The lease agreement you sign with your tenants is an important part of protecting your Houston rental property and your own financial security. Mistakes are easy to make, particularly because landlords often use lease templates that don’t cover all the Texas laws and requirements. Or, they don’t think they need anything more than a signed document outlining the length of the tenancy and the amount of rent that’s due.
Your lease agreement needs to be detailed and legally compliant. Make sure you use a lease agreement that has been drafted by an attorney or a property manager in Texas. You want your lease to be enforceable.
As you’re determining what you need to include, consider these 10 terms which are absolutely crucial for every lease agreement.
1. Names and Contact Information for Owner, Tenants, and Property Managers
Your lease will first have to identify who is renting the property out and who the tenants and occupants are. There should be a full name and contact information associated with every tenant 18 years of age or older. Children should be listed as occupants as well. The landlord’s name and address or the information associated with their property manager should also be included.
2. Property Description and Address
The lease should reference what type of property is being rented, where it’s located, and what’s included, such as appliances or outbuildings. Note whether there’s parking provided and if you have a multi-family building, include language that covers how common areas are to be used and maintained.
3. Lease Terms
Most fixed-term leases are for a period of one year or more. The start and end dates should be spelled out in the lease. Provide instructions about what happens at the end of the lease term, specifically whether it switches to a month-to-month agreement or if a lease renewal must be signed in order for the tenants to stay in place.
4. Rent Collection Policy
Every good lease agreement will be explicit about rent. You must include how much rent is due, when it’s due, how it should be paid, and whether there’s a grace period. The lease must state whether there are late fees and what the other consequences might be, up to and including eviction, for late or unpaid rent.
5. Security Deposit and Move-Out Procedures
Include information on the security deposit and any other deposits or fees that were paid. Provide specific instructions on what tenants will have to do at the end of the lease term to receive a full refund of their security deposit.
6. Address Utilities
The lease needs to identify who is responsible for utilities. If any are provided, such as water and sewer, state that. Otherwise, reference the tenant’s responsibility to establish and keep up with all utility accounts.
7. Reporting Repairs and Maintenance
A clear explanation of how maintenance should be handled will eliminate any confusion with your tenants about what they’re expected to be doing and what they can expect you to take care of. Your lease should explain how to report maintenance and what constitutes an emergency. You should also be clear that residents will be expected to pay for any damage they or their guests cause.
8. Inspection Notices and Right to Entry
If you’re planning to inspect the property during the tenancy, outline that in the lease. Be sure to establish the amount of notice tenants are entitled to before you enter the property.
9. Pet Policy
Your lease will need to reflect whether pets are allowed and if so, what kind of pets are permitted and what the tenant’s responsibilities are for pet fees, pet rent, and pet behaviors.
10. Rules and Requirements
The lease should also include a list of rules and regulations. Tenants need specific instructions about what is permitted and what is not permitted while they’re living on your property. Make sure to reference in your lease agreement:
- Smoking policy.
- Prohibition against criminal activity.
- Circumstances under which a landlord can enter the property.
- Policy on rental increases.
- How long guests can stay overnight.
If your rental property is in an HOA, you’ll want to make sure your tenants understand those rules and regulations. You can include them as an addendum to the lease.
While you are putting together a lease agreement for your Houston rental property, we’d be happy to help. Contact us at OmniKey Realty. We work with rental property owners in Houston, Dallas, San Antonio, and surrounding areas in Dallas County, Collin County, and Houston County.