8 Points to Discuss Before Signing the Residential Lease Agreement

Date:January 16, 2013 | Category:Rental Pros | Author:Jennifer Chan

Bright Meadow Source: Flickr

The bright, spacious rental unit with lots of closet space has impressed your renter, and now it’s time to sign the residential lease agreement. It’s easy for both parties to skim the paperwork and sign at the bottom – but it’s important not to jump the gun and rush through the process. Before the tenant commits to a year-long lease, make sure he or she understands what they’re signing up for. Besides telling them to actually read through each item in the lease, it’s important to reiterate and discuss the most important points.

The lease is binding.

It never hurts to emphasize this point. Reinforce that there’s a consequence if the lease is broken. If you absorb the security deposit or still expect the rent to be paid until the lease is up, it’s better to put it on the table now than to point to the fine print later.

Payment method.

Sure, it’s in the lease already, but stress when the rent is due each month and how you expect it to be paid. If all transactions, including maintenance requests, are to be submitted online, make sure your tenant knows how to access their account on the website. If you require a drop-off, let your tenant know where to find your office.

Automatic renewal of the lease.

If you renew the lease automatically upon expiration date, point out this clause in your lease agreement. Let the tenant know that it’s their responsibility to notify you in advance if they plan on vacating the unit after their lease is up.

Decorating policies.

Your tenant is probably looking forward to making the space feel like home, but before they pick out paint chips and get out the hammer, clarify what’s allowed, what isn’t, and how to get their project approved. If you just painted the unit after turnover, or classify nail holes as damage to the unit, let the tenant know that they’re responsible for returning the unit in its original condition. This information should always be included in your lease.

Utilities.

Who is responsible? If living in the unit will cost more than the actual rent in terms of utility and garbage bills, you need to tell the renter before they sign on the dotted line. Be very clear on what services you, as the landlord, are responsible for, and those that the tenants need to take care of themselves.

Scheduled maintenance.

Let your tenants know that your property is scheduled for regular upkeep. Whether it’s annual central air filter replacements, fire alarm checks, yardwork, or lawn fertilization, tell them when the work is usually done throughout the year and your notification process for entering the unit. Also let them know if any types of chemicals or pesticides are used in maintenance, especially if your tenant has pets, small children, or allergies.

Major repairs.

Do you have plans to replace appliances before the tenant moves in? Or maybe you’ve recently installed a new central air system. Let the tenant know about any major projects that have been completed, or any that are on your radar and will be done soon.

Pet policies.

Even if your unit allows pets, tell the tenant in advance if there are any restrictions on the type of animals or breeds you allow on your property. Spotlight any extra fees or added security deposit. If needed, request to meet your tenant’s pet before the move-in date.

Remember that if you haven’t put down your rules and regulations on the lease, it’s not legally binding. Put your rules down in writing so there won’t be any unneeded disputes with your tenants later on.