The Orlando real estate market can be a rewarding investment opportunity if you manage to get the right tenants and have a lease agreement that works in your favor. The challenge, however, is that the city and state have many regulations and laws that govern landlord and tenant relations. The violation of these regulations and laws can lead to hefty fines or even possible civil or criminal litigation. It is, therefore, prudent for all Orlando landlords to ensure that he or she has a well drafted rental lease agreement that covers the following essential elements.
1) Parties to the agreement
The first and perhaps one of the most important aspects of the rental agreement are the parties (or landlord and the tenant bound by the agreement). Here, make sure to include the full legal names as well as addresses of all the tenants and the landlord. If possible, you should include their registration details such as Driver’s License, Passport or Social Security number.
2) The Property under consideration
Details should be clear of the property you are leasing out to a tenant. As such the agreement should describe the physical location, address, street, and the unit number of the property being leased. Accurate descriptions prevent any confusion or future misunderstandings that could lead to litigation.
3) Term or duration of the lease contract
You need to precisely define, the date when the rental agreement commences and when it ends. Tenancy agreements can be annual, quarterly, monthly or even weekly as is the case in vacation units however for long term rentals in Orlando, as of the date of this article the minimum term is 7 months. Furthermore, you should detail the requirements that both you and your tenant should take at the expiration of the lease. For instance, should the tenant vacate the premises immediately, will there be room for extension, or are you willing to accept new rent under a month-to-month tenancy arrangement? As well as clarifying the term of the lease, the rental agreement protects the landlord in the event the tenant defaults, decides to abandon the lease or terminate the lease agreement early.
4) The Rental Amount
The rental income is the reason you have invested in the property in the first place. Therefore, take the time to make sure the lease contains these details. For starters, state the exact rent amount you will charge on the property. You also need to indicate the date when the rent becomes due, as well as how and where the tenant should pay their rent a that is due. For instance, do they pay using check, money orders or cash? Moreover, you should define what happens in the event of delinquent rent, prorated rent, and returned checks. For example, will late payment attract fines or penalties?
5) Security deposit
As a landlord, you need to shield yourself and property from any unforeseen expenses and losses such as unpaid utility bills, unpaid rent or even damage to the property. A sure way to do this is to request the tenant to pay a security deposit. You may ask whatever amount you wish for, however it is recommended to be reasonable as guided by state statutes The agreement should define the dollar amount of the security deposit, and specific wording to meet the requirements of the Florida statues pertaining to landlord and tenant laws.
6) Condition of the Premises
It is critical that both you and the tenant document the state of your Orlando property before the tenant moves in. The main reason for this is that you have adequate documentation of the condition of your investment property prior to the tenant taking possession and to document of how you would like it left when they leave. You could create a checklist to document the condition of your property or even take photos of the premises. Furthermore, you should clarify in the lease what happens in the event there is damage to the property.
7) Right to Inspection
A landlord has the freedom to inspect your Orlando property to ensure that it is being maintained and kept in proper condition. For this reason, indicate in the Orlando lease agreement that you will need to examine the property from time to time. It is best to refer to Florida landlord and tenant laws regarding proper noticing requirements prior to inspecting your property. This will save you getting yourself into trouble.
8) Property Maintenance and Repairs
The law states a landlord must maintain the property in a habitable condition. It places the role of preserving and improving the dwelling squarely on the property owner. It does not, however, mean that the tenant does not hold any responsibility for the property. To avoid miscommunication or future conflicts, clarify in the lease agreement the duties and responsibilities of each party in as far as property maintenance and repairs are concerned. For instance, the tenant should be responsible for keeping the property cleaning and repairing any damage they or their guests cause, while the landlord can be responsible for the routine property maintenance of the systems and structure of the building.
9) Occupants in the property
It is not unusual to find tenants utilizing the property in a way that you as the landlord do not like. For instance, a resident could host more people than you would want, have pets that you do not approve of, run a business from the home or even conduct illegal activities in the property. If you want to avoid these types of situations, take the time to indicate how many people you wish to live in the property, what kind of pets you will allow, as well as the kind of activities that can take place.
10) Lease Termination
While it the desire of any landlord to have a long term relationship with their tenants, at times it just doesn’t happen. Things might occur during the contract period which might compel either party to want to end the relationship. It is, therefore, prudent if the contract agreement provides a guideline of what conditions can warrant a lease agreement termination, how either party can terminate the relationship, and what steps one must take in such a case. It is equally important to indicate how much notice one should give to end the contract.
Although the above items are not all-inclusive, they are some of the main concerns to addressing your Orlando lease agreement. A well drafted lease agreement can save you from future complications. If you own a rental property in Orlando and are looking for guidance in managing your investment feel free to contact us today and we’d be glad to assist you!