Home Rental Legal Items You Should Understand Before Renting Your Home
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What Home Rental Legal Items Should I Learn Before I Rent My Home?
There are many terms that can make the language of home rentals a bit confusing to the newcomer. If you've decided to rent your property, you'll need to understand a few major and many minor legal and working phrase definitions. Here are a few to get you started:
- Screening a prospective tenant. The Fair Credit Reporting Act (1970) regulates the handling of information regarding everyone's credit activity. As a landlord, you are permitted to obtain credit information on an applicant to help you make a good rental decision.
- Lease agreement. You probably realize you need a good lease agreement to properly administer home rentals. But do you know what should be in it? There are standard lease form agreements that may basically cover you and your tenant. At other times, you may need to add certain paragraphs to address other issues about conditions of tenancy. Consult your attorney to ensure you have a good agreement.
- Security deposit. The amount usually equals at least one month's full rent and is held in escrow by the landlord. Make sure that the language in a security deposit agreement or the paragraph in your lease agreement specifies that this deposit is NOT your tenant's last month's rent, even though the amount may be a perfect match. These funds are to be used if you (the landlord) need to make repairs for actions of your tenants. Typically, when your current tenants are about to move, you can “walk through” the property together and agree on what, if any, repairs (and use of their security deposit) are necessary.
- Eviction procedures. Sure, we hate to talk about the possibility of eviction, but, as a landlord, you should be aware of the local procedures that must be followed should you ever need to take this action. Procedures can differ widely from state to state. Rules and regulations are normally made by individual states, sometimes cities and towns, and, at times, there is little consistency. Learn the procedures in your area.
There are some other legally related terms and phrases which you will absorb as you get further into the adventure of renting your property. A word of caution: Don't try to become a legal expert. Consult with a qualified attorney about any but the simplest legal issues you face when you rent your property.