Don Conrad is author of the book, “How to Find That Quality Tenant”. His book and his website (www.findthatqualitytenant.com) are dedicated to improving the landlords tenant selection process. On this website you will find educational articles, valuable links, real estate related forms, a tip of the month, a Fair Housing test, and much more.
If you are going to be a landlord, I strongly advise having a well-prepared lease. A good lease will solidify the verbal agreement and important criteria between the landlord and the tenant. It will also be your strongest ally should a dispute arise between you and your tenant. A properly entered lease will go farther in solving landlord/tenant disputes than any other document you have. In 99 percent of the cases, it is your first weapon in a courtroom battle.
Finding a lease.
So once you understand what a lease is, the next question becomes, “Where does one find a good rental lease?”
That’s an excellent question. One in fact, that I was having trouble solving for the scope of my book, How to Find That Quality Tenant. Fortunately, as I wrote the chapter on leases, I was determined not to let the problem stop me from helping you find or develop a good lease. Therefore, let’s begin with me telling you how you go about finding a lease that best fits your needs. As far as I am concerned there are basically three ways. I’ll list each of them along with the advantages and disadvantages associated with each choice.
Draft your own. (Should you choose to do this, read my article on the contents of a lease available on the articles page at http://www.findthatqualitytenant.com to better understand what should be in a lease)
The advantage: it is cheap.
The disadvantage: you could make some costly legal mistakes by not having enough information or the wrong information in your lease.
If you choose to draft a lease yourself, there are books you can purchase that will walk you through the process, although I cannot say how well they work, because I have personally never tried to draft my own lease.
You can pick one up at an office supply store.
Advantage: It is easy to do.
Disadvantage: It could be too general to offer adequate protection. When you need a lease right now, these store-bought leases can do the trick since they are so easy to find. They are cheap and simple but will offer the least amount of protection out of the three lease options.
You could have a real estate lawyer draft you a lease.
Advantage: It is tailor fit, offering you the best overall protection.
Disadvantage: It is more costly, although not nearly as costly as a poorly drafted lease followed by a tenant dispute.
As you can probably guess by that last comment, I recommend using a real estate lawyer to draft a lease. They know the laws for your state, county, and locale, and have a good idea which landlord/tenant disputes are most likely to trip you up. Let their expertise and past experiences work to your advantage.
In addition, when you are a landlord, you have at least some financial net worth; definitely more than your tenants will have. This automatically makes you prone to frivolous lawsuits and unwarranted demands by those tenants.
A properly drafted lease will offer maximum custom protection against many of the possible lawsuits and demands landlords are exposed to. Therefore, I would advise you to have a lawyer draft your lease and to do it from the time you put that first tenant in your first rental.
I know money can be extremely tight when you are first entering your landlording career, but I highly recommend using a lawyer from the beginning for this reason. If you draft your own lease or use a store-bought one and you have reasonable success with it for a couple of tenants, you could be lulled into a false sense of security. When you reach this point, you will never pay a professional to draft a lease for you until you end up with a legal dispute, which may of course, be too late.
Take my recommendation and spend the money initially on a lawyer structured lease.
(I am not a lawyer; therefore, if you have any legal concerns with anything in this article, please contact the appropriate legal counsel).
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