Today, we’re talking about the importance of a lease agreement between you and your tenant. This is an important document to have because without an agreement between both parties, you’re operating on nothing more than a handshake, and that won’t stand up in court. Leases are available through the state of California, and that’s what we use at Action 1 Properties.
Be careful of other leases you find online through other agencies. Your rental agreement has to be specific to California. The California Lease Agreement is six pages long and it covers everything, including the property address and how much rent is every month as well as when rent is due. It discusses the security deposit and how much move in costs total. It also addresses who holds the security deposit. At Action 1 Properties, we hold it in a trust fund. Remember that you aren’t allowed to collect interest on the security deposit. Your lease must also address late charges, parking, utilities, who takes care of the yard, maintenance and grass.
There are also things to include that many landlords don’t think about. Your lease should discuss neighborhood conditions. State law doesn’t allow you to find out who is living in the neighborhood or collecting information like how many kids they have and whether they go to church. You cannot talk to the tenant about those things because it’s private information.
Property alterations also need to be included in a lease. Stipulate whether a tenant can make changes without your consent. Your lease needs to spell out when the landlord can enter the property and under what conditions they might do that. The law requires you to give tenants a written notice 24 hours prior to showing up.
The lease agreement we use also covers a pre-move out inspection period. This is required in California. You are required to send the tenant an informational booklet that tells them their right to have a pre-move out inspection 14 days prior to the end of the lease. Give them the right to have this inspection, and it’s up to them whether they want to use it or not. Your lease should also offer the right to go to mediation if you and your tenant don’t agree on something.
Do a move in and a move out checklist and attach that document to the lease. This details everything in the property and its condition. When a tenant moves out, you can then go back in and do the move out inspection with the same checklist you used during the move in. This helps you determine the damage that was left behind. You can compare the condition of the property at each time.
Protect yourself with a strong lease. If you have any questions or need any help, please contact us at Action 1 Properties.