A condominium lease agreement is between its owner (“landlord”) and a person seeking to rent the condominium (“tenant”). Unlike most standard leases, in a condominium lease agreement, the tenant must abide by the landlord-tenant laws in the State in addition to the condo association’s rules.
Renal Application – To screen a tenant by using the information provided in the form to look up their credit profile and criminal history.
A condominium, or ‘condo’, is a residential dwelling located in an association that is governed by its bylaws. Every association is unique in its governing practices and is encouraged to understand its rules and procedures before purchasing or leasing a condominium.
Unless explicitly written in the lease, the tenant is NOT responsible for the payment of any association fees or dues.
Utilities / Services
If the tenant is obligated to pay utilities or services they must pay EVEN IF it’s a separate charge by the condominium association.
A condominium is considered a residence and the landlord will be obligated to provide the required disclosures in accordance with State law.
- Lead-Based Paint – Federal law requiring the landlord to provide this disclosure if the structure was built prior to January 1, 1978.
Co-ops (“housing cooperatives) and condos (“condominiums”) are two types of property that are often confused with one another. While both types of property exist within a larger building, they contain many notable differences.
Where the two differ the most lies in how they are owned. When a person wants to live in a co-op, they have to purchase shares of the corporation that owns the building. The co-op will often dictate the minimum number of shares that must be purchased in order to be allowed to live in a unit. The more shares that are purchased, the larger the unit that can be lived in. All shareholders split the cost of upkeep, repairs, taxes, and more.
When a person purchases a condo, they physically own the interior of a certain unit within the entire building. The process is more comparable to purchasing a home (without worrying about the exterior of the property). When the purchase is finalized, the new owner will receive a deed to the unit.
Unlike condominiums, co-ops don’t let anyone purchase a unit. If a person wishes to buy shares in a co-op they have to go before board members, who will conduct interviews on the potential buyer. The interviews are used to identify if the buyer would be a good fit for the community and if they would be able to afford their portion of the taxes, repairs, and maintenance on the building. Co-ops are very focused on building a community, meaning they want to ensure the buyer will follow all rules and “get along” with other shareholders.
Ease of renting
Because co-ops are so focused on the community, they often restrict residents from being able to rent out their units. In order to rent out a resident’s space, they’d need to gain approval from the board. Even if permitted, they’d most likely have to conform to stringent requirements. Although the condominium association can enforce rules regarding renting, it’s rarely as involved as co-ops, in part due to their being no board overseeing residents.
Co-ops are typically cheaper than condos by the square foot.1 However, if a person is looking to finance shares in a co-op, obtaining financing is typically far more difficult due to the shareholder board limiting who the shares can be sold to. As far as monthly fees go, they are typically cheaper in a condo.
This is a six (6) step guide on how to properly rent a condominium.
- Step 1 – Prepare the Property
- Step 2 – Gather Property + Association Information
- Step 3 – List the Condo
- Step 4 – Screen + Approve Applicants
- Step 5 – Create & Sign the Lease
- Step 6 – Collect Rent & Monitor Expenses
The landlord should prepare the property for lease by making sure it’s in its best condition. This may require calling professionals and hiring a cleaning company to conduct a “deep-clean” of the premises. This involves moving the furniture and scrubbing each nook and cranny of the space (Use Thumbtack to find local cleaners).
In addition, the following should be cleaned or checked:
- Any air vents, heaters, or air conditioner filters;
- Fire alarm batteries;
- Carbon Monoxide batteries; and
- Fire escape plans.
The landlord should gather all property information to provide as many details to the tenant as possible. At a minimum, this should include:
- Square footage (SF);
- Number (#) of bedrooms;
- Number (#) of bathrooms;
- Furnishings provided;
- Appliances provided; and
- Any other areas that are accessible by the tenant.
In addition to gathering the property information, the landlord should obtain a copy of the association’s bylaws for any prospective tenant to read prior to move-in. For example, there could be association rules about pets being a certain weight limit that the tenant should be made aware of.
With the information collected in step 2, the owner should create a listing for their condominium online. There are several platforms to choose from, and owners can decide to list on however many as they see fit. It’s arguably more important for the landlord to complete one (1) high-quality, detail-rich ad than several low-quality ads. A few popular options include Zillow, Facebook, Craigslist, and Apartments.com.
