A rental agreement outlines the rules, regulations, details and parameters to be followed by a tenant while they are leasing property. It should cover a range of policies and specifics to ensure compliance; however, some areas are more important than others.

Here are five key rental agreement policies landlords should include:

1. Security Deposit Details

While the amount of the security deposit will have been clearly stated during the application process, rules and parameters related to possible penalties and deductions from its amount should be clearly stated in the rental agreement.

2. Late Fee

Charging a late fee when tenants are tardy with rent is one of the most effective ways to compel consistency with payments. The amount and terms of this policy should be in compliance with state laws and mapped out clearly in the rental agreement.

3. Number of Occupants and Subletting

The number of renters that a landlord chooses to allow in their property should be clearly delineated. If subletting will be an option for current tenants, clear guidelines about the process should be spelled out in the rental agreement. Having the current tenant pay for tenant screening and a background check for the new renter should be strongly considered.

4. Pet Policy

If pets are strictly not allowed, the rental agreement should state this clearly. If they are, rules and parameters should be spelled out. Some components of this section might include limits on the number of pets, their size and type. Specifics about keeping the interior and exterior of the property maintained should also be included. Many landlords charge an additional security deposit amount for pets, and some make it non-refundable; be sure to delineate all of the specifics of your pet policy.

5. Termination and Other Restrictions

Rules, laws and guidelines for termination of a lease and tenant eviction vary from state to state, but a rental agreement should include a policy that is in compliance. Grounds for eviction might include illegal activity on the premises or failing to pay the rent for a certain number of months.

A rental agreement can help to avoid disputes down the road related to property rental. While it should contain a range of key details, these five policies are crucial, and landlords should ensure they are clearly delineated in their rental agreement.

Disclaimer: The information on this website does not constitute legal advice and is governed by our Terms of Use. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this website and its associated sites.

You’ve probably heard of or seen the headlines. A homeowner rents out their home on a short-term basis and ends up with the legal nightmare of a squatter who won’t leave.

The “sharing economy” refers to the trend of consumer peer-to-peer rentals of houses, cars, skills, and other goods and services. With the rise of the sharing economy, many homeowners have become de facto landlords through use of sites like VRBO and Airbnb.

How can property owners protect themselves as they pocket a little extra cash?

Understand state and local laws

You could rent out your home as a short-term vacation rental for years with no problems. In fact, that’s how it goes for the vast majority of homeowners who earn extra money with sharing economy sites like Airbnb. Most guests are respectful of your property, and many will leave it in better condition than they found it.

But it’s the handful of outliers who can cause serious and costly problems for property owners. First, homeowners should understand that short-term rental of homes is not legal everywhere. And an owner might have to go to court to evict a guest who decides to stay beyond their welcome.

Before renting out a home on a short-term basis, owners should research and understand pertinent local and state laws. In some areas, a stay longer than 30 days falls under landlord-tenant law rather than laws that cover hotels.

Take advantage of all available protections to thrive in the sharing economy

Airbnb encourages hosts to check into prospective guests by reading reviews on the site and contacting the guest, The Desert Sun notes. Airbnb requires that both hosts and guests be site members, and the site provides some vetting. Guests typically review sites where they stay, and hosts also can post reviews of guests. Airbnb also provides insurance to cover damage to a home by a guest.

Do your own sleuthing

Homeowners also can take the initiative to do their own research on prospective guests. Facebook, Twitter, Instagram and even a simple Google search can reveal a multitude of information about renters and their histories. Doing a little legwork can help confirm that prospective renters are being truthful about their identities and can save homeowners from potential headaches down the road.

Short-term rentals require caution

The new sharing economy has brought unprecedented opportunities for homeowners to make extra money from their investments. By understanding relevant laws, taking advantage of protections afforded by online services and researching prospective tenants, you can enjoy the benefits while minimizing the risks.

Disclaimer: The information on this website does not constitute legal advice and is governed by our Terms of Use. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this website and its associated sites.

New landlords face this dilemma when they start renting their properties: should they require a year lease, or rent the space month to month? It’s an age-old dilemma for landlords, and ultimately it becomes a matter of the specific renting scenario, personal opinion, and the landlord’s own comfort level.

Here is a listing of the pros and cons of yearlong residential leases vs. month to month arrangements:

Year-Long Residential Leases

Advantages:

Better cash flow. The tenant is “locked” into and committed to tenancy for at least a year. (An additional year lease or month to month terms can be negotiated after the year is up.)

Stability and security. Longer-term tenants give the landlord stability of income for a set period.

Less stress, hassle and cost related to renting. With a yearlong residential lease, there will likely be fewer obligations and turnover costs related to renting the unit over time.

Disadvantages:

Locked into the lease. If the tenant is not a good fit, the terms cannot be changed until the residential lease is up.

Fixed financial terms. Landlords cannot raise rents during the lease period.

Evictions are difficult. In the case of problem tenants, it can be difficult and stressful to evict them. Violations must be proven, and costly legal action is often necessary.

Not an Ironclad guarantee. Just because a tenant signs a lease, there is no guarantee they will actually stay through the entire term.

Month to Month Terms

Advantages:

Low-Commitment Renting. Landlords can end a tenancy easily when proper notice is given. This is a good structure in areas where interested tenants tend to be plentiful.

Flexible Terms. Landlords may change the rental agreement, the rent cost or other terms with notice to the current tenant or between renters.

Disadvantages:

Higher Turnover is Likely. With month to month rental terms, a higher tenant turn-over rate is likely. The tenant can simply give the agreed-upon amount of notice and move.

More stress, hassle and cost related to renting. With a month to month lease, there will likely be more obligations and turnover costs related to renting the unit over time.

Clearly, there are upsides and downsides to both yearly residential leases and monthly rental scenarios. In both options, quality tenant background screeners can help to eliminate potential problem tenants before you rent to them for any amount of time.

Disclaimer: The information on this website does not constitute legal advice and is governed by our Terms of Use. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this website and its associated sites.