Learn from the experts, what clauses to include in your lease, to protect owners & their assets
Bell Properties supports our realtor friends who are working with California clients to lease out their properties. To help our area agents, we produce and host a weekly 25 minute webinar where we discuss these topics in depth.
Keep reading for five tips to help you write a strong lease, and protect your owner clients, from the regional leader in Property Management, Bell Properties California.
Avoid poor resident/occupant relations, by writing a strong lease that covers future potential pitfalls.
5 Tips for writing a strong lease
2) Have Multiple (backup) Copies of Your Lease. The beauty of modern technology and digital bookkeeping is a bonus for keeping your business organized and secure. However, digital lease agreements have the potential to be altered, whether by accident or on purpose, by either the tenant or the software. It is critical you have a paper copy of the lease agreement kept on file at all times to refer to in the case of a dispute. This way your tenant cannot make the claim that a clause in the lease agreement says something entirely different from what you originally drafted.
It is important to have your Bell Properties, Property Manager discuss this paper copy lease agreement with your tenant at the time of move-in, as well as have them sign the document so you have hard proof that everyone involved knew exactly what was expected of them at all times throughout the lease term.
3) Renewal Terms
If you give your tenant the ability to renew, it should be stated specifically in the lease. This area might also include statements about the new rental rate for this period. Some property managers place escalation clauses for rent. It is best if you require the tenant to give you written notice of their intent to renew and that they sign a new lease extension document. If you allow them to continue on a month-to-month basis, be clear in this area about the new rules for vacating the property when in this monthly status.
4) Security Deposits and Rent Payments : State laws differ about how much an owner can require in deposits by type; (for California, unfurnished properties the max security deposit is 2x rent). Your lease document should be clear as to the amounts, how the money will be held, and if interest is required to be paid, if earned.
Important for deposits is a clear understanding as to how the money will be released at the end of the lease. How will damages be determined and valued? What time period is legal for holding the deposits at the lease end? Make sure that the tenant knows the day that rents are due, how (where) to pay them, any fees for specific types of payments, and what happens and when if they are late in paying.
5) Hire an attorney or property manager: If you are not using BELL Properties, to help you draft an exceptional lease agreement, the next best thing to do is enlist the help of a local, experienced real estate attorney. If you need a referral to a great area real estate attorney, please get in touch with a rep from Bell Properties. Having a lawyer on hand to help you draft your lease agreement is a good idea.
Because in addition to federal rental property laws you must follow, every state and city has their own specific landlord-tenants laws that you also must abide by in your written lease agreements.
The last thing you want to do is include something in your self-drafted lease agreement that violates a law.
Worse yet, you don’t want to have such a loosely stated lease agreement that clauses you have included can be used against you by knowledgeable tenants looking to take advantage of those not well-versed in the law.
Having an attorney look over a finalized lease agreement is not going to break the bank, and can end up save you lots of time, money, and hassle in the long run.
It is always a good idea to educate yourself about the rules and regulations that apply to you and your rental properties, so that you can always protect your own interests, whether you have a property management company or real estate attorney helping you out.