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What To Include In A Rental Agreement

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A lease agreement is a set of rules that both parties,  the landlord and tenant, agree to abide by during the entire term. Typically, a lease runs anywhere between six months and a year. It is a legal contract!

A lease can be established either verbally or through a written agreement. 

As a landlord, it’s in your best interest to ensure that the lease is detailed enough to minimize confusion or misunderstanding. Regardless of how long or short it is, you must make sure that it covers certain basic terms. 

The following are the 7 terms that every lease agreement should contain for a stress free property management experience.

1. The Names of All Adult Tenants Living on the Property. 

Include the name of every adult tenant living on the property. And this should include the names of both married and unmarried couples. By doing so, you’ll be effectively making each adult tenant responsible for abiding by the terms of the lease agreement. 

This means that you’ll be able to enforce the rules on each one of them. For example, if one of the adult tenants violates the lease, such as causing excessive property damage, it would be within your rights to evict them. 

adult tenants

Also, you’d be able to demand rent from any of them. 

2. The Limits of Occupancy. 

Clearly specify in the lease agreement who the tenant is. Specifically, let the tenant know that only tenants who have been listed in the lease (plus their children) can occupy the property. 

This will ensure that the home is only occupied by qualified individuals. That is, tenants who you have qualified to occupy the property. 

This, therefore, will give you grounds to evict anyone who sublets the unit without your approval. It also safeguards your property against additional wear and tear that additional occupants may cause. 

3. The Length of the Tenancy. 

Be clear on the length that the tenancy will be running. Specifically, mention whether the lease is short term or is long-term. Month to month agreements automatically renew every month until either party terminates it by serving a notice. 

A fixed-term lease, on the other hand, runs anywhere between 6 months and a year. Your choice of either of the two options should be dependent on your investment goals. If you’re looking for some flexibility in the tenant you want to rent to, then you should go for a short-term lease. However, if you’re looking for some stability, then a fixed-term lease is ideal. 

4. The Rent Retails. 

An effective lease agreement is one that includes details about rent. Don’t just state the rent amount and stop at that. Provide tenants with more details for additional clarity. The following are the details that you should clarify in the agreement. 

rent details

  • How tenants should pay the rent. For example, will you require them to pay by mail or through an online portal?
  • The amount of late fees (if any). 
  • The length of the grace period. If you offer a grace period, make sure to have it in writing. 
  • Charges on bounced checks. 

5. The Details of the Security Deposit.

As a landlord, you have a right to charge tenants a security deposit. However, you’ll want to provide tenants more details, rather than just stating the security deposit amount. 

  • The security deposit amount. Texas does not have a limit to what a landlord can charge for a security deposit, but it is typically one to two months rent. 
  • What you can use the deposit for. Allowable reasons include unpaid rent, cleaning costs, and damages exceeding normal wear and tear. 
  • When you will return the deposit back. The time limit for returns in Texas is 30 days time. 
  • Whether you charge an additional pet deposit. And if you do, the deposit amount. 

pet deposit

You may also want to let your tenant know about how you will be storing their deposit. 

6. The Tenant’s Responsibility For Repairs and Maintenance. 

Both landlords and tenants have certain responsibilities when it comes to repairs and maintenance. Tenants in Texas have the following responsibilities in regards to repairs and maintenance. 

  • Keeping their rental premises clean and sanitary. 
  • Pay for damage that resulted from their negligence, carelessness, misuse or abuse. 
  • Notify you of any damages as soon as they occur. 

On the other hand, landlords have the following responsibilities as per Texas laws. 

  • Respond to repair requests within a “reasonable” amount of time. 
  • Provide tenants with a habitable dwelling that meets the basic Texas health and safety codes. 

Letting tenants know about their repair and maintenance responsibilities will be your best bet against rent-withholding hassles and other problems. Because, tenants in Texas have the right to withhold rent, repair the problem and deduct the cost from future payments, as well as report you to public officials. 

7. The Rules on Landlord Entry. 

To prevent tenants’ claims on illegal entry, make sure your lease addresses your legal right to enter their rented premises. The following are the details you may want to include in the clause. 

landlord entry

  • The notice period prior to entry. Texas requires that you provide a “reasonable” advance notice, which is typically assumed to be at least 24 hours. 
  • The entry hours. Texas requires landlords to only enter their tenant’s rented unit within “normal business hours.”
  • The reasons for entry, such as to make repairs or inspect the unit.

Bottom Line

For expert help in drafting a solid and legally binding agreement, McCaw Property Management can help. We are a leading property management company in the Dallas and Fort Worth area. Get in touch with us today!