A rental agreement is a legal document defining the relationship between a landlord and his or her tenant. It outlines practical yet significant aspects of the tenancy, such as the duration, rent amount, number of occupants, as well as the responsibilities of each party.
While most US states have adopted The ULTRA (Uniform Residential Landlord & Tenant Act), which aims to clarify, modernize and standardize Tenants’ and Landlords’ rights and responsibilities, Nevada is yet to. Thus, it is necessary for a Nevada landlord to have in place a comprehensive rental agreement to safeguard the property owner, the property, and the occupants. If you are a rental property owner in Nevada and aren’t working with a professional property manager, the following are the very essential elements your lease agreement ought to address.
Parties to the Agreement
The Rental Agreement, of course, is between you the landlord and the tenant. Nonetheless, it should clarify who is who. As such the contract should mention the full legal names of each part as well as the capacity in which they enter into the contract as.
The Property Under Consideration
In the agreement, you should mention the property that you as the landlord wish to rent out to the tenant. Clearly indicate the location, street, floor, and size and details of the asset under consideration.
Duration of the Rental Agreement
Typically, the lease agreement period for most rental properties in Nevada is one year. The duration, however, can vary to include semi-annually, quarterly, monthly or even weekly. Whatever the lease term, you should clearly indicate the date on which the contract commences as well as the date and time on which it ends. Furthermore, you should specify what action should follow once the lease agreement expires. The likely options include;
- The tenant moving out and you repossess the property
- You and the tenant agreeing to a lease extension by executing a new Nevada lease contract
- You freely receive new rent from the tenant leading to the creation of a month-to-month tenancy agreement.
Rental property is an investment from which you hope to gain continuous rental income. As such, the contract should adequately address all matters of the rent. It should state in no uncertain terms the precise sum of money the tenant needs to pay as rental income, the date on which the payment is due, and how to pay. Will it be through bank deposits, money orders, cash or cashier check payments?
Late Rent Payment
Spell out the consequences of late or delinquent rent, and bounced checks. For instance, the tenant should foot all penalty charges that apply. Traditionally, the due date for monthly rent payments is on the first of every month. However, in instances where the contract’s commencement date does not fall on the 1st day of the calendar month, you can use a prorated rate approach where the rent becomes due after thirty-day intervals.
If you intend to raise the rent after a given period, include that information on the contract. The NRS (Nevada Revised Statutes) requires you give the tenant at least forty-five days’ notice. However, if the lease term is less than a month, say of weekly or fortnight cycles, a 15-day notice will suffice.
Do not omit from the agreement how much the Security deposit is. Bear in mind that the Nevada Landlord and Tenant laws prohibit a property owner from taking more than three month’s rent as Security deposit. Besides a lower security deposit makes your property affordable and appealing to prospects.
Security Deposit Refund
Since the deposit serves to safeguard you against damages or costs incurred by the tenant, make it clear that the tenant will receive the full deposit refund only in the absence of such costs or charges. Otherwise, you will deduct the total cost of the charges from the security deposit, before refunding the security deposit. Make sure to mention what those costs are, for example, unpaid rent, late rent payment fees, property damage repairs, unpaid utility bills, and so on.
It should mention by name in the rental agreement exactly who will occupy the property and for what purpose. That includes the legal names of the tenant, their immediate family members, and pets. If you wish, you can add the names of transient relatives and friends likely to reside on the premises. If you do not want animals in the property, let it be known.
Similarly, if it is a household property, make it clear that it is exclusive for family dwelling and not for conducting any illegal activity or running a professional business or trade. However, if the occupant wishes to do any legal business, he or she should obtain written consent from you. Once the tenant assumes ownership of the unit, he or she should refrain from assigning or subletting the lease to a third party unless of course, you the landlord consent in writing to the subletting or assignment.
The Physical Condition of the Property
Evidently, you expended resources to make the property marketable and habitable. It is therefore only logical for the rental agreement to commit the tenant to keeping the property in the same striking state. The agreement should provide for the resident to examine and verify that house is indeed in a safe and hygienic tenantable condition.
Care and Maintenance
The contract should clarify that it is the sole responsibility of the occupant to ensure the property stays in perfect shape. That involves handling the utility bills, keeping the premises clean and safe from hazardous materials as well as ensuring peaceful coexistence with neighbors. Also, mention what action the tenant ought to take in the event the property gets damaged and needs improvement, alteration or repairs. For instance, the occupant should not conduct any such activity without written consent from you. Similarly, if you have a preferred repair contractor, let it be clear on the agreement that he or she is the only one to handle the repairs.
Right of Access to the Property
Many of the Nevada Homeowners associations recognize the landlord’s right to enter the premises at any reasonable time without giving the tenant a prior notice, as long as the lease is active. Mention that in the agreement. Some of the reasons justifying such entries include inspecting the condition of the property, making repairs, serving the client with notice, seizing property upon default, or showing the property to potentially new tenants, money lenders, insurance agents or inspectors.
Termination of Contract
While every landlord wishes for the client to stay until the end of the lease period, unfortunate instances can compel either the landlord or the tenant to terminate the agreement. Elucidate through the rental agreement the conditions under which either party can end the lease, how to go about it and what will be the cost of the premature ending of the contract.
For the contract to be enforceable in law, both you and your tenant must consent to it. Make provision for the tenant to demonstrate that he or she read and understood the terms and conditions of the legally binding contract and that he or she entered the agreement on free will devoid of coercion.