As a landlord, your lease or rental agreement is probably the most critical document you work with, so it needs to be spot-on.
It’s not easy being a landlord in today’s rental market. Landlords must deal with a plethora of issues ranging from rent collection to property inspections and maintenance.
As a landlord, you’ve worked tirelessly to acquire your rental portfolio and want to offer good homes to deserving tenants.
When you believe you’ve landed the perfect tenant, you must then issue them with an all-inclusive lease agreement that details all of your expectations, rental rules, and policies from the get-go.
A lease agreement is a legally binding document. When properly drafted, it can safeguard you from a whole slew of nasty surprises that renters can throw at you. From property damage to rent-related issues – and plenty more random issues.
This article covers some of the most crucial items to cover when drafting your Torrance, Ca rental agreement. Let’s get started, shall we?
1. Lease Term
Simply put, a lease term is the period of time during which the terms of the lease are enforceable. It’s usually expressed in terms of months or years.
The type of lease agreement is dependent on the type of property. If you are leasing a vacation rental, you’ll typically need to draft a rental lease contract that runs for short periods of time. Usually, days, weeks, or a month. In the case of months, it would be wise to give a monthly rental agreement.
If leasing a single-family home, you’ll need to draft a “fixed” lease.
Whether you need to draft a short- or long-term lease, the lease term needs to be defined. It’ll help protect you from “holdover” tenants. These are renters that overstay their welcome.
2. Early Lease Termination
An early termination clause is a statement within some lease agreements that give renters an option to break the property’s lease agreement if they need to.
When establishing this term, consider the following things:
- Will you permit subleasing/subletting of the property? If so, do the new renter require screening as well?
- What are the fees to market the property again?
- What will the resident be responsible for?
3. Tenants’ Names
Your rental property lease agreement must also state that all adults living in the rental unit must sign the lease or rental agreement. This includes couples that are married or unmarried. The more individuals there are listed on a lease, the more likely you’ll be paid.
This is because you can legally seek rent from any of the listed individuals. This requirement also makes it possible to terminate the rental contract in the event any of them violates the lease terms.
4. Occupancy Limits
Make sure to indicate that the rental property is the residence of the tenants mentioned in the lease. This helps limit the number of occupants as well as guarantees your right as a landlord to regulate who dwells in your property.
This means that you can evict anyone who sublets the property without your consent.
5. Landlord Entry
Renters have a right to quiet enjoyment of their property. This basically means that the landlord must not interfere (or allow anyone else to interfere) with the tenant’s enjoyment of the property.
To avoid claims of violation of privacy rights or claims of illegal entry, your rental lease should clarify your legal rights to access the property. For example:
- Pursuant to a court order
- When the renter has abandoned or surrendered the premises
- To inspect the unit before a departing tenant vacates it
- In case of an emergency
- To show or exhibit the unit to potential renters, contractors, or buyers
- To make necessary improvements, alterations, or repairs
6. Repairs and Maintenance
Clearly setting out each party’s responsibility for repair and maintenance in your Torrance, Ca property is your best defense against rent-withholding hassles and other problems.
Among other things, you should include:
- Restrictions on renter repairs and alterations. For example, painting walls, installing a burglar alarm system or adding a built-in dishwasher without your permission.
- A requirement that the renters alert you to dangerous or defective conditions in the rental property.
- The tenant’s responsibility to keep the rental premises clean and sanitary and to pay for damage resulting from their carelessness.
7. Deposits and Fees
Security deposits are oftentimes a source of conflict between tenants and landlords. To avoid any misunderstanding and potential legal issues, your lease or rental agreement should be clear on:
- The security deposit amount. In setting up the amount, make sure it’s within the state’s limit.
- The use and return of the security deposit.
- Conditions necessary for its return at the end of the lease term.
- Any legal nonrefundable fees, such as for pets or for cleaning.
8. Rent Rate
Your Torrance, Ca rental agreement should also be clear on the rent-related issues. For instance, the rent amount, when it’s due, how it’s to be paid, and late fees, if any.
9. Protected Classes
In drafting your standard lease agreement, make sure you adhere to local, state and federal rules on fair housing.
Fair Housing Rules state that landlords should give tenants an equal opportunity regardless of their familial status, disability, sex, national origin, religion, color, and race.
In addition, California has its own set of protected classes. They include:
- Genetic information: Landlords in California cannot base rental qualification on genetic tests and genetic tests of an individual’s family members.
- Age: People over the age of 40 are also protected.
- Source of income: Landlords cannot factor in how tenants make money in their decision to lease their property.
- Ancestry: Landlords cannot also consider a renter’s family’s ancestral roots in the housing process.
- Medical condition: In California, no medical condition can disqualify tenants from access to housing.
- Marital status: Whether single, married or widowed, tenants are protected under FEHA.
- Gender identity and gender expression: Enacted in 2012, California’s Gender Nondiscriminatory Act protects transgender and gender non-conforming people from employment and housing discrimination.
- Sexual orientation: The LGBT community is protected from housing discrimination in California.
A well-written lease agreement will resolve most foreseeable disputes between you and your tenant. If you have questions or need help drafting one, please contact a competent Torrance property management company.