A strong rental agreement includes protections for you as a landlord as well as clarifications for the tenants who are in your property. You must include certain things in your rental agreement, and it’s also important that you comply with federal and state laws. This is very important because if you are not operating in compliance, you aren’t going to be able to make any money on your investment.
Address Compliance and Consequences
Provide a clear understanding of the consequences to lease violations when a tenant is non-compliant. For example, make sure you state what the late fees are, when they are charged, and at what point they start occurring. You’ll want the rental agreement to say when a tenant might be evicted. It should also include the notification that you report payments and delinquencies to credit agencies.
Protections for the Landlord
You also want your rental agreement to state any protections that are in place. If you are delivering a commercial space and it’s supposed to be done by the first of the month but you cannot get it done until the 15th, you are potentially at risk for owing that business loss of income for those 15 days. We will ensure that you understand your risks and we will make sure your rental agreement protects you from income loss.
Additional Components to Your Agreement
A strong rental agreement will also include information on property maintenance as well as common area expenses and how they are shared and who is responsible. When tenants move in, they must understand the condition of the property and not ask for other changes. Renter’s insurance must be included, and your agreement should state that. If there’s damage to appliances due to a water leak, you’ll want your tenant’s renter’s insurance to cover the damage.
Commercial vs. Residential Rental Agreements
There are some big gaps between commercial and residential properties. Residential properties are better regulated and tied into the Kansas Landlord and Tenant Act. Commercial properties allow for more flexibility. There may be escalation costs tied to different indexes and options to extend. You need to know how you can and cannot use a property, and everything needs to be outlined in the rental agreement.
We have been doing this for a long time, and we manage everything from single family houses to large commercial spaces. If you’d like to access some of that experience, please contact us at Property Management Partners.