What is a rental agreement?
A rental agreement is an arrangement between two parties – landlord and tenant, by which the landlord allows the tenant the right to the use a property owned by the landlord for a specified period of time, in exchange for periodic payment of rentals.
The agreement does not provide ownership rights to the tenant. However, the landlord may grant permission to the tenant to modify or change the property to suit his needs. The tenant is responsible for the condition of the property during the period of rent.
Rental agreements may be used for the rent of residential or commercial properties.This agreement outlines the conditions of the arrangement so that each party understands their rights and obligations under the arrangement.
Rental Agreement – Sample format
Contents of a rental agreement
Common contents of a rental agreement include:
- Names of the landlord and tenant and/or their agents.
- Description of the property.
- Amount of rent and due dates for payment, grace period, late charges.
- Mode of rent payment.
- Methods to terminate the agreement prior to the expiration date and charges if any.
- Amount of security deposit and the account where it is held.
- Utilities furnished by the landlord and, if the landlord charges for such utilities, how the charge will be determined.
- Facilities in the premises which the tenant is entitled to use such as swimming pool, security systems etc.
- Rules and regulations such as pet rules, noise rules and the penalty for violation.
- Identification of parking available, including designated parking spaces, if provided.
- How tenant repair requests are handled and procedures for emergency requests.
Terms commonly included in a Rent agreement
- Duration: Period for which the rental agreement will be in effect.
- Rent: The consideration or payment made by the tenant to the landlord in exchange for the property Rented out.
- Deposits: The amount of deposit required (if any), the purpose of each deposit, and conditions for return or adjustment of deposit at the end of the rent period.
- Utilities: Which utilities are included in the rent, and which utilities the tenant is responsible for.
- Insurance: Whether the tenant is required to insure the property – this is most often used in commercial rental agreements.
- Repairs and Maintenance: Party responsible for repairs and maintenance of the property – landlord or tenant.