6 Keys to Writing A Lease the Right Way - Submitted by John Triplett of Rental Housing Journal 02/28/2017 - 10:20am
A recent webinar offered advice on creating, using and enforcing tenant leases for property managers. Do you know the 7 basics of a lease? Or The 6 qualities of a great lease? How sloppy payers can be a revenue source? Here are some trends in leases these days along with tips, advice and links to more information to help you get the right language, which you want, in your leases.
The webinar was by Buildium.com and run by Darcy Jacobsen, Director of Content, and Sam Driver, Product Director, and an experienced property manager at the company. During the webinar, they polled the group of property managers on a number of questions, and the first one was:
How many different leases do you use in your business?
“The most common is one lease, especially when the units are often similar. And, especially with smaller operators, one lease works.” Driver said. “However we are finding it is not uncommon to shift to a two- or three-lease template model, especially if there are significant differences in the properties. If you are an owner-operator, you tend to have one. If you are managing for different owners, who have different kinds of units, then you tend to see more” types of different leases, he said.
The poll showed that:
- 62% use a one-lease template
- 30% use multiple lease templates
- 5% use a custom lease by the owner
- 2% custom lease by the tenant
Do you know the difference between a lease and rental agreement?
- A rental agreement is for short term tenants (often 30 days). It is usually automatically renewed at the end of the period unless either the renter or landlord ends it with written notice. These are month-to-month rentals, and the landlord can change the terms with notice.
- A lease is a contract that grants a renter the right to occupy a rental unit for a specific period of time (often 6 months, or a year) as long as the tenant complies with the terms. The landlord cannot raise the rent or change those terms unless the tenant agrees.
Will you deal with short-term rentals?
“One of the things that has been hot in the industry lately is really how to handle a very short-term tenant,” Driver said. “This is the sort of Airbnb problem that has been out there for a long time or the vacation rental. That is something worth thinking about when you are drafting an exemption, exclusion or a whole new lease that describes the behavior for any short-term leasee.” He also said, “These laws are changing quickly and it is well worth your time keeping abreast of the changes.”
What about the issue of multiple tenants who may or may not be related?
“Another one is this number of tenants’ problem that is worth addressing directly. When you see the opportunity, especially in a student housing situation, to be able to charge for multiple tenants there are some things to consider,” Driver said.
“What we have found the courts will support is the number of bedrooms x two persons, plus one extra person as adults that meet that test. And so it is not unreasonable for your lease to actually contain language that describes that so you know that is very defensible.”
Read More at: 6 Keys to Writing A Lease the Right Way.pdf