If you have a rental property to rent you have to be familiar with lease agreements. These are the formal documents that establish a binding contract between two parties; the landlord and the tenant in this case. There are residential lease agreements and also commercial lease agreements.
What information can you find in a residential lease agreement?
In this type of document, the premises to be rented will be identified as an apartment, house, condo, etc. They refer to the place that will be used by the tenant. This part of the agreement, the landlord is also known as “the lessor,” and its counterpart is “the leasee,” that would be the owner or landlord the property and the tenant. In a residential agreement, there are multiple points to be considered. These points may go from the exact location and description of the house to be rented, including the apartment or unit number and to the activities that are and aren’t allowed for the tenant to do. Some agreements even regulate the participation of the tenant in the community.
What is the difference between a residential lease agreement and commercial lease agreement?
With a commercial lease agreement, the place to be rented is commercial and usually a place to run a business or for the use by a business for inventory or similar. It is usually written for offices, industrial space or retail. Although a house-type premise can also be rented for commercial purposes if the owner agrees and there is nothing in the law that forbids this action. The tenant agrees to pay a monthly amount of money in exchange for the right to use the property for commercial purposes.
If it is your first time renting your place, there are several things you have to take into account when writing a lease agreement. It is also essential that once you have your draft agreement written, you go to a lawyer for expert advise and to make the agreement legal. The lawyer can also help you review that all terms go along with what is established in the law.
- Most local jurisdictions have differences in the administration of the law. Check with a local lawyer if the terms included in your lease agreement comply with the local requirements.
- Set a clear price per square foot or for the total monthly rent. This will prevent future misunderstandings about the price of the place. Unlike residential agreements, commercial ones tend to fix their prices by the square foot.
- Establish if the tenant will pay only the monthly rent or if the tenant will have to pay other expenses. These expenses can include taxes, insurance, and maintenance. These type of charges are often referred to CAM charges or Common Area Maintenance charges.
- If you hire a real estate agent, remember they will charge a percentage of the total lease amount. This can be costly but they will usually do a background check on the tenant.
- Establish the amount of money that will cover the security deposit. It is usually the equivalent of to or one or two months of rent. In California the law has some limits for these deposits, so make sure you check with your attorney or real estate agent.
- If you need to enter the premises, it should be established in the agreement. The conditions under which you as the owner of the property have the right to enter should be clear and direct in the written document. California State law does allow the landlord to enter the rental unit for specific purposes, again check with an eviction attorney.
In addition to these key points, there are also some lease terms that you have to get familiar with. In case of a commercial eviction, there are also some points that should be taken into account.
In the tenant does not comply with the terms of the agreement, or if the lease expires, the owner has the right to ask the person to vacate the property in a specific number of days. Curable and incurable eviction notices may be sent to the tenant according to the type of violation that the tenant has commited. If it is “curable,” the tenant has an opportunity to make things right and stay in the property. When it is “incurable,” the tenant has to leave in the established number of days.
These procedures and the eviction process can cause a lot of tension between the two parties of the agreement. It is advisable to hire an eviction lawyer to deal with the issue since they will know more of the possible outcomes or answer of the tenant for you. It is very important to remember these are legal actions that should be carried out by the corresponding authorities. Under no circumstances should the property owner try to remove the tenant by himself or herself. That is called a self help eviction and it is illegal and the landlord can be fined or sued for breaking the law.