The most important thing you need to know about leases is that you must have one for every tenant—no exceptions. Whether the tenant is under an open-ended month-to-month rental agreement or a fixed-term lease, have a written contract on file that covers every occupant of every property.
When leases are prepared by an attorney, they often have language that tenants find difficult to understand. Of course, if tenants sign a lease, you can legally enforce it whether they understood it or not, but a better way to operate is to have your leases written in common, easily understandable language. That way, your tenants know what's expected of them and what they should expect of you. This is especially important with low-income housing, because often those tenants' reading skills are on a fairly low level. I have found that low-income and moderate-income tenants follow the rules and honor their obligations so long as they understand what they are supposed to do.
Your lease or rental agreement should comply with all relevant laws, including rent control ordinances, health and safety codes, antidiscrimination laws, and other state laws. Each lease should include the following:
■ Names of all tenants. Every adult who lives in the unit should be named on the lease and sign as a responsible party. Children should also be listed.
■ Occupancy limits. Clearly state that occupancy is limited to those listed in the lease agreement. This allows you to evict a tenant who lets a friend or relative move in or who sublets the unit without your consent.
■ Tenancy terms. What is the length of the tenancy—month-to-month or a longer fixed term? State it in the lease.
■ Deposits and fees. State the amount of the security deposit, how it may be used and not used, when and how you will return the deposit, and any nonrefundable fees, such as those for cleaning or lock changing.
■ Repairs and maintenance. Clearly define your and the tenant's responsibilities for repairs and maintenance. Include restrictions on tenant alterations.
■ Legal right of access. State how much notice you provide before entering for repairs and maintenance.
■ Restrictions on illegal activity. Explicitly prohibit such illegal activity as drug dealing and such disruptive behavior as excessive noise.
■ Other rules and restrictions. Detail other important rules and restrictions, such as limits on pets, use of common areas, parking issues, and so on.
In addition to the lease, each tenant should sign a Move-In Condition Inspection form. This can be a simple, one-page checklist that indicates the condition of the unit and eliminates any dispute over possible damage when the tenant moves out.
■ Don't Discriminate
It's your property and you can rent to whomever you want, right? Wrong. Federal law prohibits housing discrimination on the basis of race, religion, ethnic background or national origin, sex, age, having children (except in certain designated senior housing), or a mental or physical disability. Some state and local laws prohibit discrimination on the basis of sexual orientation or marital status.
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