Drafting a lease agreement is one of the most significant steps in the process of renting your property. If it goes wrong, you may find yourself in disputes with your tenants and end up landing in a serious legal conflict. Hence, it is advisable to create a well-written rental contract by adding all the essential provisions.
Here are some basic details that must be included in the rental lease agreement for a multifamily property.
Number Of Occupants Allowed
It is crucial to add occupancy limits on your property in the lease. You can decide a limit to the number of tenants that can occupy the multifamily unit as long as you comply with all occupancy and housing laws.
A landlord’s right to fix the number of occupants comes under the local rental laws. Before creating a lease agreement, you can consult a lawyer or the U.S. Department of Housing and Urban Development to determine the occupancy limit.
Federal occupancy standards allow landlords to keep two tenants per bedroom. But, if you are setting an unreasonably low number, you may risk the charges of discrimination against tenants.
Duration of Tenancy
You need to specify the exact date from which the tenancy begins and the date it will cease. Here, you need to decide whether you want a weekly, month-to-month, or annual lease renewal. The most common duration of the lease agreement is one year.
Each year, the landlord has to renew the contract by taking the signatures of his tenants if they want to continue to stay in your property. On the other hand, short-term agreements are easy to handle and flexible. However, you need to go through the tenant screening process frequently while selecting new renters, at the end of the previous tenancy.
It is necessary to add the rental amount to be paid by the tenants, according to the duration mentioned in the agreement. A standard rule to decide how much rent you should charge is to take 1% of your property’s rental market value. It may depend on the size, location, and the amenities you offer in your property. You can analyze the current market scenario to understand rental prices in your area and decide a fair rent according to the market competition.
In addition, you should also add the acceptable payment methods i.e., online/offline, due date, late rent fee amount (if any), grace period (if any), and charges if a rent check bounces.
Terms of Security Deposit
A lease agreement for a multifamily property must include a clause for the security deposit. As a landlord, you should add every detail of the security deposit, such as:
- The amount collected as a security deposit
- The date of collection, name, and address of the bank where you have kept the deposit
- The interest rate on the security deposit
- Causes for deducting the amount from the security deposit (if any)
- The procedure of returning the security deposit
You can refer to the local and state laws while deciding the amount of security deposit. In case of termination, you have to add the duration of returning the deposit to tenants, which can be 30 days from the date of eviction.
About Repairs and Maintenance
You should clearly state the maintenance policy and liability for rental repair in your multifamily property lease. The landlord needs to conduct routine maintenance and fix all significant damages such as deteriorated roofs, damaged flooring, non-functional appliances, and other damages caused due to normal wear and tear.
If the damage occurs due to tenant negligence, renters are expected to pay the amount for repairs, or landlords may withhold a portion of the security deposit if they refuse to pay. Knowing the state landlord-tenant laws will help you to understand the duties of both tenants and landlords towards rental maintenance and repairs.
Clear Pet Policy
Add a detailed pet policy in your lease that includes the type or breed of pets you allow or if you do not allow pets at all. Remember that according to state and federal laws, you can’t refuse tenancy to physically disabled tenants who need service animals, or emotional support animals. It is also essential to add pet fees, pet security deposits, and insurance policies to your lease.
There are several factors to be understood and considered while creating a rental lease agreement for a multifamily property. Creating a lease for a multifamily rental can be more complex than it is for single-family homes, and it may not be easy to frame the contract singlehandedly.
In such cases, you can take help from professional property managers in Philadelphia, such as TCS Management, to create a comprehensive rental contract. Contact us at TCS Management for more assistance on outlining the lease agreement for your Philadelphia multifamily rental property.