lease contracts - clauses

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From: Dee Mee


Just wondering what do people put in the additional conditions of their lease agreement with tennants say for a 12mth fixed lease in order to minimise costs????

eg - tennant pays for all water usage - in SA if this is not agreed to, the default is that the landlord pays the first 136kilolitres or so,
2. a repair levy of say $50, this would help cover all those little things that add up eg fixing taps, calling plumber, encourage them to fix it themselves for small things - i assume this is legally ok, landlord is meant to keep property in repair but does not say who has to pay for it
3. a liability clause, that if say husband runs off the wife is still liable for everything,
4. tenants pay for professional cleaning on leaving
5. tenants pay for pest inspection on leaving
6. a clause saying guests only allowed for 1wk
7. late fee for payment in late of say $50/day
8. 1mth prior to end of lease, right to show prospective tenants with 24hrs notice
etc.......
are tenants detracted by all this.
i think all this could really maximise return
 
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Reply: 1
From: Gail H


Hi

Well, I rented for many years, and there's no way in the world I would consider signing a lease with clauses like that in it. There's always another rental property to check out.

Gail
 
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Reply: 1.1
From: Manny B


Howdy,

I agree with you Gail, you can't be that harsh in your conditions (ie. $50 a day for overdue payments is quite steep), as you will lose your prospective tenants to the competition... I would just use the standards lease agreements (what the agent would normally use)...

Cheers,

Manny.
 
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Reply: 1.2
From: PT Bear


Consider what you're doing from the tenants point of view. Asking them to sign a lease like this will only attract the most desperate of tenants. It makes them think the landlord is an ogre.

Specifically adding these types of clauses will mean it takes longer to rent your property, with a higher turnover. This costs you in advertising, lost rent and letting fees.

It also won't attract the best tenants. A recent post of the forum outlined the need to treat good rental agents well - the same goes for good tenants.

A person with a good rental history usually has no problem finding a property. Having rented for many years, with several agents happy to rent to me again, I know I can find a new home within 48 hours if I have to - I don't have to take this treatment from a landlord. This will leave you to choose for a pool of average to bad tenants.

You need to consider the long term verses the sort term gain that a restrictive agreement will get you. If you charge a $50 levy for maintenance, you won't find out about problems until after they're gone - this may end up costing you more in the long run. You're better off increasing the rent by $5 a week to cover maintenance.

These sorts of clauses only add up to small change in the long term. Some of your clauses may even be implied by the law already - Separately metered water is charged to the tenant in VIC.

Some clauses (pest inspection) would be acceptable if the tenant has specific requirements (such as pets). Again, some of these things can be factored into the cost (a pet can be worth an extra $20/wk). Figure out which will make you more in the long run.

PT_Bear
 
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Reply: 1.2.1
From: Ayesha Todd


I suggest you contact the REI or Dept of Fair Trading in your state and ask for a landlords pack, it will give you an idea as what is reasonable to spiculate and what is not. I am currently doing the property management course in NSW and there are controls as to what is reasonable to request in a lease agreement.
Also remember each state has different conditions allowable, for example in WA you can charge an extra $100 pet bond, & the tenants pay the leasing costs. In NSW or Tassie, there isn't the pet bond, though I think it would be a great idea (and yes I am a pet owner, hopefully soon looking for a rental, and I would be willing to pay extra bond for my dog. Though on the other foot I am also a landlord in Tassie and WA and wish they had the pet bond in Tassie.
 
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Reply: 1.2.1.1
From: Dee Mee


ok good to see the responses
i just placed these ideas to see what others thought
apart from the $50 repair fee and the late fee - i agree these are not good, - saw it in some book,
are the other clauses reasonable
 
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Reply: 1.2.1.1.1
From: Mark Laszczuk


As a renter, I would only accept the last clause, that's the only one that is reasonable. If you try to put any of the others in, you will be left with a vacant property. No offence Dee, but in my opinion, the pest inspection clause was really over the top. Why should tenants pay for a pest inspection? Also, how do you plan screening how long guests have stayed? Do you intend visiting the house every night? Expect a call from the Tenants Union if you do. Look, if you want the best tenants, you need to treat them well. From the looks of those clauses, you're one of those nightmare landlords that people tell stories about. So you need to ask yourself: Do I want to be labelled the 'nightmare landlord' or do I want to have a good relationship with my tenants? It's really up to you. If you feel that strongly, maybe you'd be better off with a professional property manager, someone that knows what's up and knows how to deal with tenants and keep them onside.

Mark
'no hat, some cattle'
 
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Reply: 1.2.1.1.1.1
From: Dee Mee


no no, i have none of these clauses in these leases. Ive just seen these ideas placed in previous posts or in books ive read and wondered how people would react. Now i know!!
thanks
 
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Reply: 1.2.1.1.1.1.1
From: PT Bear


Dee,

The professional cleaning clause is not uncommon in Victoria, but it takes the form of 'The tenant will have the carpet steam cleaned upon vacating the premises and shall provide the receipt as evidence'.

This sort of cleaning usually costs less than $100.

PT_Bear
 
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Reply: 1.2.1.1.1.1.1.1
From: James Doherty


With a lease contract like that i would happily apply for one of your properties.
When the tap leaks i will happily try to fix it, until i slip over in the wet mess i have made, do my back then sue your ass off.
James D
 
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Reply: 1.2.1.1.1.1.1.1.1
From: Rick Otton


which state were you thinking about as clauses vary in each state as legislation varies in each state
 
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Reply: 1.2.1.1.2
From: Sim' Hampel


Dee... have you looked in detail at the full version of the standard REISA Rental Tanancy Agreement ? It is pretty comprehensive.

As for liability clauses, you just make sure that all individuals who will be tenants are listed on the contract, so that they are then held jointly and severally liable to the terms and conditions. This is especially important when you have students sharing accomodation !

The standard agreeement even states:

"3.2.15 (the tenant must not without prior written consent of the Landlord) :- allow any person other than the intended occupants notified to the landlord prior to the commencement of this Agreement to remain on the Premises for more than fourteen (14) days"

It also covers allowing you to bring prospective tenants through the property within 28 days of the end of the tanancy and so on, so this is all pretty standard stuff which I would suggest there is little need to change.

Our property manager also adds the following clause:
"should fleas be discovered within a reasonable time of your vacating the premesis, a professional pest exterminator will be engaged and the account will be billed to you"

However, I do agree with some of the other comments that things like a "repair levy" or similar will possibly scare tenants away. Unless you have a property that people just have to rent no matter what, I would suggest don't make it more difficult than your competition will !


 
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