Many new or casual landlords may thinks it’s alright to do business with verbal agreements. Some new landlords may not want new tenants to think they don’t trust them. Some casual landlords may think that a lease or rental agreement is just not necessary or they’ll never need it. I have to say both landlords are wrong and could regret not getting everything in writing with a Lease and Rental Agreement.
Purpose of the Agreements
The purpose of rental agreement contracts is to create a paper copy of what all parties agree to. This is where you document what you both agree with. This way everyone has a good understanding of what is expected of them. A tenant may agree to be responsible for the water bill. The landlord may agree to cover all repairs except for damages due to wear and tear. Each party should be comfortable with the terms before signing. This document can serve as a reminder down the road when memories start to fade. If nine months into a one year lease, a tenant wants to know who is responsible for certain repairs, they can pull out their lease and it’s all there.
Legal Obligations and Rights
Rights and obligations can vary from state to state. Your lease and rental agreement should show what you are legally obligated to do and what your rights are. For instance, a one year lease basically obligates you to lease your property to a tenant for the period of one year. If the tenant does everything they agreed to in the lease, you have to provide them a safe and operational place to live. Your rights should be to receive rent for the property usually at the beginning of the month before a certain date or rent + late fees for late rent. Your lease and rental agreement may help to resolve those gray areas if you and your tenant find yourselves in court. If your tenant has decided to stop paying rent until certain repairs are made, your agreement could help a judge to resolve the problem. If your tenant is breaking things and holding out on rent, a judge may decide your tenant is trying to get out of paying you. But if your tenant’s roof is leaking onto an electrical outlet, they probably have a legitimate reason for holding rent and a judge could make you fix things before getting your rent. Either way it helps sort out problems that a verbal agreement could never fairly resolve.
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