Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I've got quick video on tenant lease agreements.
Tenant Lease Agreement
(Review Sample Lease Agreement Page-by-Page)
– Lease Agreements Vary by state – Texas sample
– Lease Agreement are Pretty straightforward
– Focus Areas
– Parties and Property Info – Name, Address, Etc..
– Term of Contract** – be sure the tenant is aware of when the contract ends
– Rent – Monthly amount, pro-rated, payment location (p.o. Box)
– Payment Method – cashiers check, money order or Auto Draft – NO personal checks (avoids returned checks
– Late Fees** – Exact date and time payment is due, review penalties and amounts
– Pet Clause – Usually pets are not allowed unless approved by landlord, addendum needed
– Non-Refundable Pet Security Deposit – $300-500 – mention carpet cleaning or replacement costs
– Property Security deposit – Briefly discuss what it is for, 1st months rent, PLUS 1st months rent
***Reviewing Contracts Tip – You don't need to go through every single bullet. You are simply highlighting the major points, with the verbal follow-up “be sure to review these sections, on your own time..”
– Utilities – For residential tenant usually pays utilities, must be on – regardless if they can afford it.
– Occupancy** – Emphasize who is ALLOWED and NOT allowed on the premises, prohibitions – running a business out of the house, car repair (oil), etc…
– Access By Landlord – brief explanation
– Move-In Conditions – hand tenant walk-through – “Inventory and Condition Form” – identifies any damages to the property prior to move-in
– Move-Out Conditions – Normal Wear and Tear
– Property Maintenance – Highlight most important (show contract example)
– Yard Maintenance** – city fine scare tactic
– Prohibitions – alterations to the home are prohibited without approval
– Repairs – All and any must be approved by landlord
– Repair costs – tenant covers first $50-100 – Service fees are usually $80 just to come out.
– Repairs Landlord will cover**
– Repairs Tenant will cover**
– Special Provisions – Include your verbal agreements for special circumstances
– Early Termination – Military Immunity, Subletting not permitted without approval
– Addendums – Create an Addendum Index for special rules and regulations, attach to the contract
– Information
– E. Emergency Contact
– F. Tenant Insurance – For possessions – landlord not responsible
– Signatures
– Contract Copies
* I usually sign and initial the contracts alongside the tenant
* BUT, I have all the essentials already filled out to speed things along.
* Remember, have the tenant initial each page as you go over it.
* Review the contract before meeting your tenant, so you are familiar with all the clauses and are prepared to answer questions.
Filling out lease agreements may seem daunting at first, because of all the pages and legal terminology, but if you really read through it, its not that hard at all. Its important that you review it multiple times, and become familiar with all the lease agreement clauses, so you sound like a professional when speaking with your tenants. This is important, because there are people out there who are “professional tenants”, they know the law better than most landlords, and can play you for a fool. So be smart, be diligent, and you should be well protected.
Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you'll be automatically notified when we upload more quick video tips for you. Take care and good investing.
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