A Complete Guide to a Rental Agreement

The definition of a rental agreement is as follows:

The rental contract is a legally enforceable agreement between the owner of the property (the landlord) and the person paying rent in return for usage of the said property (the tenant).

The rental agreement should include all important requirements for the protection of landlord and tenant, as well as for the creation of joint evidence in the case of a disagreement.

The landlord-tenant relationship has always been a sensitive one. It is very rare for tenants to occupy a building without authorization and for relationships to deteriorate or become fraught with complaints and misunderstandings. A rental agreement protects both the landlord's and tenant's rights and avoids any disputes between them.

Your rent agreement ideally should have at least the following clauses:

With regards to the landlord

It is vital that the rental agreement include the following clauses:

a.  Each party's complete name and address;

b. Description of the Location;

c. The rent owed each month;

d. Optional security deposit that is refundable;

e. The term of the agreement;

f. Purpose and usage

g. Obligations such as maintenance, sublicensing, utility expenses, and taxes;

General Obligations and Responsibilities of the Parties;

sanctions for noncompliance

In the case of an unanticipated incident, or "force majeure," the agreement will be voided.

Consequences of unjust termination or eviction

Landlords are most anxious about the possibility of a renter trespassing or unlawfully occupying the property. Therefore, contracts must include extensive measures preserving the landlord's right to recover the property upon expiration of the lease.

In addition, the agreement should include a comprehensive procedure to ensure that the tenant will not cause harm to the property, with the tenant being liable for the cost of repairs if damage occurs. In the event that the tenant fails to make the necessary repairs, the agreement must permit the landlord to retain any security deposit that may have been placed with him by the tenant until the time that the landlord makes the repairs, and to use the security deposit to cover the costs and expenses associated with making the repairs.

As should be specifically specified in the Lease Agreement, Tenant's right to use and occupy the Premises under the Lease Agreement must be a simple permissive right and must not involve the creation and/or transfer of any interest in the Premises.

Landlords should force potential tenants to pass a criminal background check in order to protect themselves. There is a need for clarity in the rent increase clause. In addition, the rent increase frequency and amount should be indicated. Beyond this, it is prudent to have a dispute resolution procedure in place (such as whether mediation would come first, arbitration, or civil court).

In the case of the tenant:

A tenant's right to use, occupy, and enjoy the premises free from interference by the Landlord should be guaranteed in any lease agreement. Both tenants and landlords should have a clear understanding of who is responsible for performing major repairs and upkeep to the property, when they are to be performed, and for how much money.

Before signing the lease, the tenant should also verify the presence of key conditions.

Tenants are responsible for doing their own examinations of the property to evaluate the plumbing, electrical, and other infrastructure's quality and condition. If the rental apartment is completely furnished, it is in the renter's best interest for the landlord and tenant to specify in the lease agreement what is included, its condition, and if any of the furniture are damaged. This is important for calculating any damages or required repairs at the lease's termination. For example, if a carpet in the rental unit is stained when the lease is signed and this fact is recorded, the landlord cannot later claim reimbursement from the tenant for the damage.

As specified in the Lease Agreement, Tenant shall not be liable for payment of any prior debts related to the Premises, including but not limited to utility bills, water fees, or Society Maintenance Fees.

The rental agreement should also clarify who is responsible for utility payments throughout the length of the lease.

The clause about the security deposit is essential. The agreement should state the amount of the security deposit, the manner and schedule for its return, and, if applicable, the limited conditions under which the landlord may alter such amounts.

The agreement must include contain details about the lock-in period, eviction, and termination. Lock-in periods are stretches of time during which the tenant cannot terminate the lease without being obligated to pay rent for the duration of the lock-in period. It is crucial to note that there are exceptions to the aforementioned lock-in provisions that allow the tenant to terminate the agreement for any violation or default by the landlord during the lock-in period without incurring any liability.

In conclusion, the experts emphasised the need of clearly defining both the landlord's and tenant's rights in order to limit the risk of future conflicts. Even if the right of transacting parties to sue cannot be eliminated entirely, a well-articulated agreement that encompasses the commercial understanding and legal obligations of both parties would significantly lessen the likelihood of conflict.