Discover why we are the only choice for Property Management

Property Management Blog

The Problem With Online Generic Rental Agreements

PMI Legacy - Tuesday, June 2, 2020

If you’re ready to invest in rental properties, you aren’t alone. Individual investors are the largest group of owners in the residential housing market. They represent 74.4% of the owners for 16.7 million rental properties! 

Before any of these investors can begin making money, they need one thing, a lease. For many, they’ll head online and download one of the thousands of available online rental agreements. 

This is a big and potentially expensive mistake. Keep reading to learn about all of the problems that happen when you download a generic online lease agreement.

Unenforceable

You may find that the terms you’ve agreed to in the lease are unenforceable. This typically happens because each state has its own landlord/tenant laws, and generic leases don’t account for each state’s specifics. Some terms go so far as to render the entire lease void. 

An example of this type of clause would be a term that accelerates the rent payments if the tenant defaults or breaches the agreement in some way. 

Illegal

You could unknowingly make things even worse for yourself. Instead of a term not being enforceable, it could go so far as to be illegal. Now you face a lawsuit from the tenant and potential fines or other punishments from the court or local and state government. 

If your lease has the tenant waiving their right to privacy or eliminates your habitability responsibility, then you have a lease that directly violates basic tenant rights law.

Imposes Greater Duties

Sometimes the generic lease goes in the opposite direction and imposes extra duties on you as the landlord. Why would you want to agree to more responsibilities than you’re legally required to? The greater duty could end up costing you more to perform, which you’ll be required to do to stay in compliance with your own lease. 

Compare the terms of the lease to your state and local laws. Reduce any terms or requirements that are more stringent or demanding than necessary. 

A common one you’ll see is a clause that requires the landlord to return the security deposit within ten days. No state requires this. Here in Utah, a landlord has 30 days after the tenant moves or within 15 days of receiving the tenant’s forwarding address. 

Lacking Key Terms  

If you download your generic lease from a reputable source, then they typically take the kitchen sink approach, and you find yourself removing more than adding. Unfortunately, not everyone on the internet is reputable, and this leaves room for you to download a lease from a questionable source. 

These leases will lack vital terms. Your lease should contain these basics: 

  • Identify all of the parties involved in the agreement 
  • Identify the exact property rented 
  • Length of the rental term 
  • Rent amount and the due date 
  • Security deposit terms 
  • Landlord responsibilities 
  • Tenant responsibilities 
  • Landlord and tenant signatures 

The Terms Don’t Make Sense

If you’re managing your rental property yourself, then generic online rental agreements are a good place to start. But you need to eliminate the terms that just don’t make any sense. These may be perfectly legal and enforceable terms, but they don’t relate to your property. 

Why include a clause about BBQ grills on the balcony if your rental home doesn’t have a balcony? Why include a whole section about allowed pets if you’ve already specifically stated that pets aren’t allowed? 

Have the Right Lease for Your Property

Working with a local Utah property manager will ensure you have an enforceable lease that complies with local landlord/tenant law. Experienced property managers have an intimate knowledge of Utah landlord/tenant law and can help you draft a solid lease. 

Contact our office today and let us help you create the ideal lease for your property. 


Tags