Considering renting out your home, or searching for a rental property? The rental agreement you pursue, in either scenario, will turn out to be the X factor in determining the success of the landlord-tenant relationship – with its legal basis grounded in both contract and property law.
A fair rental contract is imperative for both landlords and renters to protect their interests and to minimise the risk of potential lawsuits. In case of any untoward situation, the parties concerned can always refer back to the arrangements dictated in their legally enforceable contracts.
Here are the essential item that should be included in every rental agreement:
· Joint or individual tenancy agreement
Join tenancy involves renting out the whole property to prospective tenants. Under this agreement, all the tenants become equally responsible for the deposits. If one person decides to leave, the remaining group has to find a replacement, or cover his/her share of the rent. Similarly, if one tenant violates the terms of agreement, the rest are liable to make up for the defaults.
Landlords may prefer to hold everyone jointly responsible since it can, in some ways, make their task of resolving issues easier. On the other hand, if the contract is relatively short-term and you are dealing with students or group of bachelors living together, it can mean consistent headache of making time to agree to new terms every time a tenant among the group decides to leave.
Tenants, if they are a family or couples anyway, shouldn’t have much problem with either option. However, you will probably prefer to have individual agreement, and be individually responsible if you are living with a group. It will save you time and trouble as in the case of landlord above.
In any of these cases, it is critical that you are clear about kind of agreement is taking place – discuss it between each other and then clearly state it in the agreement.
· Period of tenancy
Landlords opting for short-term contracts should mention the duration in the rental agreement. Similarly, even if you are not sure when you may want your home back, be sure to include the stipulation about the notice period before the termination of agreement. Not only will this allow you to terminate the agreement at the appropriate time, it will also protect you from tenants who may want to quickly up and leave your home – cutting your source of income.
These stipulations will help a tenant equally, it will allow you to be sure that you will have a particular home for a specific period, so you won’t have to worry about finding yourself on the road all of a sudden. Then you may find yourself hectically going through online portals such as www.zameen.com and frantically looking for a new home to rent.
Moreover, a proper and suitable notice period as a tenant will allow you to find your new home at ease once the current landlord decides to end agreement.
Of course, state laws determine the minimum stipulations you can include in the agreement. So, be sure to check your rights both as a tenant and as a landlord, since you may have a legal right to more than what you bargain for.
· Rent payment
Your rental agreement should state the rental amount, its due date, and the contract termination date in case of non-payment of rent by the tenant.
· Security deposit, maintenance and other fees
The rental contract should clearly state the amount of security deposit. It should also include who will be responsible for maintenance of the home and for the payment of other fees and taxes.
· Inspection and entry
Another thing that should be a part of any agreement are terms of when the landlord can visit for an inspection, repairs, maintenance or for any other purpose.
As a landlord you want to be sure that this is a part of the agreement, if it isn’t part of the agreement, you may find yourself shut out of your own home.
As a tenant you would have to be okay with some form inspection at some times, made appropriately, after a proper notice, but you can negotiate the terms on which all of this happens. You can stop a landlord from making unannounced, countless visits and using it as a form of harassment; you can also determine what an appropriate notice is.
· Damages, alterations, illegal activities
Be sure to include a section on what happens if the tenant causes damage to the premises and its compensation.
As a tenant, you will have to carefully look at the agreement to ensure that regular wear and tear of the property does not end up in the damages section.
Both the tenant and landlord may also want to include a section about when the tenant may want to make an alteration to the premises. A tenant may get a home thinking that a certain alteration may be beneficial for them but later find out that the landlord won’t allow it. In fact, it can also result in termination of agreement and/or you losing your security deposit later on.
As a tenant, you should also ensure that the original conditions remain part of the rental agreement, so, at the end, if you have made any improvements, you can use them as a counterpoising factor when getting back your security deposit. Similarly, the documented state of the property will ensure that a landlord doesn’t pin the expense of previous damages onto you as an excuse for not returning your security deposit.
Both landlords and tenants should clearly pen their conditions and concerns in the rental agreement. Not only will it minimise the risk of misunderstandings that can result in potential litigations, but will also ensure a healthy relationship between the parties concerned.