How to Make a Lease Agreement
The lease agreement outlines the policies that both landlord and tenant agree to. As a rental property owner, you want to make sure you have a lease agreement that is right for your local laws and your investment goals.
What is the Purpose of a Lease Agreement?
The purpose of a lease agreement is to clearly outline the standards, policies and terms by which both owner and tenant will abide. The lease terms must be agreed to and signed before the renter may occupy the property.
There are some differences between a lease agreement and a rental agreement. While a lease agreement usually outlines a fixed term (12 months, for example), a rental agreement is often month-to-month, with the ability to adjust terms more frequently.
Elements to Include in a Lease Agreement
There are many things a property owner may want to include in a lease agreement for a given investment property. This is not an exhaustive list of everything to include. However, these are some of the most common elements that we recommend that our clients include in their lease agreements as best-practice.
Party-Identifying Information
The lease should clearly establish who is renting from whom. You should also clarify how/when you would like your tenants to contact you (or your property management partner).
How to Terminate the Lease
Outline the requirements and process for terminating a lease in the event that this becomes necessary. Included these terms in the agreement can help avoid headaches down the road.
Property Details
Address, unit, common areas, etc.
Lease Term
Fixed term? How long is it active for?
Deposit Amount
Will you require a deposit up front, and if so, how much? How may the deposit be used by you as property owner? Will it be returned when the lease expires?
Fees & Penalties
What fees or penalties may be assessed, and how will they be applied?
Rent Amount
What will be the monthly rent amount?
Utilities Details
Will utilities be included in monthly rent payments or not?
How to Renew Lease
What is the process for renewing a lease when it expires?
Owner Access to Property
How/when will you be allowed to enter the rented property as owner? What kind of notice will be given?
Subleasing Terms
Will you allow tenants to sublet the rental property? What will happen if they do?
Rules & Policies
Outline any policies regarding smoking, pets, illegal activities, etc.
Utah Leasing Laws
It’s important to know the state leasing laws where you own rental property. As a property management company serving Utah rental property owners, we help our clients stay prepared and up to date with Utah leasing laws.
When a Tenant Breaks Their Lease
There are some situations under Utah law when a tenant can legally break a lease without penalty. Read our tips for what Utah landlords can do when a tenant breaks their lease (and how to be prepared before it happens).
Let The Utah Property Professionals Help
Over the years, our team at Joseph Thomas, working together with our attorneys, has developed key lease agreements for various property types that ensure landlords and their properties are protected.
FAQs
What is the difference between a lease agreement and a rental agreement?
The main difference between a rental agreement and a lease agreement is the length of the contract. Rental agreements are typically used for short-term rentals, usually one month at a time, while lease agreements tend to be for longer periods of time.
Can a lease agreement be changed after signing?
A lease that has been signed by both landlord and tenant is binding, and cannot be altered except through a) a written agreement signed by both parties, outlining the changes, or b) the original lease explicitly allows the lease to be changed after signing.
Do I need a lease agreement to legally rent my property?
While it is technically legal to rent property by an oral agreement, we at Joseph Thomas strongly recommend that all property owners utilize a good, legal lease agreement in order to protect themselves from problems.