Firstly what constitutes a house lease agreement?
Often private landlords lease properties to friends and or family members so they don't see the need for a written agreement under the mistaken belief that it shows a lack of trust.
This is a fatal and often costly mistake, it's a time bomb that can explode relationships when things go wrong. And things do go wrong. Remember if you a leasing out a house it is a business, you are not doing it as a favour for friends or relatives although they may see it that way.
If your tenant, regardless of who they are, suddenly is unable to pay the rent this month, is your bank or mortgage lender going to say "that's OK if your tenant hasn't paid the rent you don't have to pay the loan repayment"?
I can assure you if they are reading this they just fell off their chair laughing. It isn't going to happen, you have to pay the loan regardless.
Consider this, you have leased the house to a relative who loses their job and can no longer pay the rent, is someone in your family saying to you "you can't just throw them out, they're family, they have no where else to go!".
If you don't have a written house lease agreement you have a major problem, it is much harder and takes much longer to evict a tenant if there is only a verbal agreement in place.
How long can you keep paying the loan repayments with no rental income? If you can't pay the loan repayments how long do you think your lender will take to initiate foreclosure? After all you do have a written contract with them.
I'm not saying don't lease a house to family or friends, but it is often fraught with complications and emotional blackmail that can leave you as a private landlord, in deep doo doo.
If you lease property to anyone, have a written house lease agreement, no exceptions.
What if your financial circumstances change and you need to sell your investment property? If you don't have a written house lease agreement that has a clause in it that covers selling your property it can make it more difficult.
The basic reason to have a written house lease agreement is to cover yourself. It lays down the rules under which you are leasing your property and any special conditions you require.
Does A House Lease Agreement Have to Be Written By a Lawyer?
No, a house lease agreement can be written by anyone and providing that the content is clear, both you as the private landlord and your tenant have signed and dated it and you each have a copy then it is legal and you have a right to enforce compliance.
Where Can I Get A Sample House Lease Agreement?
There are many websites that offer free agreement templates, you can get a basic one for free from the Landlord Protection Agency (LPA). Many private landlords use the LPA "Rental Binder Agreement" as a base for their house lease agreement. You can also purchase the LPA Lease agreement which is far more comprehensive. If you join LPA then you get all their available forms for free.
What Needs To Be In A House Lease Agreement?
There are many things a house lease agreement can include but as a minimum it should include:
- details of the property being leased
- details of the owner - you the private landlord
- details of the tenant
- who else is permitted to occupy the property
- the period of the lease
- the rent
- when must it be paid
- conditions e.g. monthly in advance
- late payment fees (check the applicable laws as there may be limits
on this in your state)
- pets - allowed or not allowed or special conditions that relate to pets
- items included in the lease eg refrigerator, dishwasher etc
- responsibility for utilities
- notice required for termination of the lease and any conditions attached to early termination
- conditions or terms under which you the private landlord may sell the property, access for showing prospective purchasers, notice to tenant etc.
- special conditions for use of any appliances included in the rent ( you don't want your tenants cleaning engine parts in your dishwasher)
- define responsibility for minor repairs
- conditions for use of the property ( You probably wouldn't want your tenant turning your yard into a wreckers.)
Private Landlord Advice
If you are new to property leasing, get things right from the very beginning, draw up a written house lease agreement and make sure that that your tenant understands it.
Make sure your Landlord Agreement is signed and dated by yourself and the tenant and that your tenant receives a copy of the agreement.
You won't know how much importance to put on a written house lease agreement until you have cause to enforce it.
A house lease agreement is only part of the leasing process, finding the right tenants in the first place is an even bigger challenge. For more practical advice on "Finding And Keeping Great Tenants" click the button below
More private landlord information
Landlord Responsibilities
Landlord Tenancy Act
Check Tenant Credit
Private Landlord Rentals
Tenant Check
Find Tenants
Search Engine Submission - AddMe