Any renters that show serious interest in signing a lease for the condo should be required to complete a rental application. Once the tenant completes the form, the landlord will go through it and look for anything that would suggest the tenant could be problematic. They should also conduct a background check to look for previous evictions, criminal history, credit issues, and more. The average background check will cost around $20. Popular background check providers include Experian, SmartMove, and RentPrep. Calling on the references the tenant listed in the application is also recommended. Landlords cannot deny a tenant for anything protected by the Federal Fair Housing Act, which includes anything relating to the applicant’s race, disability, color, national origin, religion, familial status, or sex.
Once a tenant has been approved, a lease will need to be downloaded and completed (Download: PDF, Word, or ODT). Complete all required fields and edit any fields to ensure the agreement is in-line with the condo association’s rules. With the tenant, go over the entire agreement and the document and information as listed in step 2. The agreement will then need to be signed (or eSigned) by the landlord and tenant(s). Guests of the tenant do not need to sign the lease. The owner should then:
- Collect the first (1st) month’s rent;
- Collect the security deposit;
- Provide the tenant with the keys;
- Have the condo’s office create any parking and/or entry passes; and
- Let the tenant move-in.
The landlord will need to collect rent on a monthly basis until the lease terminates. Additionally, they should monitor all expenses related to the condo, as these can be deducted later on. The owner should be reachable in the event the tenant(s) need to have something repaired or another issue. Upon the termination of the agreement, the owner should go through the entire unit with a checklist to look for damage. So long the tenant paid their rent on-time and in-full and left the rental damage-free (apart from standard wear and tear), the owner should return the full security deposit to the tenant(s).
How to Write
Step 1 – Party Names
Start by entering the full date in which the agreement will be becoming effective. Then, enter the names and mailing addresses of the landlord (owner) and tenant(s).
Step 2 – Condo Info
For the condominium, the owner will need to enter its street address, city, state, and unit number (#). The condominium association’s name should be written in the last field.
Step 3 – Length of the Agreement
Known as the “term”, this section is used for specifying how long the contract will be binding for. Start by entering the beginning date of the lease. Then, check the first box if the lease will have a fixed-term, and enter the date in which the lease will terminate. If the landlord wishes to make the agreement a periodic lease (no end-date), the second box should be checked.
Step 4 – Rent Payments
Enter the total amount ($) of rent the tenant will be required to pay for the lease term. If the agreement is month-to-month, the field can be left blank. On the next line, enter the amount ($) of rent the tenant will pay per month followed by the method in which they should go about paying for it. Finally, enter the day of the month in which the rent is due.
Step 5 – Security Deposit
It is recommended that the landlord requires the tenant to pay an upfront security deposit. The landlord will need to enter the amount ($) of the deposit followed by the number of days in which the landlord has to return the deposit after the termination of the contract. State landlord-tenant laws should be consulted for the maximum deposit that can be made and the timeframe landlords are required to abide by for returning deposits.
Step 6 – Parking
Enter the number of parking spaces the tenant(s) can use during the lease. If the landlord intends to charge the tenant for the space(s), enter the fee in the second field. If no fee will be charged, the field can be left blank, or “$0” can be entered.
Step 7 – Occupants
If there will be other occupants of the rental that aren’t included in the lease, the name(s) of these people should be written in the spaces provided. Then, enter the maximum number of people that could potentially stay on a certain night in the condo.
Step 8 – Utilities
In a condo, it’s standard for the landlord to pay for water, sewer, and heat and let the tenant pay for the remaining utilities. However, the landlord can decide to break up the utilities any way they wish. All utilities that will be paid for by the tenant should have a checkmark beside them. Any appliances included in the condo should also be listed (refrigerator, microwave, washer/dryer, etc.).
Step 9 – Pets
There are three (3) options the owner can select regarding a tenant’s pet(s). If any and all pets are allowed in the rental for a certain fee, check the first box and enter the amount ($) of the additional monthly fee. If the landlord wants to restrict the tenant to a certain type of pet (such as a small dog), describe the type of pet and enter the amount of additional fee. Finally, if the tenant is prohibited from having a pet in the condominium, the third box should be checked.
Step 10 – Sale of Premises
Enter the number of days the tenant will be given in the event of a sale of the condominium. The common length of time is sixty (60) days, although state law should be referenced to ensure the tenant is given a fair amount of time to prepare for their next place of stay.
Step 11 – State Law
Enter the name of the state in which the condominium is located.
Step 12 – Signing
The form has to be signed by the landlord and the tenant(s). Both parties will need to:
- Write their printed names;
- Write their signatures (with eSign or by hand); and
- Date their signatures.
Once this step has been completed, a copy should be given to either party. Once the landlord receives the tenant’s security deposit, first months’ rent, and any other fees, the landlord should permit the tenant to move into the property.