A rental agreement between a landlord and a tenant may be one of the most important documents in their business relationship. Such a document would signify that the partnership is able to engage both parties legally, in which they enjoy some rights and are under certain liabilities.
We understand that legal paperwork can be daunting. That is why we have created this comprehensive guide to rental contracts to ensure you cover all the essentials and avoid common pitfalls.
Why is a Rental Agreement Important?
While every contract may vary, certain critical components must always be present.
- Property Address/Premise: Clearly state the property’s location, including the apartment or suite number before renting or buying a property, in the case of multifamily units.
- Agreement to Lease: State that the landlord is leasing the premises to the tenant subject to the terms and conditions contained in the document.
- Period of Lease: Specify the number of months or years that constitute the period of the lease and state the start and end dates.
- Rent Details: State the amount of rent payable every month, formatted, dated, payment detail, the cost of delay, and the date of the first payment.
- Usage of the Premises: Say how the tenant is allowed to use the property. For a residential tenancy, a provision to the effect, “The premises will be occupied only by the tenant and their immediate family for residential purposes” would be.
- Security Deposit: Specify the amount that is usually equivalent to one month’s rent and the circumstances by which it will be returned. State the period of refund or deductions over damages.
- Utilities: Make clear which utilities the tenant is to pay for and those that are covered in the rent.
- Repairs and Maintenance: Specify who pays for any repairs and maintenance. Be precise to prevent disputes later.
- Pet Policy: Clearly outline the pet policy and what is excluded, such as size, breed, or type.
- Community Rules: Include any particular rules that a tenant needs to abide by, such as lawn maintenance, parking regulations, or quiet hours.
- Property Alterations: Outline if there are modifications that can be made by a tenant, whether they need to get permission or not.
- Fair Housing Compliance: A statement that indicates compliance with the Fair Housing Act to avoid allegations of discrimination.
What happens after signing a rental agreement?
After the rental agreement, landlords should collect supporting documents to mitigate potential risks.
- Income Proof: Request the most recent pay stubs or tax documents, such as W2 forms, to prove the tenant has the ability to pay rent.
- Rental History: Consult with previous landlords to understand the tenant’s rental behavior and reliability.
- Background Check: Ensure a detailed background check is possible to ensure that no unsavory criminal or financial history exists.
- Property Inspection Checklist: Complete an inspection checklist with the tenant before moving in to document the property’s condition and avoid disputes over damages.
What are the Red Flags in a Lease Agreement?
Avoid these common pitfalls when drafting your rental agreement and have a successful landlord-tenant relationship.
- Using Generic Templates: Free online templates might not be in compliance with your local laws. Invest in a legally sound template from a reputable source, such as com, or consult a local real estate attorney.
- Discriminatory Language: Avoid language that could possibly be construed to be discriminatory; do not inquire about family status or age.
- Overpromising: Ensure that all commitments made in the lease, such as maintenance schedules or included amenities, are realistic and achievable.
- Privacy Violations: Define clear guidelines regarding landlord access to the property, including advance notice requirements, to respect tenant privacy and comply with legal obligations.
What is the Intent to Rent a Contract?
An Intent to Rent Contract is also known as a Letter of Intent to Lease, and it indicates a serious intention on the part of a tenant to rent a house. This letter is an informal agreement between the potential tenant and the landlord concerning the terms that the parties expect to be in the final rental agreement.
Conclusion
A well-crafted rental agreement forms the base for a sound and smooth landlord-tenant relationship along with legal protection. Ensure your contract complies with local laws at all times either through consulting a professional or purchasing it from a trustworthy website. This makes reading an essential part before actually signing to prevent any misinterpreted misunderstandings leading to some severe legal issues.