So you have taken your first step towards being a landlord and purchased your rental property in Cary, North Carolina and you are now wondering where to go next. Well, the next step you should take is drafting out a perfect lease.
Yes, you read that right.
One of the biggest and most common mistakes that landlords make is to fail to mention all of their expectations and requirements in the lease, which only leads to bigger problems later.
Landlords who are smart are aware of the fact that creating a solid lease agreement is the best way for them to safeguard their rental property from any potential tenant trouble. A solid lease agreement - at the minimum - includes the following things:
7 Things to Include in Your Cary Property’s Lease Agreement
#1: The lease should include the basic clause:
First and foremost, any rental lease agreement in Cary should include the address of the rental property, along with the names of all the parties (i.e. both you as well as the tenant) in the agreement. Furthermore, you should also include the lease term, which can either be a monthly agreement that starts on the first of each month and has a specific end-date, or can be a lease that continues automatically and remains active and with full effect.
#2: The lease should include a security deposit clause:
A perfect lease should include a clause that mandates the tenant to pay a certain amount of money as the security deposit. This is usually the equivalent of at least one month's worth of rent on the basis of the total value of all the furnishings and the costs of repairing should anything go wrong. In some states, such as NC, the landlord is required by law to deposit the security deposit of the tenant in an entirely separate interest-bearing savings account, and return the deposit with all the interest it has earned to the tenant (minus damages - if any) when the lease ends.
Additionally, you must find out and thoroughly understand all the laws pertaining to property renting in Cary, North Carolina and have your lease agreement reviewed by a qualified and practicing real estate attorney to make sure that it follows the law. Bear in mind the fact that security deposits can get problematic if they are not handled properly.
#3: The lease should contain all information on how the premises should be maintained:
Your lease should contain in-detailed and relevant clauses how your tenants should maintain the premises. This includes several things including (but not limited to) abiding by all rules on noise control and not changing any locks without getting written permission from you first.
Additionally, you should itemize all the furniture and appliances that are a included in the Cary, NC rental property and make a note of their current condition. You must also include other special considerations (if any). NEVER count on your tenants to follow your oral requests like not being permitted to park in the driveway. By a rule of thumb, always make sure to spell out each and every requirement regarding the maintenance of the premises on the part of the tenant carefully in the lease. Also, mention a clause on which party will hold responsibility for the utilities - the landlord or the tenant. Make sure that you take your time and spell out all relevant details in the agreement.
#4: The lease should include a warning on whether there are any concealed defects in the rental property:
Some jurisdictions, like Wake County, NC have a law in place regarding the legal duty of landlords to warn their tenants of any concealed defect in the rental property that either is known to them or is anticipated by them.
Therefore, as a landlord, you must make sure to include these things in your lease agreement to avoid serious legal trouble later. For instance, if your deck is shaky and you have not legally warned your tenant about it, you will be answerable in a court of law should something happen. The best thing, therefore, is to fix any known defects prior to the tenant moving in or at least disclose the defect by including it in the lease.
#5: The lease should include a clause on subletting:
Many Cary landlords often get a tenant who would like to sublet the rental property - either to a stranger or a friend or acquaintance. To avoid any inconvenience if such a situation arises you must ensure that your lease agreement duly includes a clause on subletting. This will mandate your tenant to obtain a written permission from you before they can sublet the rental property to anyone else. This puts you in the position to have the choice of accepting or declining your tenant's offer of subletting the property.
A word of warning though: If you want to accept your tenant's offer to sublet the apartment you would be much better-off terminating the lease of the original and signing a fresh and updated lease with your new tenant. Furthermore, you must complete a thorough background check of your new tenant and include a brand new security deposit. Never use the original lease agreement on the new tenant who previously wasn't a party in the agreement, since it will only put you in trouble.
#6: The lease should include the rules of termination:
One of the best lease agreement practices that you should do as a landlord is to include the details of rules of termination in your lease in Cary, NC. In this regard, you must find out all the rules on lease termination in your jurisdiction and include them in yours. Not only will this protect you in case something happens, it will also educate your tenant on the laws of the state as regards renting a property (especially if the tenant is from out-of-state). Terminations can occur in any one of two ways - either when a non-continuing lease ends or when an eviction takes place.
While the former is quite straightforward, the latter can sometimes be tricky. You may be aware of the rules of your state but if you have failed to include them in your lease and end up improperly notifying your tenant of his/her eviction, chances are that you may end up being sued. And while free eviction paperwork can be easily found online it would be better to consult your attorney if you are thinking of evicting your tenant.
#7: The lease should include a clause on what happens when the tenant leaves the rental property:
Will you compensate your unpaid rent with your tenant’s personal belongings? Well then, you must check your local renting and property laws in Cary, NC and include a clause in your lease agreement stating what happens when your tenant leaves the rental property and how you will deal with your tenant's belongings as a landlord. Remember that the law varies from state to state. For instance, some states have ruled it unlawful for the landlord to confiscate the personal property of a tenant to compensate for unpaid rent, while others permit the landlord to confiscate the items and declare the property as abandoned. That said, the prevalent law in most states is for the landlord to keep the property of the tenant for a specific period and furnish a notice about the same to the tenant. Additionally, some states also permit the landlord to ask the tenant to pay a specific 'storage fee' for keeping the latter's personal property.
By including all of the above clauses in your lease agreement for renting your property in Cary, North Carolina you will have created a solid lease that will protect both you and your tenant against any unforeseen circumstances.
If you are looking to hire professionals, make sure for a property management company to work with make sure you ask the property manager the right questions and see what they usually include in a rental agreement.