Property Management Agreement (image: c-rem.com)
If you are renting a Los Gtos home? Do you know if you have a valid and binding agreement that can survive a court challenge?
A valid California rental lease agreement must contain certain clauses. In fact, leaving out one such as a Mediation clause, can expose you to huge litigation costs in courts. But creating a valid rental lease agreement is just one reason you should hire a Property Management company to market your home.
So here are the elements of a valid rental lease agreement:
1) Valid Lease must be signed: A legal and biding lease agreement must be signed by ALL parties including Broker, Tenant and Owner. If you have more than 1 tenant on the rental agreement, they ALL must sign the agreement for it to be valid and binding. Any roommates who are staying in the property also have to sign the agreement.
2) Define Lease Area: A valid California 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.
3) Lease Terms: A valid lease agreement should include the start and end of the term. Typical lease agreements are for 1 year, but there are standard contracts for month-month which we recommend using in California.
4) Payment Terms: The lease agreement needs outline the payment requirements including the security deposit. This section will also define penalties for late payments along with the ramification of missed payments which could be eviction.
5) Utility Costs: The terms of a valid lease should identify what utilities are included in the rent and which are excluded. This could mean that shared utilities have to be metered and invoiced separately which is a tough challenge in some old units.
7) Right of Entry: A valid California lease includes terms under which the landlord can enter the rental unit to handle any emergencies such as electrical or flooding. This clause can also include routine inspections as well.
8) Sublease: This clause will define if the tenants have the option to sub-lease the home to another occupant which we strongly discourage since it exposes the owners to unnecessary risk.
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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