Key Takeaways
- A well-drafted lease agreement clarifies the rights and responsibilities of both landlords and tenants.
- Essential lease terms include rent details, lease duration, repair responsibilities, subletting rules, and access policies to ensure a smooth rental experience.
- Compliance with state laws is crucial for protecting both parties’ interests.
Before renting out your property, ensure both you and the tenant have signed a contractual agreement. A proper lease agreement will act as a guideline on what each party can and cannot do during the tenancy period. This will help eliminate any grey areas that can lead to potential conflicts or misunderstandings.
With that in mind, there are certain basics that every lease agreement must contain. In this guide by Denman Realty & Property Management, we’ll cover everything you need to know about drafting lease agreements!
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Names of all the Parties Involved
As already mentioned, a lease is a contractual agreement between two or more parties. As such, it must include the legal names of both the landlord and their tenants. Additionally, it must also state specifics about the rental property like the address and door number if it’s in an apartment.
Rent-Related Details
Besides mentioning the specific rent amount the tenant must pay every month, you must also let them know of other details including:
When Rent is Due
Specify the date that the tenant must have paid rent before it becomes late. This will eliminate any confusion as to the rent due date, and therefore minimize issues of missed or late rent payments.
The Grace Period
In Arizona, there are no mandatory grace periods, however, landlords can still decide to provide one. If you choose to offer one to tenants, let them know how long it’ll be. Make sure to check your state laws for clarity on enforcing these policies.
Amount of Late Fees
After rent becomes late, will you be charging tenants a late fee? If so, specify the amount. In Arizona, there is no limit, that said, it must be reasonable and applied equally across all your tenants.
Rent Payment Methods
Let the tenant know what payment methods they must use. Common methods include cash, checks, money orders, and online portals.
Rental Duration
Specify exactly when the tenancy begins and when it ends. Doing so can help prevent the issue of a holdover tenant. Such a tenant refuses to leave after their lease has expired. Dealing with holdover tenants can be very time-consuming and stressful.
Establishing lease terms also allows both you and your tenants to prepare for the move-out process. If the lease isn’t being renewed, renters have a chance to find a new rental, you have an opportunity to get ahead on marketing and tenant screening.
Subletting Rules
If you’ll be allowing tenants to sublet the property, clarify any rules and conditions that will be in place. For example, require the tenant to obtain your written consent before subletting the property to anyone. This will ensure that you can qualify the prospect before they can live on the property.
Property Access
Tenants have a right to peace and quiet enjoyment of their rented premises after they sign a lease. With this in mind, you must always notify the tenant before entry. In Arizona, a landlord must provide tenants with a notice at least 2 days before entry. The only exception is if it’s an emergency that poses harm to the tenant’s safety or health.
In addition to providing the tenant with advance notice, you may also want to specify the entry reasons such as inspections, repairs and maintenance, and emergencies, and to show the unit to prospective renters or buyers.
Responsibility for Repairs & Maintenance
Let the tenant know what each party will be responsible for in regard to repairs and maintenance. As a landlord, state law requires that you provide tenants with a habitable rental premise. You must also ensure that this condition is maintained throughout the tenancy by responding to issues promptly after notification.
Tenants, too, have certain obligations including, emptying trash in proper receptacles, paying for the repairs of any damage they cause, and keeping the unit safe and habitable.
Lease Termination Rules
Let the tenant know under what conditions they can terminate their lease and what responsibilities they must fulfill. When it comes to breaking a fixed-term lease, there are certain situations where it’s legally justified. In such cases, let the tenant know the advance notice and documentation they must provide you with.
Do the same for periodic tenancies, like month-to-month, as well. Let the tenant know of the advance notice requirements before moving out as well as penalties for unjustified terminations.
Security Deposit
Tenants have certain rights when it comes to their security deposits. Make sure tenants receive a receipt when for their deposit as well as information regarding is storage and return turn date. You should also clarify what the deposit can be used for as well as documentation of damages should deductions be made.
Mandatory Disclosures
State laws also require landlords to disclose certain information to tenants. And you must do so before the tenant moves in. This may include things like:
- Concentrations of lead-based paint.
- Educational materials about bed bugs.
- A copy of the landlord-tenant act.
- Disclosure on how utilities will be shared in a multi-unit complex.
You can include these as part of the lease agreement or separately. Either way, make sure your Arizona tenant signs and dates it before moving in.
Bottom Line
Having a clear and detailed lease is key to a solid landlord-tenant relationship. For expert help in this regard or any other aspect of property management, look no further than Denman Realty & Property Management. Our comprehensive property management services can be tailored to meet your specific needs. Get in touch to get started!