What does a rental agreement cost? If you have a house or apartment that you want to rent out to a tenant, this is a question you may have. Let’s explore this question and review some general information about rental agreements and why they are important.
How Much Does a Rental Agreement Cost?
A rental agreement is a legally binding contract between a landlord who owns a property and a tenant who wants to rent and use the property.
Rental agreements can either be for residential rentals, where a tenant rents the property for living, or commercial real estate rental, where the property is used for business purposes.
A rental lease agreement varies based on the type of rental and the needs of the landlord and the tenant. The cost of rent, duration of the lease, and special provisions can all be negotiated and easily customized within a rental agreement.
Landlords are generally responsible for drafting and providing the rental lease to the tenant. Many landlords choose to hire a real estate attorney to draft or review this important contract.
Rental agreements protect the landlord and the tenant and are essential to creating a successful relationship between the two parties and avoiding disputes.
Based on ContractsCounsel’s marketplace data, the average cost of a project involving a rental agreement is $571.00.
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What’s Included in a Rental Agreement?
The terms and conditions in a rental agreement heavily depend on the type of property and the purpose for which the property will be used.
A commercial lease agreement for a business will differ significantly from a residential lease agreement for an apartment. However, even though these leases will be different, a basic lease should include the following provisions:
- Party information. The names and addresses of the landlord and the tenant. The business name should be included if the rental is for a business.
- Property description. The building address, square footage, amenities, and features are available to the renter.
- Duration of the agreement. The duration is the length of the renter's access to the property and whether the renter has the option to renew the agreement at the end of the rental period. For example, residential rental agreements are six-month and one-year agreements. Commercial rentals tend to be longer, like three-year agreements.
- Rental price and deposits. The monthly rental rate is the agreed-upon amount the tenant must pay the landlord each month. Many landlords also require tenants to sign a security deposit agreement. For example, suppose the tenant leaves the property free from damage. In that case, the security deposit is returned at the end of the rental period.
- Late fee. Many landlords charge a late fee if the tenant doesn’t pay rent on time per the rental agreement.
- Utilities. The rental agreement needs to cover which party is responsible for paying utilities like water, electricity, internet, and cable. Some landlords include utilities with the base rental rate, while others expect the tenant to pay their utility bills.
- Pet policy. Include whether pets are allowed at the rental and, if so, what type and how many. If no pets are allowed, the rental agreement should clearly state that.
- Landlord access to the property. There will be situations that the landlord will need access to the property to provide maintenance or repairs. The rental agreement should show how much notice the landlord must give the tenant before entering the property.
- Signatures. Rental agreements must be signed by both parties to be legally binding.
Rental agreements should be as detailed as possible to avoid disputes or misunderstandings. The best way to ensure that your rental agreement covers all necessary terms and conditions is to hire a lawyer to draft or review the agreement.
Examples of Rental Agreement Projects
Rental Agreement Drafting Services
It is highly recommended that landlords hire a real estate lawyer to draft their rental agreement. A lawyer will ensure that the agreement is free from mistakes that could open a landlord to legal and financial risk.
An experienced real estate attorney will know which clauses must be included to protect the landlord’s interests and avoid civil disputes.
Hiring a lawyer for drafting services will usually begin with a consult. Next, the lawyer will meet with the landlord to learn about the property type and what the landlord wants to include in the rental agreement. Then the lawyer will draft a contract that the landlord can use with their tenant.
Rental Agreement Review Services
It is common for the landlord to draft and provide a rental agreement when renting their property to a tenant. However, it is important to remember that contracts often favor the drafter, so a tenant may want to hire their attorney to review the rental agreement before signing.
An attorney who provides review services will ensure that the agreement is fair, the tenant’s interests are protected, and the tenant understands all provisions included in the contract.
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Rental Agreement Drafting Cost
Rental agreement costs can vary based on the document’s length, complexity, and how many custom terms need to be included in the contract.
ContractsCounsel’s marketplace data shows that the average rental agreement drafting costs are $698.17 across all states.
Rental Agreement Review Cost
If a tenant hires a lawyer to review a rental agreement, they will incur legal fees. In addition, the lawyer will charge for their time and legal knowledge reviewing the contract and meeting with their client.
ContractsCounsel’s marketplace data shows that the average rental agreement review costs are $316.67 across all states.
How Do Lawyers Charge for Rental Agreements?
Hourly Rates for Rental Agreements
An hourly rate structure is the most common fee structure used by real estate attorneys. Using this fee agreement, the lawyer will provide a client with their hourly rate and begin working on the legal project if the client approves.
At the end of the job, the lawyer will bill the client for the number of hours spent working on the case.
The marketplace data for ContractsCounsel shows that the average hourly rate for a real estate lawyer ranges from $150 - $300 per hour.
Flat Fee Rates for Rental Agreements
When a client hires an attorney for a specific purpose, like drafting a rental agreement, the lawyer may choose to use a flat fee rate instead of an hourly rate. To come up with a flat fee rate, an attorney will typically estimate the time it takes to complete a project and then applies their hourly rate.
While clients tend to prefer a flat rate because they know the cost of their legal fees up front, lawyers can sometimes run into trouble. For example, a lawyer may not be compensated for their time if a task takes longer than anticipated.
ContractsCounsel's marketplace data shows that the average flat fee rate for a rental lease agreement is $571.00.
Get Help with a Rental Agreement
Do you need help with a rental agreement project? If so, post a project in ContractsCounsel’s marketplace to receive flat fee bids from real estate lawyers to handle your project. All lawyers on the ContractsCounsel’s platform are vetted by our team to make sure you are provided with top tier service.
