You have a ready, willing and well-qualified applicant for your rental property and you’ve run the usual tenant background and credit checks. The task of preparing a rental property lease agreement is now before you.
A tenant lease agreement is an agreement between a landlord and tenant that sets out the various parameters of that relationship. It’s absolutely critical for any landlord to understand how they work.
Maybe you don’t know where to start? Do you know if your city, county, or state require specific language? Today we will discuss the key steps to follow and resources to explore to make sure you find the right lease agreement.
Traditional sources of leases
Local associations of Realtors, Landlords, and Attorneys
Nearly every corner of the country has a local association of Realtors or State Bar. Many real estate agents and brokers deal with rental properties on a daily basis and many are also members of the local association.
Most of these associations spend a considerable amount of money drafting and maintaining standard lease forms that cover every imaginable law, rule, and regulation applicable in the area(s) they serve. Some states also have landlord associations with reasonable membership fees that you should consider joining.
These lease forms are typically fill-in forms that are easily completed online or by hand. The big downside is that you typically can’t revise key provisions since these documents aren’t easily edited. They can also be prohibitively expensive, depending on the association.
If you can get a digital copy from a local agent or broker, perhaps someone who was involved in your recent transaction, that’s usually the best strategy. Most Realtors will readily provide the standard lease form, along with accompanying disclosures.
Keep in mind that you’ll have to finalize all the details yourself when pursuing this approach. Even if you don’t use the actual form, it can be incredibly helpful to see how the association handles typical tenant issues and other standard lease clauses.
Here are quick reference links to residential lease forms made available by real estate, landlord, and legal associations in the six most populous US states:
- California:LR – Residential Lease/Month to Month Rental Agreement
- Texas: Texas REALTORS zipForm Sign Up
- New York: New York State Association of Realtors & Real Estate Board of NY (NYC)
- Florida: The Florida Bar: Landlord Tenant Forms
- Illinois: Illinois Legal Aid: House & Apartment Forms
- Pennsylvania: Landlord Association of Pennsylvania
For the other 44 states, Washington DC, and US territories, we recommend a quick online search for, “[your state] residential lease agreement.” This should give you plenty of leads to standard form agreements available online, along with links to statewide Realtor associations.
Local apartment owners associations
Every state and many larger cities have a local apartment owners association. You may want to consider joining one for discounted or free access to their proprietary tenant lease agreements, which are nearly always both thorough and landlord-friendly. Network is never a bad idea in the real estate investment business!
Membership may also give you easy access to other forms like eviction notices, rent increase letters, etc. Each local apartment owners association is different of course, but many also make available some level of access to seasoned real estate attorneys as a benefit of membership.
To find your local apartment owners association, just run an online search with your city or county name. You can also ask a local multi-family real estate agent to refer you.
Nothing beats having an expert, local real estate attorney who you can trust with all your documents and related legal needs. The scope of their services can be as simple as drafting a reusable residential lease agreement that you then use to fill in the details.
You will need an attorney anyway for your transactions, so this could be your best source for obtaining a draft lease.
They can also represent you in more complicated proceedings should you find yourself dealing with a problem tenant. A solid local real estate attorney should be familiar with every conceivable law and regulation related to residential tenancies.
While finding an attorney is rather simple, finding a great attorney who can answer questions from experience and memory versus hours of tedious research, is no small task. If you use websites such as Google.com or Yelp.com to search for local real estate attorneys, be sure to read their reviews and recommendations.
Try to make appointments to meet attorneys in person to build a solid rapport. You can also ask for attorney recommendations from other rental property owners. Finally, friends, family, and other business associates can also be good sources for personal referrals.
Other local rental property owners
Another viable source for rental property lease agreements is other rental property owners in your local market. Seek out other owners with growing portfolios as they’re more likely to have access to lease documents that have been thoroughly battle-tested by actual tenants.
Great places to meet other owners include local Meetups, investing groups, Facebook Groups, and your local Apartment Owner’s Association. Offer to share your rent comp or help them in some other useful way in exchange for a copy and permission to use their favorite tenant lease agreement.
Legal forms online
There are plenty of online resources to find lease agreements. We will look at two of the most widely used online services: RocketLawyer.com and LegalZoom.com
Rocket Lawyer is a website and service that caters to a variety of legal needs, including those of rental property owners. Landlords can create a number of legal documents including a residential lease agreement specifically tailored to the state in which the property is located.
A typical rental property lease from Rocket Lawyer includes all key clauses needed to cover basic lease terms and the most common landlord-tenant disputes. These standard tenant lease agreements are typically 15 pages or longer and reflect many years of accumulated knowledge and legalese.
You can sign up with a free 7-day trial, which should be sufficient to get a feel for their landlord-friendly documents and create your tenant lease. If you wish to continue with Rocket Lawyer, it’s around $40 a month. You can cancel any time.
Other reasons to use Rocket Lawyer include:
- Quick legal advice from their “On Call” lawyer network
- Free 30-minute consultation on each new matter
- Extensive library of online resources addressing a wide number of legal topics
- Quick access to legal assistance should any issues arise that warrant further research and/or legal action
Legal Zoom is another service to create practically any legal document you may need. You’ll answer a list of questions in an interview-style format, which will then be used to create a state-specific residential lease agreement, including any disclosures required by the state in which the rental property is located.
Legal Zoom’s pricing model is different than Rocket Lawyer’s. Legal Zoom charges a per-document flat fee as opposed to the subscription model. Legal Zoom has two pricing options for a tenant lease; “Deluxe” at $29 and “Premiere” at $49. The Premiere package includes a detailed 12-page lease with over 20 provisions, state-required disclosures and six months of unlimited revisions.
Some advantages of Legal Zoom:
- Less expensive if you just want to prepare a single lease
- Membership plans are available if you have other legal needs
- Comprehensive online library of legal resources
Rocket Lawyer and Legal Zoom are two of the most well-known online legal services. Both offer landlord-friendly legal documents at an affordable price. Either one should adequately serve your needs as a landlord looking to get your tenants started off on the right track.
Bottom line: Improve your lease over time
If you’re just getting into the landlord business, you may be under the impression that the perfect lease agreement can protect you from all tenant-related risks. The truth is more complicated and savvy investors will tell you there really is no perfect lease.
Sure, some are more clearly articulated, easier to read, shorter or longer, or more landlord-friendly than others. But there’s just no way to protect yourself from every conceivable issue that can arise when someone else is occupying your property over an extended period of time.
Our best advice is to learn as you go, pay attention to what’s important to you personally, and be sure to improve your standard lease form with the arrival of each new tenant. It’s a process that you’ll want to master over time.