When renting out a property, landlords may view crafting a lease agreement as difficult but this seemingly challenging task becomes easier when you follow a guide. It’s important to have one to avoid encountering future problems. Simply making a verbal agreement isn’t sufficient since changes are inevitable and you need to have a contract to refer back to.

A proper written lease agreement helps reduce disputes in case a tenant forgets the rental terms and conditions. As a landlord, you can also benefit from the added protection that a written contract provides as you can refer to it during misunderstandings to clarify the policies and guide the renters accordingly.

When crafting a lease, you must make it specific and clear. There must be no room for misinterpretations. List the rights and duties of each party signing the lease agreement. Don’t forget to add in the vital disclosures and clauses. Ensure that signatures are affixed with the date written down on this critical document.

If you want to learn how to create a solid lease agreement that protects you, your property, and your tenants, keep on reading!

How To Create A Lease

There are three ways landlords can craft a lease and they are:

person signing a contract with a black fountain pen

  • The DIY (do-it-yourself) Route – This takes painstaking effort and requires a degree of diligence to research and learn the current state laws and local regulations.
  • Hiring an Attorney – There’s no question that this method provides legal protection and the reduction of risk but this can also be an expensive option.
  • Copying a Template – This is the easiest method of all but it also means producing a generic copy. You ultimately need to customize it to fit your rental property since not all conditions in the template may be applicable.

One of the best tips is to engage the services of a property management company. For one, you get access to a full suite of services on top of lease crafting. Second, some firms have their in-house attorney to ensure the legality of your rental documents. Lastly, industry knowledge and resources from the property manager benefit your rental property in the long run. 

Why Do You Need A Lease Agreement?

As a landlord, you must strive to create a well-designed lease so that whenever the renters want to know about certain procedures, they can easily refer to this rental document.

For example, if they want to find out the other available rent payment methods, they can refer to the lease. Or if they’re moving out, they may want to know their responsibilities of performing an end-of-tenancy cleaning and they can check the lease for information.

landlord showing to tenants a lease contract while sitting at a desk

What’s more, since changes are inevitable and the parties to the contract may not be on good terms, the written lease can help fix conflicts as long as the terms and conditions are clear and detailed. The lease agreement is also an acceptable document to present in court and is legally recognized should disputes escalate.

What Are The Basics Of A Lease?

While lease agreements can differ, the basic information can remain similar. You’ll often find these terms in the written contract:

  • The full name of the San Diego landlord and tenant(s) 
  • The rental property name and address, including the door number of the apartment unit 
  • The full rent due date 
  • The rental amount includes both figures and words for clarity. If the tenant needs to pay for other fees, put it in another section to reduce confusion.
  • The time frame of the rental period, for example, the tenancy begins on January 1, 2023, and ends on December 31, 2023.
  • The signatures of both parties ensure that both fully understand the terms and agree to them.

Vital Clauses And Policies To Include In A Lease

Since clauses comply with state laws, they appear similar in lease agreements. You’re likely to include the following clauses and policies in your lease contract:

one person holding a contract while someone else points at it

  • Subletting – If you allow tenants to sublet, it means they can split the rental fee and accept other occupants. To ensure that you’re aware of who the new residents are, you can request the renters to seek out your written approval first.
  • Property Access – List down the situations you can enter the rental property. This is part of honoring your tenant’s privacy. You can’t come and go anytime you wish. Send them a notice when you need to access the rental to perform renovations, repairs, or regular inspections.
  • Tenant Obligations – Renters also need to fulfill maintenance tasks and the lease agreement is where they can find the maintenance responsibilities they need to carry out
  • Security Deposit – Include the amount that is due and what it can be used for. You should include the refund procedure of the security deposit to prevent any misunderstandings. And note that some states are particular about informing the renters of where the deposit is stored and the interest rate received.

Required Disclosures

State and local laws require landlords to inform the renters about the following:

  • Bed Bugs – Mention if bed bugs exist in your rental and offer preventive solutions 
  • Radon – Since it impacts the health badly, the renters must know if it’s present in your property
  • Flood Zone – Inform the renter if your rental location is prone to flooding 
  • Lead-based Paint – Let tenants be aware if your property is at risk for potential lead-based paint, especially if it was built prior to 1978

Bottom Line 

A solid lease agreement protects your landlord-tenant relationship and reduces the risk of conflicts. It also reduces the risks of financial losses and property damage for landlords since all the important details appear on the lease contract.

If you wish to have a professional craft a lease agreement for you, contact Keyrenter Property Management San Diego today! You also benefit from professional property management services including property marketing, tenant screening, rent collection, and property maintenance among others.