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Do I Need A Written Lease If I Am Renting Out My Property?
Congratulations! You just got a new job promotion at work and they will be paying for your relocation. The fact they are covering relocation means that you can keep your Lancaster home as an investment property. You are on your way to becoming a profit earning landlord. You tell your friend about your exciting news and, to your surprise, he has a friend that is looking for a place. While you do not know this prospective tenant, your friend vouches for him and says the fit would be great. You texted back and forth with Mr. Tenant and he has agreed to pay reasonable rent and everything seems to be falling right into place.
Stop right there! You are about to make a fatal mistake of property investment. Renting a property without a signed lease can create significant issues if things go sideways. This post will explain the main benefits of having a written lease with every tenant, no matter the relationship.
A Written Lease Protects The Landlord
In Pennsylvania, a lease is the governing document in a dispute. That means the lease will protect the landlord and the tenant as it will establish clear responsibilities for each party and the Court will follow whatever agreement was made in writing. While helpful for both parties, it is particularly useful for a landlord who leased their property to a bad tenant.
For example, the lease can set the length of the lease term. Without a lease, there would not be a clear end date and the landlord would have a hard time evicting a tenant who keeps paying the agreed-upon monthly rent.
Roommates, Pets, Behavior
A lease can also control the behavior of the tenant. The landlord can set the number of roommates that the tenant may have, or at least require the tenant to request the landlord’s permission before getting a roommate, prohibit pets at the property, prohibit smoking, or discourage disorderly conduct. These restrictions can be particularly useful, for instance, when the tenant gets a new girlfriend with a long reputation of dealing drugs or having police involvement. Without a lease, it will be very difficult to evict the girlfriend or the tenant (who is paying rent) for being associated with the wrong crowd or doing things that do not rise to the level of a crime, but you do not want on your property.
Legal Fees & Process
Similarly, a lease can require that a tenant be responsible for the landlord’s attorney’s fees spent to evict the tenant. Generally, in the U.S., each party pays their own legal fees but a lease term allowing recovery of those costs would replace that rule. The eviction process can be very costly. Many times the tenant is already not paying rent, so the landlord does not want to get stuck with the legal fees to get them out as well.
Finally, the written lease ensures that the eviction can be completed at the small claims court level. The process at the small claims court level is cheaper, faster, and easier. Without a lease, the landlord may be stuck going to the Court of Common Pleas level which could add years and considerable expense to the eviction process.
The last thing you want is to worry about your rental property after you have relocated. A thorough written lease will help eliminate some of those gaps and pain points. If there are any problems, the standard lease will likely have an answer to that question or issue. Our attorneys assist property investors in making sure they have all the documentation they need before leasing and helping to draft leases.