How to do a proper lease signing

How to do a proper lease signing

 

Lease Signing

Lease Signing

The lease – the agreement between the landlord and the tenant.

The lease is a legally binding contract.

I have a friend in the industry that gave me some advice.  Think of the lease agreement as a loan.  If the rent is $1000 for a 12 month lease, think of it as a loan for $12000.  What kind of paperwork and security would you want for a $12000 loan.

The lease needs to be taken seriously, however, whenever we consult on tenant issues, the first thing I ask for is the current lease.  What I find amazing is how many people do not have a current lease, or unsigned or incorrectly filled out.

I have also seen some poorly written custom leases.  In Nova Scotia you are able to write your own lease, however, if you write into your lease items that are not covered under residential tenancy guidelines, then those items will not be considered at a tenancy hearing.

Items such as, in Nova Scotia you can only collect a damage deposit of no more than the equivalent on one half months rent.  you can write in a custom lease, one full months rent damage deposit required, however, if the tenant complains, you will have to give half of the money back.

The lease should only be signed when all of the tenant screening is completed.

The lease should be signed in person (whenever possible).

Here is our lease signing process (based on Nova Scotia guidelines, other provinces and states may very)

go to the access Nova Scotia website

They have a standard lease form you can fill out on the website.

Make sure to fill out one copy for you and one copy for each person who will be signing the lease.

Then highlight the areas you want the tenant(s) to sign and initial.  We get them to initial a few areas, such as the tenant responsibilities section, amount of rent / when it is due what is included in the rent and also proof they received a copy of the lease and a copy of the residential tenancy guide.

Never assume anything.  Communication at the lease signing is crucial.  Go over the lease with your tenant (customer) line by line.

We have had questions that we may think are common sense.  Do not assume.

For example: when is the rent due?  We always assume it is due on the first of the month, but if someone is signing their first lease, they might not know (we have been asked this question).

I have a friend who is in the student housing business, he rents rooms “all inclusive” one Saturday night he had a call from one of his tenants to ask for more toilet paper.  When he explained that he does not provide toilet paper, his tenant responded by saying, ” I thought I was renting an all inclusive room”.  The moral of this story is to be clear when it comes to what is, and is not included in the lease.

Another important section is the notice to quit.

You need to be clear about when the lease is going to end, or what the options are to end it.

In our province we have four types of leases:

weekly, monthly, yearly and fixed-term.

We start each tenancy with a six month fixed term lease.  The fixed term lease has a specific end.  You do not have to renew the lease.  That allows us and the tenant to decide if we are the right fit for each other.  If either party wants to part ways at the end of six months, we can do that.  It is important to note, that if you do nothing but keep collecting rent after six months, it becomes a month to month lease.

When you sign a lease in many places, you need to provide a copy of the residential tenancy guide.  In Nova Scotia if you do not provide one within ten days of the lease signing, your new tenant can void the lease and walk away.  We always provide a copy at the time of lease signing.

collecting the damage deposit – We never consider an apartment rented until we have a signed lease with the damage deposit in hand.  If it is close to the time the tenant is moving in, make sure to get cash or an email money transfer for the damage deposit.  We have not had any damage deposit cheques bounce, but have heard of it happening.

I would like to conclude by saying, make sure you take having a properly signed lease seriously.  It is critical in having a great tenant / landlord relationship.

Michael P Currie

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