Property Management Agreement (image: c-rem.com)
If you are renting San Jose properties, how can you tell if you have valid and binding lease agreements to that will survive if challenged in court!?
There are certain clauses in a lease agreement that will constitute a valid lease agreement. Leaving just one of them out exposes you to challenges from your tenants if they know how to exploit your over right.
Perhaps this is another reason you could hire a Property Management company to help develop these agreements since without them your tenants could easily create Migraine Headaches that would be very hard to cure. So, what topics and elements have to be included in a valid lease agreement. These elements are:
1) Fully Executed: A legal lease has to be signed by both parties which includes ALL the tenants who will occupy the property and the landlord or the property manager who is acting on behalf of the landlord. Any roommates who are staying in the property also have to sign the agreement.
2) Defined Leased Space: Lease agreement should include the property address and the amenities included in the lease. For instance, if you are leasing a detached Studio on your property, the contract should have your home address, but clearly identify that only the studio is the leased space. If there are areas that are off limits to the tenants, they should all be documented. Without such definition in the contract, the tenant could claim that they were entities to rent the entire house and not just the Studio.
3) Terms of the Lease: A valid lease should include the start and end of the term. Typical lease agreement are 1 year, but there are standard contracts for month-month as well which we recommend using in California.
4) Payment Details: The lease agreement should outline the payment requirements including the security deposit. The agreement should also document the penalties for late payments along with the ramification of missed payments which could be eviction.
5) Payment Terms: The lease should identify when and where the payment needs to be made. You can offer your tenants the option to drop off the payment at your office or mail it. This clause also identifies penalties for late payment.
6) Utility Costs: The terms of the lease should identify what utilities are included and what are excluded. This clause should also identify if the tenant has to establish direct service with the utility companies or if the costs would be shared.
7) Right of Entry: A valid California lease include terms and conditions under which the landlord can enter the rental unit to handle any emergencies such as electrical or water damage. This clause can also include routine inspections that property manager or the landlord can require from the tenant.
8) Terms of Use: This clause in the contract will define how many people are supposed to occupy the property. This is also the clause where you can restrict any attempts to sub-lease your property.
9) Renewal Terms: A lease should include the renewal terms under which the contract would be extended for another term. You can also include a rent acceleration as part of the renewal terms.
As you can see negotiating a lease for your San Jose property is not a trivial matter and the legal language included in all these sections of the contract can create unnecessary risk for landlords. That’s why we are convinced that hiring a property manager for your San Jose home is worth the extra pay.
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