They love the apartment, and the rental terms sound agreeable. 

They’re ready to move forward. 

Now it’s time to get the lease signed. 

In this article, we’re going to review the typical protocols and etiquette for the lease signing process. 

It’s not a complicated process, but it’s well worth knowing to stay organized and make sure you complete the steps properly. 

What Are Lease Agreements?

A lease agreement is a legally binding contract between a property owner and a tenant that outlines the terms and conditions of occupation of the rental property. This document is crucial as it sets the foundation for the landlord-tenant relationship and can have significant implications for both parties. Typically, a lease agreement includes key provisions such as the rent amount, lease term, security deposit, and responsibilities for maintenance and repairs.

The term of a lease agreement can vary depending on the needs of the landlord and tenant. Fixed-term leases last for a set period, typically 12 months but sometimes shorter, while month-to-month leases offer greater flexibility by allowing tenants to terminate their lease on a monthly basis with just 30 days’ notice. A rental agreement can transition to a month-to-month tenancy if the tenant continues to occupy the rental unit after the lease expiration.

Before signing any type of lease, it’s essential to thoroughly review the lease agreement to ensure it aligns with your needs and expectations. If any part of the lease is unclear, a landlord or property manager should seek advice from a lawyer. A well-drafted lease agreement helps prevent misunderstandings and disputes, providing a clear framework for both the property owner and the tenant.

Verbal Lease Agreement

Before we get into the lease signing protocols, it’s important to mention verbal lease agreements. A verbal rental agreement is legally binding if a tenant is renting property for one year or less. However, if a tenant is renting property for over a year, the oral agreement isn’t legally binding, and the terms must be put into writing to be enforceable. 

Even for oral agreements, you still have to provide the tenant with a written statement that includes: 

• Your name and contact information 

• The contact information for the person who is responsible for the rent 

• Rent payment method (i.e., cash, check, money order, or through an online payment platform) 

Even though verbal agreements can be binding, it’s always good to have written rental agreements. It’s always better to have everything in writing to save you from potential trouble later.    

Preparing for Lease Signing

Preparation is key to a smooth lease signing process. Before you sign a lease agreement, request that your new tenant undergo a thorough tenant screening and ask them to provide:

• Proof of employment and income

• Rental history and references

• Identification and credit score

• Bank account information

• Security deposit and first month’s rent

Additionally, it’s wise to conduct a walk-through inspection of the rental property with the tenant. This step helps identify any pre-existing damages or issues, which can prevent disputes when they move out. Being well-prepared ensures that the lease signing process is efficient and that both parties are fully informed about the rental property.

The Lease Signing Process

Tenants can sign a lease in person or online before moving into a new unit. In most instances, online is the preferred method because it is easy and saves time. If the tenant needs to ask questions about the lease, make sure they have your contact information and know-how to connect with you. It’s critical at this juncture to thoroughly respond to any of the tenant’s concerns.

Make sure your lease agreements are clear, in plain language and include all relevant details. Lease agreements are vital documents in the rental business. They set the terms of engagement and protect you from liability later if unfortunate events occur.

If you don’t want tenants to sign lease agreements online, you can mail the tenant the lease and have them send it back through the post office. Some landlords require the tenant to have the signature notarized. Another option is to email or text the lease to the tenant, then they print it out, sign it, and mail it back.

A key caveat is that the lease needs to be signed by anyone who will be living on the property. It also needs to be signed by you.

Security deposit and first month’s rent: When preparing for lease signing, ensure you discuss the security deposit, which is typically equivalent to one month’s rent. This deposit serves as protection for landlords against tenant damage or non-payment. Be aware of local and state laws regarding the maximum amount a landlord can require, often related to one or two months’ rent.

Signing the Lease 

The tenant should sign the lease first. This is crucial to avoid potential issues with unoccupied properties and the associated loss of rental income. The reason for this is that if you’ve already signed the lease, then you have to wait for a response from the renters. During the interim, you cannot rent the property to another applicant because the other applicant could show up with the signed original lease. This means you lose out on money while you wait. This potential scenario is why it’s vital to send an unsigned copy. You need to give yourself the flexibility to rent to someone else if the original applicant goes M.I.A.

Copies of the Lease 

Anyone who signed the lease needs a copy of the contract. Storing copies in a safe place is important. If the lease is online, the Cloud is a great place to store it. This is the most secure way to keep track of leases. Some property managers or landlords may charge the tenant to get more than one copy of the lease. 

If you use property management software, your tenant portal makes it easy to share a copy of the lease with renters at any time. 

It’s also a great idea to store copies of lease agreements for past tenants, especially until any statute of limitations expires on the tenancy.  

Lease Agreement Disputes

Disputes between landlords and tenants can arise over various issues during the lease term, such as rent payments, maintenance and repairs, and lease terminations. If a dispute occurs, it’s best to try resolving it amicably through negotiation and mediation. However, if an agreement cannot be reached, seeking advice from a lawyer or a property manager may be necessary.

Common lease agreement disputes include:

• Disagreements over rent payments and late fees

• Conflicts regarding maintenance and repairs

• Issues related to lease terminations and evictions

• Disputes over security deposits and their return

To avoid disputes, both landlords and tenants should understand their respective responsibilities:

Landlord Responsibilities:

Landlords are responsible, first and foremost, for understanding and complying with local landlord-tenant regulations. If you’re unsure about any lease terms or the lease signing process, have your contract reviewed by a licensed lawyer conversant with landlord-tenant laws in your state. Each state has different requirements about rental leases and what can be included in a lease agreement. It’s important to understand the rental lease as a binding contract between landlords and tenants.

Tenant Responsibilities:

Your tenant’s main responsibility is to pay rent on time and follow the other terms as stipulated in the lease agreement. Failure to do so can have serious consequences, including legal implications and the impact on the landlord’s ability to maintain the property.

Carefully reviewing the lease agreement together can help you and your tenants avoid these disputes and maintain a positive landlord-tenant relationship.

Conclusion 

The lease signing protocols are straightforward but very useful to know. The more detailed and upfront your process is, the smoother things will go.  

When leasing, it’s important to get everything in writing and make sure the tenant signs first. These things, along with the other details outlined in this article, will help ensure the lease signing process goes well.