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The Most Common Rental Agreement Mistakes Landlords Make

Renter Signing an Effective Property Management Lease Agreement with Scottsdale Property Manager

Having a universal lease agreement you use with every tenant sure makes things a lot easier.  This is especially true if you self-manage your rental property and already have a lot on your plate.  Plus, if you’re in a rush to fill a vacancy, it can be tempting to print out a lease agreement template and fill in the blanks.

But you might not realize the importance of an individualized lease until you face an angry tenant in court.  And by then, it might be too late for you to fix things.

If you want to avoid overspending, wasting time, and dealing with disputes, customize your lease agreements.  Even if that means hiring a Scottsdale property management company to help you out.

In addition, read on to learn about the most common mistakes landlords make when creating rental agreements.  This way you’ll know your leases are airtight and protect both you and your tenants.

Top Lease Agreement Mistakes Landlords Make

1. Not Personalizing Things

With a lease agreement template, it’s likely it will address you as the “landlord” and your tenants as “tenants.”  But if you fail to personalize the rental agreement with actual names, it comes across as unprofessional.  It also makes this legal document a little less valid.  After all, your tenants can always claim that the agreement doesn’t apply to them since their names are nowhere to be found.

Though this argument probably won’t hold up in court, it’s a waste of time and money to even get to that point.

Here are some of the best ways to personalize your lease agreements and make sure there is no confusion:

  • Include full names (no shortened or nicknames) at the beginning and end of the document
  • Add the tenant’s name throughout the document in place of the word “tenant”
  • Include a cover letter addressed to the tenant with important information
  • Create a welcome package with the tenant’s name on it that accompanies the lease agreement

Lastly, you or your Scottsdale property management company should speak directly with the tenant a few times before the lease signing to establish a relationship.

2. Ignoring the Law

Just because you’re in charge of your rental property doesn’t mean you can put any provision you want in the lease agreement.  There are laws that you must understand and follow when it comes to lease drafting.  And ignorance will not be an excuse should you violate any laws.

Scottsdale Property Managers Ensuring Real Estate Legal Compliance

Here are some of the Arizona lease agreement regulations to be aware of:

  • You must disclose things like the purpose of any non-refundable fees
  • You must identify anyone acting on behalf of you (g., your Scottsdale property manager)
  • There are security deposit collection and return limits
  • Leases don’t automatically renew, they convert to month-to-month if there is no renewal
  • There are rules about entering the property (non-emergency)
  • Lease agreements must include the full name and address of landlord and length of lease term
  • And many more

If you don’t feel comfortable dealing with landlord-tenant laws, hire a Scottsdale property management company.  They’ll be knowledgeable and experienced enough to draft a legally compliant rental agreement that you never have to worry about.

3. Setting the Wrong Rent Rate

The amount of rent you charge tenants plays an important role in the lease agreement.  For instance, you’ll need to set the monthly rent amount and outline late rent consequences.

But your tenants are ready to sign the rental agreement and already know the rent rate, so what’s the big deal?

The problem with not researching rent rates before setting it and adding it to the lease is twofold:

  • If you underprice your rental, you’ll lose out on money
  • If you overprice your rental, your tenants will find somewhere else to live at the end of their term for cheaper, and you’ll have a vacancy on your hands

You want to make sure the rent you’re charging is both competitive and appealing.  And the best way to do this is to have an expert property manager help you set a competitive rent rate.  They’ll have insight into the current housing market, similar properties and their rates, and the demographics of the area so you get the best rent rate possible.

Get a Free Rental Analysis from us and see what your rental property should be leasing for right now.  We can help you generate positive cashflow and attract high-quality tenants more than willing to pay what you’re asking.

4. Failing to Designate a Lease Term

Every lease agreement should have a start and end date.  This way tenants are never confused about their move-in or move-out dates.

Scottsdale Property Managers Drafting and Signing the Lease Agreement

Also, you should avoid the following mistakes while drafting your lease agreements:

  • Automatic Lease Renewals. You don’t know if your tenants will want to renew their lease with you at the end of their tenancy.  Forcing an automatic renewal can get messy.  Plus, you’ll want the chance to reevaluate some provisions, such as the rent rate, when offering a lease renewal to good tenants.
  • Month-to-Month Renewals. If you allow a month-to-month lease renewal term, your tenants can provide a 30 days’ notice to leave, which leaves you little time to find new tenants.
  • No Notice of Intent to Leave/Renew. The more time you can give your tenants to decide to renew with you or not, the better. This way, should they decide to leave at the end of their tenancy, you have plenty of time (g., 60 days) to market your property and find new tenants.  And if they decide to stay, you have time to draft a lease renewal.

The above-mentioned mistakes are some of the most common that landlords make.  However, there are some other lesser-known mistakes you should avoid as well:

  • Not discussing the lease agreement in full with tenants and setting clear expectations
  • Failing to address late rent procedures
  • Forgetting to add provisions related to smoking, painting, pets, and behavior
  • Not including the maintenance and repair procedures
  • Not requiring renter’s insurance

Final Thoughts

Drafting a lease agreement that covers everything you want it to, is acceptable to your tenants, and is legally compliant can be challenging.  But the rental agreements you and your tenants sign are the foundations of every tenancy.  Because of that, avoiding common mistakes not only makes things less stressful, it helps you boost your ROI and lease renewals.

Scottsdale Property Manager Handing a Professional Rental Lease for New Tenants to Sign

If you’re in need of Scottsdale property management and want help creating an airtight lease agreement, contact us at Brewer & Stratton Property Management.  We can help outline the provisions that are important to you, so you don’t have to.  Plus, we’ll explain the lease in full to your tenants and continue to manage your rental once they have moved in.

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Designated Broker: Christopher Goodman
Designated Broker:
Christopher Goodman