In the late 1920s, President Coolidge invited some friends to dine with him at the White House.
Not wanting to make fools of themselves and unsure of the proper etiquette for dining in such a setting, the friends decided to simply copy exactly what the President did at the table. The meal was served and the President took a bite, as did his friends. The President then took a drink, as did his friends. Then, the President poured some milk into a saucer, followed by some sugar. The friends did likewise with their own saucer. Then the President picked up the saucer, leaned over, and placed it on the floor… for the cat. (Source: The Speaker’s Quote Book)
As the President’s friends in the above story illustrate, sometimes imitation can be helpful in an unknown setting, but oftentimes it can make the imitator look like a fool! This is the case when a person simply copies another lease they picked up to use for their investments. Perhaps you’ll be fine, but should the case arise where you need to use the lease for a big legal situation, the wrong lease could also cost you a lot of money.
Related: 5 Legitimate Reasons to Allow a Tenant to Break Their Lease
Why the RIGHT Lease Matters
A common mistake made by many new landlords is to go online and simply Google “Free Rental Lease” and see what comes up. Typically, they’ll print off whatever pops up and try to use it for their rental.
The problem with this, of course, should be obvious: you have no idea if that lease you found is legal and valid. A lease drawn up by a lawyer in one state might be totally different than a lease drawn up in another. Every state, and even many cities, have specific laws that govern what is and is not legal in a rental agreement. Plus, the laws change all the time, so a lease that worked last year might not work this year.
Sure, if you never have a problem with your tenant, that lease you found on Google might be fine, but we don’t use lease agreements to prepare for the good times, we use lease agreements to prepare for the bad!
What happens when you try to evict your tenant and you realize the lease has a provision that is not allowed in your state that delays or messes up the eviction process? What if your tenant tries to sue you because something in that lease was not legal in your state or city? These are real possibilities if you are using a boilerplate lease.
So where should you look for a good, legal rental lease agreement? Here are a few places…
How to Find a Lease Agreement
The following are 3 places you can find a lease agreement.
(Click to read on BiggerPockets…)