When you, as a landlord, have people interested in a unit, you’re maybe seeing dollar signs in rent. Maybe you’re thinking of increasing the rent every few months. Or maybe you have a problem tenant who is after you to continually reduce the rent. Guess what? There is something to protect each of you. It’s called a “Lease”.
Neither party should be wary of a lease. It helps lay the ground rules for tenant, owner, who is responsible for what, when and where. There are different types of leases: a one year lease may provide for a lower rent (a rent discount or concession) for the first month or months to induce a rental. A yearly lease may provide for higher rent with an automatic annual renewal or a roll over to month to month tenancy. A multi-year lease may provide for a rent increase at the start of each new lease year.
There are many areas which the lease can cover for both the tenant and landlord. For example, when leases provide for periodic changes to the rent, are clarity and notice. If the rent change is based on something other than a dollar amount (e.g., the monthly rent shall increase to market rent), then the terminology (market rent) must be clearly defined. A lease providing for an initially lower rent should clearly state if it is a one time or continuing concession, if the total concession amount is applicable to the initial month(s) or spread over the entire lease, and if it is recoverable if the lease is breached. The resident may be unwilling to renew the lease. If a lease term expires and the resident remains in possession and continues to pay rent that is accepted by the landlord, then a month to month tenancy is established at the old lease rent amount.
For more information and help in drafting a lease, please see an appropriate attorney.