Standard Residential Lease Agreements
The Standard Residential Lease Agreements are documents that structure a rental arrangement in which one (1) or more tenants (called “lessees”) rent a residential property from a landlord (the “lessor”) so long regular payments are made to the landlord until the end of the lease. The common term of a standard lease is one (1) year, although the length is ultimately up to the landlord to decide.
What is a Standard Residential Lease?
A standard residential lease agreement is a form, that once signed, requires the parties involved to adhere to the conditions outlined in the lease agreement. While a lease cannot physically prevent a tenant from damaging property or skipping out on rent payments, it gives the landlord legal weight to evict the tenant as well as sue the tenant in order to collect any damages. The famous saying, “the best offense is a great defense,” couldn’t apply more to leasing; a landlord should ensure only tenants that pass an in-depth rental application be permitted to lease a property. Not only does this save needless headache down the road – it gives landlords ease of mind knowing they did all they could to ensure the tenant is occupied by trustworthy tenants.
Standard Leases by State
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
The Leasing Process
From getting a rental up to code and advertised, to introducing the first tenants into a property, the rental process should be taken with great care and due diligence in order to do it right the first time. The overview below provides landlords and property owners with a checklist to get a rental property up and running.
Step 1 – Prepare the Home
Providing a deep clean isn’t enough. Before being ready to accept tenants, a rental property should be pest free, have working appliances, be up to code, and free of any hazards or dangers. Remember: attempting to cut costs will only delay the pain. The tenant(s) will complain and request repairs, or worse, bring the manager of the property to civil court. It’s always better to ensure everything is repaired and in good shape before accepting tenants.
The following form can be used for ensuring a property is ready to accept tenants:
Step 2 – Determine the Monthly Rent
The rent that is set for the property needs to cover any costs associated with the property and accurately reflect rent averages for the area. In total, the following should be considered when determining a rent price:
- Cover all expenses – The rent needs to cover all expenses relating to the home, including taxes, mortgage payments, property management services, and any repair/ongoing maintenance costs.
- Compare rentals in the area – Seeing what other rentals are going for in the area provide as a great ballpark value. However, it is imperative to only compare properties that are very similar to the property what will be rented.
- Judge the current market – In an upmarket, rentals will be less desirable due to lower interest rates leading to an increase in homeownership. Rentals perform better in a downmarket, leading to a wider audience of rentals. Supply and demand leads to an ability to increase the rent price.
- Property value – By far the largest determinant of monthly rent is the value of the leased home or apartment. To calculate monthly rent based upon property value, take the total value of the rental and multiply anywhere from .08% to 1.1%.
Step 3 – Create a Lease Agreement
Using a standard lease agreement template, complete all applicable fields and save the document without any names or signatures on the agreement. This allows it to be easily reused for subsequent tenants. While writing the contract, check the local state laws to make certain that all fields are legal and sufficiently protect both parties. If the landlord wishes to lease the property on a monthly basis instead of on a yearly one, the month-to-month lease template should be used.
Step 4 – List the Property
To get the property in view of prospective tenants, the property should be listed online. For high-value properties, taking the time to advertise the property in addition to listing it can give it the publicity it needs to obtain a quality tenant. While some may recommend advertising in a newspaper, with the onset of the internet and the convenience of listing a property with the click of a button, using an online platform is the recommended course of action for landlords and homeowners. The following websites are recommended for advertising a property:
Required Notice + Security Deposits
Rental Lease FAQ
Does a Rental Lease Agreement have to be Notarized?
Notarization is the process of having a certified third (3rd) party officially verify a signature on a legal document. Generally, lease agreements do not have to be notarized. However, certain states, such as Ohio, require leases longer than three (3) years be certified by a Notary Public.
Although it’s not required, having a lease be notarized is an additional means of security, ensuring a lease agreement is enforceable in a court of law.