There are a lot of moving parts to owning a rental property, and one of them is utilizing legal forms and documents. For landlords, having the proper legal paperwork is not simply a formality; it’s a major aspect of having a financially secure rental real estate business. From handling an eviction to giving a tenant advance notice to enter, you’ll want to ensure you’re using the correct legal forms so all your bases are covered with local and state laws.
In this post, we’ll explore the essential legal documents every landlord should be aware of, why they matter, and where you can obtain them. With that in mind, let’s get started so you’ll be on the path to securing your property and protecting your rights as a landlord.
The Importance of Legal Forms and Documentation for Landlords
Legal documents are said to be one of the most important aspects of a rental real estate business. Why is this the case? Because they serve as documentation that clearly lays out the rules and expectations that must be followed by both the landlord and the tenant. They’re also a record-keeping tool that can be used as evidence against potential legal disputes. Without the proper legal paperwork, misunderstandings with tenants can grow into big legal battles or, worse yet, leave a landlord high and dry without evidence to support their case.
Besides protecting the obvious, such as your property or cash flow, legal forms also ensure compliance with the law, which, in turn, protects your business in general. Landlord-tenant laws can be different from state to state, as well as by city, so it’s important to know what laws pertain to your rental. In the end, whether you’re providing a rent increase notice or eviction paperwork, if the law is not followed, it can result in penalties or even a lawsuit. So, by being informed and using the correct legal forms, youa’ll be in a good position overall.
With all that said, let’s go over the most common legal forms for landlords:
1. Starting with the Basics – Lease Agreements
When people hear a phrase such as “legal documents for landlords,” they may not think of a lease agreement but instead eviction documents, and the like. However, a lease agreement is actually the first legal document that a property owner and tenant sign. The document requires the signatures of both parties, making it a legally binding contract.
Most people are familiar with what a lease contains, which is generally the rental period, the amount of rent due, due date, and any penalties for late payments. It also covers details on the security deposit, and spells out the tenant’s obligations, house rules, lease termination information, and a lot more. So, as you can see, many essential details that define the rental process between the two parties sit within this legal document.
You can view an example of a lease agreement or use eforms to create a more custom lease for your rental property.
2. Legal Documents Needed for Late Rent Payments and Evictions
If a tenant is late with their rent, depending on how things progress, a landlord will need several legal documents to address the situation. The first may be a late rent notice, which serves as a formal reminder to the tenant that rent is past due and lays out any late fees. If there’s no response, the landlord may provide a legal document called a Notice to Pay Rent or Quit, demanding that rent be paid in 3-5 days, depending on local laws. Many landlords, especially in large complexes, skip polite requests and go straight to the “pay or quit” notice.
Here’s a great example of a late rent notice, as well as a pay or quit example. You can also download a late payment notice template by state if you’d like to serve a Notice to Pay Rent or Quit to your renter.
I’d like to point out that there are certain steps you can take to make an attempt at not placing an unreliable non-paying tenant in your rental in the first place. You can learn about these steps in my article – Safeguarding Your Investment: Understanding Tenant Background Checks and Security Deposits.
Non-Payment of Rent Escalated to Eviction Status
When a tenant doesn’t respond to the Notice to Pay Rent or Quit, a landlord will typically want to figure out how to remove the tenant immediately. It’s not that simple, though, since, by law, you can’t just lock a tenant out for non-payment. Instead, the owner must escalate the process by filing a lawsuit with the local court, which requires additional documents. Each state may have a different set of legal forms that will need to be filed, but you can get an idea of what may be required below with the following examples from the state of CA:
There are four basic legal forms to fill out when starting an eviction case in CA:
- Summons: (form SUM-130)
- Complaint: (form UD-100)
- Plaintiff’s Mandatory Cover Sheet and Supplemental Allegations: (form UD-101)
- Civil Case Cover Sheet: (form CM-010)
Be sure to obtain the above forms from your local or state government website.
Also, here’s a breakdown of the eviction court process to get a general idea of how it all works if you plan on tackling this on your own. I would like to mention that, in my opinion, unless you’re an expert at the eviction process, the best path to take is to have your property manager handle a good amount of the process for you. If you don’t have a PM, then I would recommend hiring an attorney who specializes in evictions and who knows what legal forms to file on your behalf.
Evicting a Squatter
It’s also worth noting that getting assistance is a must if you’re dealing with something even more serious than figuring out how to kick out a tenant, for example, if you have a squat eviction on your hands. Squatters are difficult to remove, especially if you’re not in a landlord-friendly state. Those who are not familiar with the benefits of landlord-friendly states, learning about them and actually having rentals in states that favor the property owner, is a financially wise thing to do if your goal is to protect and increase your wealth.
Here are two articles I put together that cover the topic in detail:
- What You Need to Know About Landlord-Friendly States
- Five Most Landlord-Friendly States for Real Estate Investors
To wrap this section up, here’s a summary of eviction documents you’ll want to keep in your back pocket.
Eviction-Related Legal Documents for Non-Payment of Rent and Other Lease Violations:
- Pay-or-Quit Notice: As mentioned, this document is utilized when a tenant does not pay their rent. The notice gives the renter a certain number of days, typically 3 to 5, to pay the overdue amount of rent in full or vacate the property.
- Cure-or-Quit Notice: Legal notice provided to a renter for lease violations that are non-rent related. For instance, this may include such violations as unauthorized pets or excessive noise. It provides the renter an opportunity to rectify the issue by, for example, removing a pet within a certain timeframe or leaving.
