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The lease agreement is a legal contract between you, as the landlord, and a tenant. Once the lease is signed (physically or electronically) by both the landlord and the tenant, it is binding and each party must adhere to its terms.
You have a property up for rent. Fantastic. Some extra income in today’s economy is a huge plus.
However, there are a number of scenarios you need to consider once you find a tenant:
- What if your tenant pays late?
- The geyser bursts, who is responsible?
- How do you deal with more occupants than agreed upon?
- Your tenant is subletting, what do you do?
These are the types of issues that may arise where the landlord says one thing and the tenant says another. So how do you protect yourself?
Lease to the rescue.
The lease agreement is a legal contract between you, as the landlord, and a tenant. Now you may ask, where do I begin with drafting a document such as this? Don’t worry, you are not alone. For many people, this is unchartered territory.
There is a wide range of lease agreements from independent landlords, agencies and management companies. In order to help you determine what is best for you, this post will cover the purpose of a lease, why it is important and the top items to include in your lease. Additionally, since we have experience in these matters and have had the opportunity to consult legal experts, the HouseME generic lease agreement is available above for your benefit.
The purpose and importance of the lease
The lease agreement is a legal contract between you, as the landlord, and a tenant. Once the lease is signed (physically or electronically) by both the landlord and the tenant, it is binding and each party must adhere to its terms. The lease outlines these terms, guarantees the tenant the use of the property and guarantees the landlord regular payments from the tenant for a specified period of time.
Landlords should take care when selecting their lease. It is, in most cases, worthwhile to consult a legal expert, particularly someone who has experience in handling landlord and tenant concerns. In the same vein, a tenant should read a lease carefully before agreeing to it.
The lease agreement is one of the most important documents for a landlord. It outlines the rules by which a tenant can use and occupy the space you own and the repercussions should these rules be broken. In the event of a dispute between a landlord and a tenant, the lease represents what was agreed upon by both parties and serves as clarity on various matters. It provides security to both the landlord and tenant and prevents misunderstandings that could potentially lead to litigation.
What should I include in the lease agreement?
It is in both parties’ interest to have a comprehensive lease that can answer tenant-landlord questions. The following is a list of items that are essential to include in a lease agreement:
- The names of the tenant and the landlord or the landlord’s agent or company who manages the property.
- The premises, which includes the address of the property.
- The total number of occupants allowed.
- The duration of the lease, including commencement, termination date and notice period.
- Monthly rental amount, including the date it is due as well as late payment charges. This includes how rent will be paid, i.e. EFT, debit order or cash.
- Acceptance of offer and payment of deposit. This includes the amount, purpose and where it will be held.
- Who will be responsible for damages, repairs and maintenance. This can include an insurance policy.
- Prohibition of subletting the property.
- Utilities available and how these will be charged.
- Rules in terms of pets, noise and smoking.
- The event of a breach of contract and a lease cancellation policy.
A lease agreement that is comprehensive and legally correct is vital for a smooth relationship between a landlord and tenant. It is important to remember that it is a binding contract and should be carefully considered before signing.
If drafting your own lease agreement sounds like a headache and the HouseME generic lease template does not sound attractive as well, why not let HouseME handle these matters for you? With a once-off payment of just 2.5% of your rental income calculated over the period of the lease, only charged after we have found you a tenant, HouseME takes care of rent collection, tenant vetting, advertising and more; in other words, we handle the risk and hassle for you. We use our own state-of -art digital lease, which is fully legally compliant and allows rules and changes to the lease to be attached if required.
In addition, if you have already found a tenant, you can transfer at any time, mid-lease, to HouseME’s platform and make use of our digital lease, collections and payment system.