According to Point2Homes, rental units make up 53% of Memphis housing. And with each of those comes a lease agreement that often needs to be amended.
Do you need to make changes to your rental agreement but aren’t sure how to go about it? Whether it’s adjusting rent or adding new tenants, incorporating an addendum to lease agreement is a practical way to update the terms without rewriting the entire contract.
Let’s look into how to create and implement an addendum, ensuring clarity between tenants and landlords.
What is an Addendum to Lease Agreement?
An addendum to a lease agreement is a separate document that allows landlords and tenants to make changes to the original lease without creating a new contract. It’s a useful tool when adjustments are needed, but the overall agreement remains the same. Instead of rewriting the entire lease, an addendum outlines specific changes or additions.
There are three common reasons why an addendum might be used:
- Adjustments to rental terms
- Clarifying rules or policies
- Adding or removing tenants
Adjustments to Rental Terms
Sometimes, landlords and tenants need to make changes to the rent amount or payment schedule. An addendum allows these changes to be made clearly and legally, ensuring that both parties agree to the new terms.
Clarifying Rules or Policies
New property rules, such as allowing pets or changing maintenance responsibilities, can be introduced using an addendum. It provides clarity without altering the entire lease.
Adding or Removing Tenants
If a tenant moves out or a new one moves in, an addendum helps record this change. It keeps the rental contract updated while keeping the core agreement intact.
Common Reasons for Lease Addendums
Landlords and tenants often need to adjust certain aspects of their lease agreements as circumstances change. Instead of writing a new contract, an addendum to a lease agreement allows them to make these changes easily.
There are three main reasons landlords and tenants might use a lease addendum:
- Rent adjustments
- Changes to rules or policies
- Adding or removing occupants
Rent Adjustments
One common reason for an addendum is to modify the rent amount. It could happen when both parties agree on a rent increase or decrease. Instead of going through the hassle of signing a new lease, the rent change can be clearly outlined in an addendum, keeping the rest of the agreement intact.
Changes to Rules or Policies
Another reason for using an addendum is when there’s a need to update specific rules or policies. For instance, if a landlord decides to allow pets or change the policy around lawn care or snow removal, an addendum can document these changes. It helps ensure that everyone is on the same page while leaving the rest of the contract unchanged.
Adding or Removing Occupants
Over time, the people living in a rental unit may change. Whether adding a new roommate or removing one, an addendum is a practical way to update the list of tenants without redoing the entire lease. it ensures that both parties are aware of who is responsible under the lease.
Legal Considerations Before Creating an Addendum
Before drafting an addendum to a lease agreement, it’s important to consider the legal requirements involved. An addendum must comply with the law and the original lease to avoid disputes later. There are three key areas to focus on:
- Compliance with local laws
- Reviewing the original lease terms
- Ensuring mutual agreement between parties
Compliance with Local Laws
First, it’s essential to ensure that the addendum adheres to local housing laws and regulations. Each state and city has its own rules regarding landlord-tenant agreements, and any changes made in an addendum must comply with these regulations. Failure to follow local laws could make the addendum unenforceable or lead to legal issues.
Reviewing the Original Lease Terms
It’s also necessary to review the original lease before drafting the addendum. Some leases have specific clauses that limit or restrict the types of lease modifications that can be made.
Make sure that the proposed changes align with what’s allowed in the lease and don’t contradict the original terms. This helps avoid any legal conflicts down the line.
Ensuring Mutual Agreement Between Parties
Lastly, both the landlord and tenant must agree on the changes outlined in the addendum. The mutual agreement ensures that the addendum is legally binding.
Without agreement from both sides, the addendum will not hold up in court if disputes arise. It’s always a good idea to have the addendum signed and dated by both parties to confirm their consent.
Lease Amendment Process
Before drafting any changes, it’s necessary to look over the original lease. It’ll help you understand what terms are already in place and whether certain modifications are allowed.
Some leases have restrictions on what can be altered, so it’s always a good idea to double-check. Reviewing the lease also ensures that you won’t contradict any existing terms, which could lead to legal complications.
Define the New Terms
Next, clearly define what changes need to be made. Whether it’s adjusting rent, changing maintenance responsibilities, or updating rules about pets, the new terms should be specific and easy to understand. Vague language can lead to confusion and disputes later, so it’s essential that both parties know exactly what the new terms entail.
Get Both Parties’ Agreement
For an addendum to be valid, both the landlord and the tenant must agree to the new terms. It means discussing the changes, answering any questions, and reaching a mutual understanding.
If either party has concerns, address them before moving forward. Once everyone is on the same page, you can proceed with signing the document.
Rental Contract Adjustments
Incorporating an addendum to lease agreement allows landlords and tenants to make necessary changes without altering the entire contract.
Since our founding in Memphis in 2002, Reedy & Company has grown into one of the top property management firms in the area, managing over 3,500 properties for local and international investors. With our extensive expertise, we offer tailored advice to help clients make informed property decisions while balancing the needs of both tenants and owners.
Get in touch today to find out how we can help with your lease process!
