How to Write a Rental Agreement That’ll Keep Tenants in Line

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All landlords dream of having their rentals inhabited by perfect tenants—and that all starts with having them sign a rental agreement that spells out your expectations. It’s a vital step. This is the legal document that protects you from a whole slew of nasty surprises that tenants can fling your way, from late or unpaid rent to damage to your property—and plenty more random issues. You want to sleep better at night? Here’s how to write a rental agreement that’s airtight.

Payment information

This section of a rental agreement gives all the details on how much rent is due and when, and the consequences if the tenant doesn’t pay. You’ll want to include the following information:

• Exact amount of rent
• Due date
• Late fees that will be charged, and by when
• Returned check fees that will be charged
• Security charges and refund circumstances
• Utilities and other fees tenants are responsible for

Property particulars

You’ve got your rental home all spruced up, and the last thing you want to do is have to pay for damage inflicted by a tenant who didn’t properly care for it. Protect yourself! You’ll want your rental agreement to cover the following situations:

• Definition of the property premises, including common areas
• Definition of damage vs. normal wear and tear (e.g., minor wall scrapes, worn carpet, and other relatively easy fixes)
• Specific details on what can be altered (e.g., can tenant put holes in the wall for hanging pictures? Can the walls be painted?)
• Owner’s rights to enter and inspect he property, and how much notice will be provided (typically at least 24 hours is required by law)
• A reminder not to change the locks or bar your access to the apartment
• A reminder that the tenant should inform you immediately of any damage

Additional circumstances

It’s hard to foresee what a tenant might do, so it’s best to cover any eventuality you can think of. Here’s a list to get you started:

• Are pets allowed? What kind? How many?
• Are overnight guests allowed? How long?
• What parking is included?
• What can be stored on site?
• How many keys are included?
• What are the noise ordinances in the neighborhood?

And although you might assume that everyone knows this, it’s best to make the following things crystal-clear in your rental agreement just in case:

• Illegal activity such as drug dealing is strictly prohibited.
• The tenant is required to comply with all local ordinances, including laws pertaining to health and safety.

Keep in mind that your property and lease must also comply with all federal, state, and local laws, including health and safety codes, occupancy rules, disclosure requirements, rent control ordinances, and anti-discrimination laws.

How a real estate attorney can help

Not sure if the language in your agreement is ironclad? A real estate attorney can help you draft something or check your work.

“Not using an attorney is a huge risk,” says Ed Laine, partner/broker of Miller Laine Properties in the Seattle area. And since rental laws are constantly evolving, consider asking your attorney to audit your lease regularly and make changes to cover any new issues that might leave you vulnerable.

Remember, the stakes as a landlord are high—so why not do everything within your power to make sure your agreement is up to snuff?

Cathie Ericson writes about real estate, finance, and health. She lives in Portland, OR.