Residential Rental Agreement
A rental (lease) agreement is a legal agreement between the lessor and the lessee on the temporary use of a property for a specified payment. The “lessor” or the “landlord” is someone who owns a rental property and provides it for temporary use. On the other hand, the “lessee” or the “tenant” is an individual who subsequently rents this place for a specific payment.
The rental contract defines the rights and provisions for both parties and guarantees in written form that all of the potential decoys will be eliminated before the agreement comes into effect.
What is a Residential Rental Agreement?
A residential rental agreement is reciprocal and reimbursable, where one party (the lessor) undertakes to provide the other party (the lessee) with a property for residential use for a specified period and a certain amount of money. The right to lease property belongs to its owner. Landlords can also be individuals authorized by law or the owner to legally lease the property. Property is considered to be any individually defined residence in a condition that meets the terms of the lease agreement and the purpose of use specified in all the required primary documents.
The rental agreement must contain rent terms and a clear description of the property being leased. Otherwise, such an agreement is considered invalid.
Essential terms of the contract
The residential rental agreement must contain specific information that verifies the property that is transferred to the tenant as a rental object. Along with property identification, the terms of residence use and a fixed cost of the rent must also be indicated.
In the absence of this data in the contract, the condition on the object to be leased is considered not agreed by the parties, and the corresponding contract is considered not concluded.
When to Use a Residential Rental Agreement
When you want to lease a house, an apartment, or a room, it’s required to draw up a residential rental agreement. This official document describes the responsibilities of both parties and sets certain rules that make the deal legal.
Creating a residential rental agreement can prevent unexpected changes and let you resolve any issue properly and legally. Hence, it is important to compose the rental contract in the most detailed and understandable way for all participants.
What Should Be Included in a Residential Rental Agreement
To draw up a document accurately, you need to know what statements you must present:
- Information about the parties
This refers to the full names of the landlord and everyone else who will live in the leasing property, including their contact details and full legal information.
In this part of the residential rental agreement, it is important to describe such information as the term of the lease (compliance with this term is of great importance) and the possibility of its extension.
The amount of payment for a dwelling place is noted down in the residential rental agreement. If the local law specifies a maximum rental payment amount, the amount defined in the rental contract must not exceed it.
The residential lease agreement must contain all the information that makes it possible to identify the property being transferred to the tenant as a subject of the lease.
In addition to the address and other noteworthy details, the contract must contain a complete description of the property so that the owner does not demand too much from the tenant upon the termination of the contract. Moreover, this way, landlords can protect themselves from theft and other unpleasant events.
A security deposit is a certain amount of money, which guarantees that the dwelling will remain undamaged and that the tenant will not leave it unexpectedly before the end of the contract period.
It is important to remember that every state has a different residential rental agreement pattern. Please, read the local state requirements before you start creating a rental agreement.
How a Residential Rental Agreement Works
Here you will find a comprehensive guide on how to fill out the residential rental agreement correctly.
1. Select the type of rental contract
There are usually four types of residential rental agreements:
- One-Year (standard type of rental agreement, which can’t be terminated by either of parties);
- Month-to-month (also called “Tenancy at Will,” has an unspecified period of the rental lease and can be canceled at any time by either party);
- Roommate (for a group of tenants who want to rent from one lessor, it is needed to specify the payment, cleaning, and other agreements between them);
- Sublease (when the tenant needs to vacate the premises before the end of the contract, and they involve a third party for rent to get help with paying while maintaining full responsibility).
2. Name the parties signing the contract
Write the parties’ full legal names and current addresses. Don’t forget to mention other adult tenants.
3. Characterize the dwelling
Indicate the details (address, floor, number), type (house, apartment, room), and parameters of the leased premises.
4. Write the period of the lease term
Indicate the lease term and possible conditions for the change of the rent payment and conditions for an early end of the contract (for non-compliance with the terms of the lease).
5. Register a security deposit
Specify the amount of the security deposit. A security deposit is collected at the start of the transaction, and landlords are allowed to keep it. But each state has different permits for its spending.
6. Sign the residential rental agreement
To finish the process of creating the residential rental agreement, parties must sign and date the document. Don’t forget to give each individual a copy (there must be at least two copies of the document).
Leasing a property is a rather important event, so you must first find out more about who is renting the dwelling.
Ask the tenant to complete the rental application form; it should contain such information as the full name, current living address, workplace, amount of income, and rental references. Right after you have their completed form, you need to do a credit check to avoid fraud and poor financial planning. Please note that the final decision does not depend solely on the results of such a report. Each state has a different inference policy.