Components of a Rental Agreement

There are certain components that any rental agreement must include in order for it to be legal.  Of course, this varies from state to state so you will need to make sure that you know what is required in your particular area.  But overall, there are a few components that every rental agreement must have.

Before you sign any rental agreement, make sure that it has these factors outlined.  And if you are a landlord, make sure that the rental agreement you are using touches on all of these details as well.

1. A rental agreement should touch on the subject of abandonment.  In other words, what are the landlord’s options if the tenant leaves the property without notice?

2. Rules that outline the alterations that a tenant can make should also be touched upon.  This should be in the rental agreement to ensure that the tenant does not make any renovations that are restricted.

3. A rental agreement should touch on the subleasing.  This is very popular in today’s day and age, and you will want to make sure that the rental agreement addresses this issue; especially if you are a tenant and you may be taking part in this practice.

4. Make sure that the rental agreement states what will happen in the case of defaulting on a payment. 

5. Inspection and landlord access are very important when it comes to a rental agreement.  This will detail when and how landlords will be able to enter the property in order to inspect it, etc.  This is one of the details that varies greatly from state to state.  Make sure that you know the law in your state.

6.  Maintenance is often a big issue on the rental agreement.  You will need to know how this is taken care of, and who is responsible for what. 

7. To go along with default payments, late fees should also be outlined in the rental agreement.  This will let the tenant know up front how much they will be penalized for a late payment.

8. Payment methods should be outlined on the rental agreement so that the tenant knows how they can pay the landlord.

9. Utilities are a huge part of any rental agreement.  It needs to be clear on who will pay what bill, as well as which utilities are included in the monthly rent.

All of these are important to any rental agreement.  But even though these are a few of the more important aspects, they are not the only ones that you should be concerned with. 

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Author of this article is Danny Garcia, this and other articles related to real estate investing and real estate investing mortgage loans can be found at www.InvestorMortgage.org

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