A lease is a contract of two parties, the lessee (user) and the lessor (owner), to use a property, building, and another common asset like vehicles and industrial or business types of equipment. It consists of necessary details of the property, such as the duration of the property’s occupancy and the amount of rent.
It also explains how the tenant will benefit from home or living, how they take care of the property, and how it will influence soundness in the neighborhood.
There must be no changes in the lease. However, if there are changes, they should be put down into writing, and both parties should sign the draft that contains the changes.
The lease must also contain simple words and meaning that commonly use in our daily living. Avoid any cliche words and terms, and it must be clear and concise. The lease must be easily readable.
Here are some subjects that should cover a lease.
- Tenants and occupant’s name. It is a form of assurance for the landlord to oblige all adult occupants to be official tenants. The tenant is rightfully accountable for paying the amount of rent. They are also responsible for obeying the term or agreement of lease.
- Term of lease. It is a length of time that covers the lease. It includes the start date and the expiration date of the lease. It must also contain the length of tenancy.
- Rental amount. It is essential to spell out the rental amount, the available payment method, and, most significantly, the due date. The late fee should also be specified the amount and grace period.
- Rental property description. It specifies the property’s address, including the unit number and building. It would help if you also took into consideration particular storage areas and assigned parking slots. And in some instances, include areas that are not allowed to access.
- Security deposits. It is essential to avoid any disputes between tenants and landlords. According to state security deposit law, it should be concisely specified about the amount of security deposit—the use and not use of a security deposit like, for example, to cover unpaid rent or repair expenses. And the process of returning the deposit and account for deductions after moving out. It also specified the nonrefundable fees like cleaning and pets.
- Repair and maintenance. You should also include a repair and maintenance policy. Specify tenant’s duty to maintain and clean the property’s premises and pay for any damage they might cause. It must include a process of repair requests and how to report complaints. There should also be a limitation on tenant’s alteration like painting without prior approval in writing.
- Right of entry to rental property (landlord). To avoid violating the tenant’s right to privacy, you must set a proper rule of your right to enter the rental property. There must be a list of rules that specify a different situation, such as making repairs or showing a unit to a potential tenant.
- Rules and policies. Some landlords include standard rules on their lease, like the prohibition of illegal activities such as drug dealing and drug use. Others have smoking and pets.
- Allowed number of occupants. Ensure that the lease includes individuals who signed the lease authorized to live in the property together with their minor children. This will restrict tenants from moving their relatives and friends without permission. It also serves as a ground for termination if violated by the tenant.
- Local laws required disclosures. Some states might require you to disclose certain information in your lease. For instance, about the lead-based paint, rent control laws, anti-discrimination laws, and health and safety codes, you must include it in your lease.
After finishing the lease, you might have to check the required documents that tenants must-have. Below is the list of documents needed in New York City when leasing a property:
- JOB LETTER. These are the essential documents that a potential tenant should have. The potential tenant must have the ability to pay the rent on time.
- PAYSTUBS. This confirms the potential tenant’s earnings and how they afford to pay the rent on time. Most of the time, they must present two most recent pay stubs. What if they are self-employed? They must submit a CPA letter that includes all the information about the nature of the business and how long the company is running.
- BANK STATEMENTS. They can show their bank statement that is also one assurance that they can pay the rent. Usually, the landlords are looking for tenants that have an annual income 40 times the monthly rent.
- PROOF OF IDENTIFICATION. The potential tenants must present valid identification to prove their identity. A driver’s license, passport, or green card can confirm their identity and legally live on the rental property. A non-U.S. citizen must bring other documents such as 1040-NR, non-resident income tax return.
- BANK CHECK. It is required to have an amount equal to four month’s rent in a bank with an NYC branch. The four-month amount is accountable for covering the first month’s rent, security, and a broker fee, plus applicable fees.
- PAST ADDRESSES AND RECOMMENDATIONS. If the potential tenant can give out at least three references of past landlords, they are qualified for the applications. While giving out recommendations that they are good tenants will be much better and might save you from calling out the previous landlords.
- VEHICLE REGISTRATION AND PROOF OF INSURANCE. This will help the landlords to know the slots that they must be allotted for the potential tenant.
- SOCIAL SECURITY NUMBER. These documents will be used to conduct credit and background checks to help decide whether the potential tenant is suitable. As a property owner, you must protect the property and other tenants from scammers and criminals.
- FEDERAL TAX RETURN. It is to measure the gross wealth of the potential tenant. They must possess an adjusted gross income that is equal to 40 times the monthly rent.
New York City is labeled as a renter’s city because most residents are renters rather than owners. You can see all lease and rental property types and the landlords and property owners who profit from these residential properties.
Landlords and property owners always assure that there is no danger in future deals. That is why they are very strict with the subjects that cover the lease and the required documents that the potential tenants must-have.