Guide to Making a Solid Lease Agreement for Your Rental Property

Renting out a property can be a scary venture. After all, you’re opening the doors of your home to complete strangers. A good screening process can help ensure only responsible and reliable tenants occupy your property. However, this is not enough to keep your investment protected. 

A solid lease agreement is the best way to protect your rental properties. These legally binding contracts establish rules on rent payments, property maintenance, and lease duration, reducing disputes and misunderstandings. 

They also set guidelines for security deposits, pet policies, and property use, ensuring tenants follow agreed-upon conditions. 

By clearly outlining the rights and responsibilities of both landlords and tenants, a well-written lease agreement minimizes risks, prevents disputes, and protects your property's value by enforcing standards for proper use and care. 

In this article, the property management experts at Fireside Property Management will go over everything you should know to draft a strong lease agreement for all your rental properties. Keep reading to learn how to keep your investment protected!

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A Step-By-Step Guide to Writing a Solid Lease Agreement

A well-written lease agreement can go a long way. It’ll improve the relationship with your tenants, fostering a sense of transparency and preventing disputes. It can also help you protect your investment, by including penalties and punishments for property damage and late payments. 

Writing a comprehensive lease agreement is not simple. But, it’s not impossible. Here are some things to keep in mind when writing a new lease for your rental property:

1. Familiarize Yourself with the Local Rental Laws

Before you can start writing your lease, you must familiarize yourself with local rental laws. This will help you ensure your lease agreement is compliant, prevent legal disputes, and protect your investment. 

A well-structured lease that follows state and federal regulations safeguards both your and your tenants’ rights, sets clear expectations and helps avoid costly penalties or landlord-tenant conflicts.

As a landlord, you must understand fair housing laws to prevent discrimination, security deposit regulations to ensure proper handling of tenants’ deposits, and eviction procedures to follow the necessary legal processes. 

Rent control laws, habitability requirements, and rules on lease termination also play key roles in drafting an enforceable lease agreement that complies with local and state regulations.

2. Gather All the Information You’ll Need

Before drafting a lease agreement, you should gather essential information to ensure you write a comprehensive and legally sound document. This includes the following key information:

• Property Details: The rental unit’s address, condition, and included amenities
• Tenant Information: Names of all tenants and occupants over 18
• House Rules: Policies on smoking, pets, guests, and subleasing

3. Write the Key Lease Terms

A good lease should include clear, detailed lease terms and regulations, even those that may seem like common sense, to prevent misunderstandings and disputes. 

Providing detailed information ensures tenants understand their responsibilities, from rent payments to maintenance. Without explicit rules, issues like noise, guest limits, or property damage may arise. 

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Here is the key information all your leases should include:

Lease Term

• Specify whether the lease is a fixed-term (for example, one year) or month-to-month
• Include the exact start and end dates for fixed-term leases
• Outline the notice period required for termination or renewal

Rent Price and Payment Terms

• Clearly state the monthly rent amount
• Specify the due date (for example, the first of every month)
• List out all acceptable payment methods
• Outline the late fees or penalties for missed or late payments
• Clarify whether rent can increase during the lease and under what conditions

Security Deposit Rules

• State the security deposit amount and how it will be held
• Detail conditions under which deductions may be made (e.g., damages)
• Specify when and how the deposit will be returned after move-out
• Include any non-refundable fees (e.g., pet fees, cleaning charges)

Occupancy Limits

• Define the maximum number of occupants allowed
• Specify that only named tenants and their minor children may occupy the property
• Require written permission for additional occupants
• Set limits on how long guests can stay before they are considered additional tenants requiring approval

Tenant Responsibilities

• List tenant maintenance duties (e.g., lawn care, minor repairs)
• Specify restrictions on modifications (e.g., painting, installing fixtures)
• Include rules for noise, pets, smoking, and parking

Mandatory Legal Disclosures

Depending on where your rental is located, you’ll have to disclose key information to tenants before they move in. For instance, the mandatory disclosures in the state of California include the following:

• Lead-based paint and asbestos. You must inform tenants of any concentrations of lead-based paint or asbestos in the property.
• Bed bugs. You must inform tenants whether there have been cases of bed bugs on the property.
• Mold. You must provide documentation about any known mold growth in the unit.
• Common utility use and payment. You must disclose how utility fees are applied and how they are divided up.
• Death. Tenants must be informed of any non-HIV or AIDS-related death in the property within the past three years.
• Flood zone. You must disclose whether the property is in a known flood zone.

4. Include Addendums

An addendum is a separate document added to the lease agreement to include additional terms, conditions, or policies not covered in the main contract. 

It helps create a more comprehensive lease by addressing specific issues like pet policies, parking rules, or maintenance responsibilities without altering the original lease. 

Addendums also provide flexibility, allowing landlords to customize agreements for different rental situations while ensuring clarity and legal enforceability. 

Here are some common addendums added to reinforce lease agreements:

• Pet Policies. You can specify whether pets are allowed and, if they are, what types and sizes are permitted, what pet deposit or fees are required, and tenant responsibilities for pet-related damages.
• Smoking Policies. States whether smoking is prohibited, allowed in designated areas or completely banned within the rental unit.
• Parking Rules. Defining assigned parking spaces, guest parking rules, towing policies, and additional parking fees will prevent disputes and misunderstandings.
• Maintenance and Repairs Addendum. This can help you clarify tenant and landlord responsibilities for maintenance, outlining what repairs tenants must handle and how to request service.
• Subleasing Addendum. You can outline whether subleasing is allowed and under what conditions, including approval requirements and liability agreements.
• Renters Insurance Requirements. If you require tenants to obtain renters insurance, then it should be included in the lease.
• Noise and Conduct Rule. This will help you establish rules regarding excessive noise, disturbances, and tenant behavior to maintain a peaceful living environment.
• Alterations Rules. It’s important to define what modifications tenants can make, such as painting or installing fixtures, and whether they must restore the unit upon moving out.

5. Review and Sign

Once you’ve written your lease agreement, it’s time to proofread it. Reviewing your lease is essential for ensuring clarity, legal compliance, and enforceability. Errors or vague terms can lead to disputes, financial losses, or legal issues. 

A thorough review helps verify that all required disclosures, tenant responsibilities, and lease terms are correctly outlined. It also ensures consistency with local rental laws, protecting both landlords and tenants while preventing misunderstandings down the line.

Once your lease has been reviewed and edited, you can send it over for tenants to review it themselves before signing it. 

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Bottom Line

A well-drafted lease agreement is the last (and arguably most important) line of defense for your rental property. A lease with clear terms, rules, and tenant obligations helps avoid misunderstandings, minimize maintenance issues, and avoid legal disputes. 

Moreover, a solid lease agreement will provide you with legal grounds for action if tenants violate the agreed terms, such as nonpayment of rent or unauthorized alterations.

Writing a solid lease agreement is not impossible, but it’s not easy either. If you’re having trouble ensuring your lease is legally sound and compliant, contact Fireside Property Management! We can help you keep your investment protected!