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How to be a Landlord - The Lease

In this posting we talk about the lease agreement.

In our previous posting we talked about screening potential tenants and finding just that right one. Now let's get a lease. You might be tempted to just agree to terms orally and shake hands and while that can be legally binding, oral agreements often lead to ambiguity about the obligations of each party since memories fade over time. A well written, signed lease is best to lay out your and your tenant's obligations. We have a Florida attorney prepare all of our leases to make sure we comply with any specifics of our state and changing law. I'm not suggesting you must use an attorney, however if you use a pre-made lease you got online, make sure that it's up to date and complies with Florida law.

At the mimimum, a lease must include:

  1. Name of landlord
  2. Name of Tenant(s)
  3. Property description
  4. Amount of rent
  5. Start date
  6. Duration
  7. Granting clause: Landlord hereby leases to tenant...

And while Late Fees, Security Deposit, Last Month’s Rent, Bad Check Fee are not provided by law, they should be provided for by lease. Speaking of last month's rent, taking one keeps your security deposit just that, a security deposit to cover damages. In this economy, coming up with last month's rent in advance can be difficult so you might allow the renter to pay it over the first number of months of the lease.

Specify in your lease that the property is to be used for only residential, non business, private housing purposes only. Be very clear as to who is responsible for what on the property. If the tenant is going to be responsible for lawn care or certain repairs, specify that in the lease. Your lease should also allow you to make periodic inspections of the property which might be the same time you do preventive maintenance.

If you are going to allow pets, you would typically add a pet addendum to the lease that specifies the terms and conditions for keeping a pet on your property as well as details about the pet(s).

You want to think of the lease as the source of answers to questions that might arise during the time they rent from you. There is much more that should in a lease then we can discuss here so I do suggest you consult with an attorney to make sure you cover all your bases.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Anita Shwarts April 18, 2012 at 07:33 PM
Paul, If you take your example, you pay $800 rent and $800 security to move in. If last months rent is required, ask for an agreeable payment plan. (this is landlords choice, however if they don't take last months rent many tenants use their security deposit against this and leave no deposit if the property is damaged.) If last months rent is paid and you give 30 days notice, then your rent has been paid in advance and nothing is due, leaving you $800 for a security deposit for the next property, this means that you need to find no additional funds to move house. If new landlord asks for last months rent, ask for a payment plan so that when your security deposit is refunded this can be used. In reality a good tenant should not need additional funds to rent a home. A lease should state where the security funds are held and type of account. Tenants and landlords are equally proptected and Florida has fair housing rules regarding holding on to and /or claiming against your deposit. The article we linked to earlier details this really well. In reality a landlord will not report a tenant if they always paid their rent on time and they left the property in good order... but if you as a tenant are always going to do this, then there should never be a need to use the security as months rent. The point of this blog is to hopefully show that a 'well written lease' protects a tenant from a bad landlord or a landlord from a bad tenant.... after all both parties have rights....
Pat Dunham September 27, 2012 at 08:39 PM
I totally agree that a good lease is written to protect both the landlord and the tenant. I believe it is true that a landlord needs to stipulate where the security deposit is held and can choose to indicate that it is "being held in a non bearing interest account with co-mingled funds". Do you find that information correct?
Paul Ray September 28, 2012 at 11:41 AM
Sorry, took a while for me to read the follow up post. I think the numbers are a bit wrong. Let's presuppose I live in an apartment that required first months rent of 800.00 and a security deposit of 800.00 and my lease expires. I notify the landlord with my 800.00 rent on let's say Sept 1 and that I would be moving into a new apartment Oct 1. The new apartment is also 800.00 a month with first months rent and a security deposit. I need to give them the 1600.00 before I can take possession of the unit. So I move out of my current place and the rent I would have paid to the current place I have as the 800.00 down (1/2 of the 1,600.00 total) however I need to save an additional 800.00 for the deposit since my current landlord will not release the funds till a walk through is completed which means all my belongings have been moved out, and in almost all cases, the deposit must be returned within 30 days of moving. So, I am not understanding where I have the total of 1,600.00 under your scenario. I have 800.00 and a promise for the additional 800.00 which could be some time till it arrives. That was my point and most people who have rented and moved understand this.
Paul Ray September 28, 2012 at 11:44 AM
Most states require a security deposit and a last months (if required) to be put in an escrow account bearing interest and a quarterly statement sent to the tenant on the contents of that account. I find that more than fair, after all, the funds are property of the tenant and should be awarded interest. Albeit, interest rates of 1% are not much to speak of it is still something the tenant should be afforded.
Anita Shwarts September 28, 2012 at 01:56 PM
Pat, please note that the requirement for security deposits may differ in accordance with the lease written. The most important thing is that the tenant has the right to know where the money is being held and if there is interest being gained then who it is to be paid to. Property managers do not have to hold the funds in escrow, however they do have to hold the funds separately (no co-mingling) and in a non-interest bearing account. Our lease have to clearly state this and even tell the tenant which bank they are held in. There are of course, as mentioned previously very strict procedures in claiming and returning funds in regards to a deposit.

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