All You Need To Know About A Rental Agreement
Defining a rental agreement - A rental agreement is a binding contract between a lesser and lessee also known as landlord and tenant, providing for temporary tenancy of property. These agreements are often referred to as periodic or month-to-month agreements.
Difference between lease and rental agreement - Its absolutely essential to understand the difference between a rental and lease agreement. Mainly because of two very important differences which exist between lease and rental agreements. Firstly, in terms of leases, rent as well as terms of conditions of agreement are only subject to change when the agreement ends, while rental agreement rent increases as well as changes to terms and conditions are allowed on short notice. Secondly, lease agreement tenancy cannot be ended before term expiry, except in case of non-payment of rent or term violation, whereas rental agreement tenancy may be ended at any time during the agreement or by giving required days written notice.
Components of Lease Agreement - Major components of a lease agreement include and are not limited to names of tenants including first and last name of all tenants who will occupy premises, lease term, payment details including amount, payment form and date, in case of check- who beneficiary is and penalties in case of late payment, deposits and its usage as security for unpaid accounts or property damage, detailed responsibilities including repairs, inspections and snow removal or garbage disposal, access to premises and statement in terms of property usage as residence for tenants mentioned in agreement only. The components of your lease agreement should be altered and changed to suit your individual needs and requirements. All rules and obligations you want tenants to abide by should be stated in full detail. Its imperative to consult with local ordinance modify forms available at to http://www.lectlaw.com/forms/f091.htm or http://www.allbusiness.com/legal/contracts-agreements-forms-real-estate/2069-1.html to include specific information and do alterations accordingly.
Tip on tenant inheriting - Have you recently invested in or inherited property? Then its very likely that you inherited tenants under existing lease or rental agreements. Its imperative to request all documentation related to tenants and property including agreements, deposit particulars, rules etc.
Put pen to paper! - The number one rule to successful renting and leasing of property is to put pen to paper. Put your agreement in writing no matter the tenancy duration. You are sure to find tenants who claim you made all kinds of oral promises which you didn't keep. Tenants may also conveniently forget about key agreement issues such as deposit payment, usage and repayment or subletting. Oral agreements may be easy and informal but really dangerous especially when disputes arise in terms of rental agreement duration, with the potential of ending up in court.
Stipulate shared utilities - In case of shared utilities such as gas and electricity, you should remember to stipulate this in the rental agreement.
Liquidated Damages - Some agreements include a liquidated damages clause, providing for payment of a predetermined amount to landlord, should tenants decide to move before expiry of agreement. The liquidated damages amount should match actual damages suffered by landlords, or else it will be illegal.
Watch out for rent control ordinance - Rent control ordinance limits your rights to alter or even terminate terms and conditions of tenancy as stipulated in your rental agreement. In addition the ordinance may require landlord to provide good reason or reasons for terminating the agreement.