- Unconditional Quit Notice: Issued in serious cases where, for example, illegal activity, including illegal drug use, or repeated violations are happening. This notice demands that the tenant leave immediately (within a timeframe specified by state law) without an option to fix the situation.
3. When Raising Rates Landlords Must Provide a Notice of Rent Increase
When landlords need to notify tenants that the rent is increasing, the typical legal document they use is a Notice of Rent Increase. Included in this document is the current rent, the new amount, and the start date. Variations include the month-to-month rent increase notice for flexible leases, a lease renewal agreement with a rent increase, or specialized notices in rent-controlled areas.
The notice must be delivered in such a manner that the tenant is sure to receive it. This would include hand delivery, or better yet, certified mail, so there’s a proper paper trail. Head over to an example rent increase notice, or visit this rent increase notice document creator.
Before drafting up your notice, it’s important to know what the laws in your area are. Some states limit the increase by a percentage, while others, like the state of Texas, which is landlord-friendly, allow the landlord to raise it as they see fit, as long as it’s reasonable. Also, if you have a property manager, they’ll know the allowable max rent increase that you can charge.
Regarding how much rent to charge your tenants in general, the following articles I put together can provide you with some direction:
- Three Ways to Determine How Much You Should Charge for Rent
- Maximizing Rental Income: Understanding Rent Comparables and Gross Rent Multiplier
4. Rent Receipts and Ledgers: Provides Evidence and Legal Protection
While we’re on the topic of rent payments, although rent receipts and ledgers are not considered legal documents, they can, however, be used as crucial evidence when documentation is needed.
Regarding rent receipts, as you can see from my section on late rent and evictions, issues can arise and so receipts should always be utilized. Receipts such as these benefit both landlords and tenants. For example, a rent receipt is confirmation given to a tenant that shows their payment was made, and this, in turn, is documentation they can turn to as proof in case of a dispute. For landlords, rent receipts create a paper trail that can be invaluable during tax season or if documentation is needed.
If you’re not sure how to write a rent receipt, it’s pretty simple; here’s an example rent receipt form to get an idea of what information is needed. You can also create your own to fill out a rent receipt that is more specific to your situation.
Rent Ledgers are Useful for Record-Keeping and Legal Documentation
When it comes to rent ledgers, they go hand-in-hand with rent receipts. A ledger is a detailed record of all rental payments, including dates, amounts, and any additional fees such as late charges. Ledgers can help a landlord track cash flow, spot patterns such as repeated late payments, and prepare financial statements. You can use software to create your ledger, but even a handwritten log can work just as well. Related to financial record keeping, you’ll want to bookmark this article for future reading – Decoding a Landlord Statement: What Rental Property Owners Need to Know.
Why bother with all this? Beyond the practical benefits, rent receipts and ledgers can protect you legally. To up your game, you may want to utilize a good CPA that can keep track of all these financials for you. Here’s a post I created that can help point you in the right direction – Finding the Right CPA for Real Estate Investors: What to Look For.
5. Landlords are Legally Required to Provide a Tenant with a Notice of Entry
From time to time, a landlord or their crew will need to enter an occupied rental. However, they can’t just enter the home without notifying the tenant. There’s one exception, though, most lease agreements state that in the case of an emergency, they do have the right to enter without advance notice.
A typical Notice to Enter the Premises would be needed for situations where routine inspections are scheduled, repairs are required, an owner needs to show the property to a potential buyer, perform a fire and carbon dioxide alarm check, and so on. Depending upon which state the rental sits in, a 24-48 hour notice may be required.
The Notice will provide the tenant with the date and possibly time of the intended entry, as well as the reason. Here’s a sample 24-Hour Notice to Enter legal form you can view as a reference or even print for use.
Power Resources for Investors
Before I wrap this article up, I wanted to put a few of our power resources in front of you:
- Freedom Number Cheat Sheet
- 90-Day Financial Empowerment Bootcamp
- The Financial Freedom Academy
- Morris Invest & SDIRA Programs
Also, for those who would like to start saving for a down payment or just want to diversify their funds, you can earn 7.5-9% annual returns on sums of $500 or more with real estate short notes through Connect Invest. I personally invest with them, along with most of my team members. In addition to this, you can get a $50 wallet credit when you sign up through my link. If your interest has been sparked, visit the Connect Invest website for more details.
Keep Your Real Estate Investments Safe with the Proper Legal Documents
Although the legal aspect of a real estate business is not as exciting as cash flow and equity gains, it does however, protect those elements. That said, it’s important to use the proper legal forms and documents when dealing with tenants. I’ve learned from past experience that in doing so, it can save you from future hassles and expensive legal battles.
I realize that many landlords don’t want to deal with the legality of it all, and that’s ok, just as long as they have someone else handling it for them, like a property manager or attorney. Related to this, you may find this article helpful when it comes to the topic of PMs – Mastering Rental Property Management: Late Fees, Rent Increases, and Lease Terminations.
Morris invest provides new construction rental properties with an experienced property manager assigned. The PMs we work with are well-versed in legal documents intended for landlords. Because of this, they are able to take care of all the paperwork and hassle for the property owner.
If you’d like to learn more about our built-to-rent properties or how our full-service investment company can help place you on the path to financial independence, simply schedule a call with our team.
In the meantime, dive into the following video I put together – Real Estate Investing Risks and How to Avoid Them:
