Writing leases is a significant time commitment. Whether you’re a new landlord or consider yourself a pro, lease writing is a serious and consequential endeavor.
Not only do you need to be familiar with housing laws in your area and knowledgeable about the current housing market, but you also need to write clearly to avoid any misunderstandings. Otherwise, tenants may try to exploit loopholes in your terms or even file a claim against discriminatory language.
Landlords do have several resources when writing leases. There are many lease templates available online for various types of rental businesses. You can also find templates and other tools on a property management software platform. With software, you can even automate parts of the lease writing process.
Here are five lease writing tips for landlords and how to implement them.
Be Clear and Concise
The importance of clarity cannot be understated in lease writing. Poorly written leases can easily be exploited, misunderstood, or misinterpreted. They might also introduce legal liabilities that could land you in court. For these reasons, make lease terms as clear and concise as possible.
Remember, your tenants will have varying reading levels and experience with legal documents. Use accessible terminology that all tenants will be able to understand. If there are any particularly confusing clauses or concepts, be sure you explain them fully.
It’s also good to avoid legalese and keep specialized jargon to a minimum. This way, tenants can’t use the tangled language of your lease to justify any rule-breaking.
Know the Laws
Perhaps the most essential guidelines for lease writing are housing laws. Federal, state, and local housing laws indicate what clauses you can include, which topics you can and can’t mention, and other stipulations and obligations for landlords.
The Federal Fair Housing Act (FHA) is the broadest fair housing law. Under this law, it’s illegal to use discriminatory language in rental advertisements, applications, and leases.
While writing leases, avoid mentioning any classes protected under the FHA: race, color, national origin, sex/gender, religion, disability, and familial status. Some states also offer further protection based on marital or veteran status, so be sure to check with a local lawyer or consult the legislation for your state.
Specify Any Restrictions
Leases are also your opportunity to clearly define and lay out any restrictions you impose on your tenants. These could include restrictions on smoking, pet ownership, overnight guests, or others.
You should also include how you’ll enforce these restrictions. Plainly state the penalties for breaking lease terms, including any formal warnings/grace periods you offer. Also, make the legal grounds for eviction clear to tenants.
When a tenant breaks one of your terms, you’ll already have the legal authority you need to enforce late fees or other penalties.
Include Right of Entry Information
It’s also smart to include the right of entry information on your leases.
The benefits of this clause are twofold. Firstly, your tenants will understand that you have the legal right to enter your property so long as you give the appropriate notification—for example, 24 hours. Secondly, this also lets tenants know that you are familiar with the laws surrounding landlords’ right of entry and will respect their privacy by complying with them.
Use Property Management Software
Finally, a property management software tool is a smart way to leverage your resources in the lease writing process.
The software comes in handy at several different points in the process. First, it saves and stores your lease documents, so you can come back to them to make edits or add addenda whenever you need. Sharing your leases from your software is straightforward: indicate the tenants who will be signing, and your software will send signable copies to their email addresses.
Additionally, property management software allows you to automate the leasing process. By indicating lease fields (date, signature, etc.), the software learns to autofill fields, so you don’t have to enter the same information repeatedly.
Writing Leases to Safeguard Your Rental Business
Ultimately, the lease is your greatest protection against tenant disasters. Therefore, it’s in your best interest to choose careful language and take advantage of the resources available to you. If you use precise wording, comply with housing laws, specify restrictions, and use software when applicable, your leases will offer strong protection against any kind of mishap.
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