Once you have made the decision to rent out your property to a potential tenant you will want to contemplate several issues within a lease agreement. A lease agreement is a binding contract between both the owner and the renter. Thus, whatever is placed into the agreement and agreed to will be binding on both parties. As a potential landlord, you will want to understand the seriousness of the issues in the lease agreement.
Since a lease agreement is a binding contract between two parties, it must meet certain state requirements on contracts. Additionally, as a landowner you will want to be aware of any local ordinances or issues which may impact your lease agreement.
For example, a recent Airbnb issue has come to light in the city of San Francisco. A couple leased their house to a neighbor for over 30 days. However, the city of San Francisco has a lease requirement, which grants certain rights to the tenant with regard to eviction after 30 days. Because of this issue, the tenant could not be removed from the property even though the lease was up. This issue is an example of some of the potential legal pitfalls that can befall a property owner when leasing out their property.
As was demonstrated in the preceding paragraph, a potential landlord wants to investigate the legal ramifications of leasing their property prior to making any agreement. Thus, you may want to seriously consider discussing the legalities of your property rental agreement (lease) with a lawyer. They can inform you of all of the legal issues that must be met in the agreement, as well as any local ordinances, which should be met. Additionally, it would be a smart decision on your part, to have this lawyer review your lease agreement just prior to beginning the marketing of the lease. This could be a final step in ensuring that all of your legal concerns are covered and protecting you as well as your property.
Contents of the lease agreement
As was previously stated a lease agreement is nothing more than a binding legal contract between two parties. All contracts have three basic elements, which must be met in order to be enforceable. The three elements are offer, conditions, and acceptance. While the offer and acceptance portions of the lease a rather straightforward, it is the conditions, which usually cause the most problems in a lease agreement.
Any contract including a lease agreement can have a large listing of conditions to be met for the contract to be enforceable. The two parties can agree on multiple points in the agreement. For example, the two parties may agree on the color of a specific room to the maintenance of the yard or even the regulation or set temperature of the interior of the building. Thus, your agreement may have multiple conditions or just a few.
The primary conditions, which will be discussed and agreed to in a lease agreement, are price and duration. Of these two main aspects price will be the most important issue. The reasoning is that the transfer of money is one of the key determinants that an agreement was made regardless of an actual physical agreement. Thus, it is possible that a lease agreement has been developed without any physical agreement, only the exchange of money for use of a property. Therefore, if you’re considering renting out any property to anybody, regardless of their relationship to you, you should have a physical lease agreement with that party. In this light, the story from San Francisco makes more sense.
If you’re considering leasing out your property, you should at a minimum follow these steps. First, develop a lease agreement in writing, which specifies both parties’ conditions for the lease. Next, you should have a lawyer review the agreement, ensuring that it meets state and local regulations for the leasing of property. Finally, you need to understand that the agreement can be amended through negotiations, but once both parties agree and sign the contract it is a binding agreement between the two parties.