What to Include in a Rental Agreement

Are you a landlord looking to make the most out of your property? Renting out your property can be a profitable endeavor.

Securing reliable, long-term tenants means a steady stream of passive income each month, and as property values appreciate, your investment grows, serving as a hedge against inflation.

Yet, the role of a landlord comes with its share of challenges. Beyond the need for constant availability, you can face potential issues like property damage, unpaid rent, holdover tenancies, and legal disputes.

The good news is that a well-crafted lease agreement can protect your investment and mitigate these risks. Drafting a rental agreement might seem daunting, but it's a manageable task with the right guidance.

To assist you, the experts at Redsail Property Management have created this comprehensive guide. Read on to learn the crucial elements every lease agreement should include!

Information of All Parties Involved

A rental agreement is a contract meaning it should include the full names and contact information of all parties involved.

In this case, this includes you, the landlord, and all adult tenants who’ll be living on the property.

By including all tenants in the rental agreement, you ensure that they’re legally responsible for following the lease terms.

Relevant Property Information

Your rental agreement should include key information about the property you’re renting. This includes the full address, the type of property, its square footage, and amenities, such as parking spaces, storage units, or pools.

Lease Terms

Whether you’re planning to rent your property on a week-to-week, month-to-month, or yearly basis, your rental agreement should specify the start and end dates of the tenancy.

You should also outline the procedures for lease renewal or extension, including notice requirements and potential rent increases.

Price of Rent

Another vital piece of information that all your rental agreements should include is the rent amount.

Make sure to clearly outline the price of rent, as well as the payment policies. This includes the due date for payments, acceptable payment methods, and late payment policies.

If you’re planning to charge late fees, make sure to state the amount, and the grace period for late payments.

Security Deposit Policies

Security deposits are a common source of disputes between landlords and tenants. To avoid misunderstandings, it’s best to include a detailed security deposit policy on your lease.

This should include the amount of the deposit, how you may utilize the deposit, potential reasons for deductions, and when tenants can expect their deposit back after moving out.

Depending on your location, you may be required to disclose where the deposit will be stored. So, make sure to check your local landlord-tenant laws.

Maintenance Responsibilities

Keeping a rental property in good condition is a shared responsibility between you and your tenants. To ensure your property is well maintained, it’s a good idea to specify your tenant’s maintenance responsibilities on the lease.

This can include everything from keeping the property clean to restrictions on renovations and alterations. Additionally, you should outline the steps tenants must follow to submit maintenance or repair requests.

Early Lease Termination Policies

Tenants in Virginia can legally break their lease early under specific circumstances, such as being on active military duty or being the victim of domestic abuse.

As a landlord, you can voluntarily add an early termination clause to your rental agreements.

This way, you and your tenants will have the flexibility to end the lease early if necessary.

Occupancy Limits

Overcrowding can be detrimental to your tenant’s safety and the integrity of your property.

By outlining the occupancy limits in the lease, you will not only prevent overcrowding but will also ensure safety and protect your property from excessive wear and tear.

Subletting Policies

Unauthorized tenants can cause many problems.

For instance, if they were to cause any damages to your property, there would be no way to make them repay the cost of repairs, as they’re not on the lease.

That’s why all your rental agreements should have clear subletting policies. You must specify whether you allow subletting. If not, you should outline the penalties for trying to sublet your property without authorization.

On the other hand, if subletting is allowed, you should outline any requirements or restrictions tenants should comply with. This way, you’ll maintain control over your investment, even if new tenants move in.

Pet Policies

Renting to tenants with pets can have many benefits. Unfortunately, it can also lead to property damages and disputes.

Luckily, you can mitigate these risks by setting up strict pet policies. If you’re willing to allow pets into your rental, make sure to specify:

• The types of pets allowed.
• Any size, weight, or breed restrictions.
• The number of pets allowed.
• Tenants' responsibilities regarding pets.
• Pet screening requirements.
• Pet fees or deposits.
• Penalties or fees for pet-caused damages or noise complaints.

Additional Clauses

• Include specific quiet hours and restrictions on loud activities such as parties on weekdays. Additionally, outline penalties for violating these noise regulations.
• Outline whether smoking inside the property is allowed and rules regarding cigarette waste disposal.
• Detail whether tenants are permitted to make alterations to the property and any conditions or rules for doing so.
• Specify whether tenants should obtain renter’s insurance to rent your property.
• Make sure tenants know when they can and cannot park.
• Outline any restrictions on guests, including duration of stay and notification requirements.
• Outline the limits on the type of business or activities a tenant may run from your home.

Signatures

As we’ve said before, a rental agreement is a legally binding contract.

For it to be valid, it should include the signatures of all parties involved. You should make sure tenants sign the lease before giving them the key to your home.

Bottom Line

Renting out a property can be intimidating, however, you can safeguard your investment and ensure a smooth rental process by taking proactive steps.

By clearly outlining crucial details such as lease terms, rent amount, security deposit policies, maintenance responsibilities, occupancy limits, and pet regulations, you set a solid foundation for a successful landlord-tenant relationship.

If you need assistance drafting a comprehensive lease agreement for your property, don’t hesitate to reach out to Redsail Property Management.

We're here to help you navigate the complexities and protect your investment!