD/MM/YY)
(insert name of Tenant)…Tenant Signature…Date (DD/MM/YY)”