One of the major deterrents when it comes to investing in rental properties is the legal hassles associated with it. Many never get into this option simply to stay away from the legal matters, and ends up losing on great investment opportunities. The first and foremost legal agreement that any property owner will have to acquaint himself/herself with is the lease contract. It is also known as the rental agreement and is a formal legal document that states who the lessor and lessee are and the details of the property or asset being leased. The document will include details like the duration of the lease, monthly rental, details of the property or asset being leased, and other terms and conditions as mutually agreed upon between the lessor and the lessee.
Lease contracts are beneficial for everyone
Whether you are the owner of the property, or a tenant, er even a roommate, the lease contract is a legally binding document that protects and safeguards the interest of every party concerned. It is also essential to create this document right at the beginning of the tenant-landlord relationship so that these is no misunderstanding or miscommunication about any matter. Ideally the lease contract must include the following details –
- Duration of the lease or the length of the lease
- Date of renewal of lease and the terms and conditions associated with it
- The rent or fee associated with it
- The due dates for the payment and the schedule for the rent
- Name and address of both parties
- Address and name wherein the rent is to be submitted
- Security deposit details
- Responsibility of the utilities and who is responsible for what
- Privileges of the tenant, which will include which amenities the tenant will have access to
- Late payment policies and penalty for the same
- Guest and pet policies
- Policy about having roommates or sub-renting
- Clause governing damage of property
- Early termination clauses and fees associated
A lease agreement with all these details must be printed in a legal document, signed by both parties, and each must have a copy of the same. This will ensure that there is no misunderstanding in future and everyone knows exactly what he/she is responsible for and their rights and privileges.
Lease Contract provisions to be mentioned
The provisions mentioned in any lease contract must cover all parties, and that includes both the property owner or the landlord, and the tenants. The names and details of each person who is legally allowed to reside in or utilize the rented property must be included within the lease. This will include the individual details of both married and unmarried couples or that of every roommate or family member.
The contract must also clearly state the rent and the due date for every month. There can also be a grace period mentioned within the contract considering the fact that there can be unforeseen delays in receiving monthly income and thus the tenant might need few extra days to pay the rent. Besides that, there should also be clear mention of any late payment penalty and what happens when subsequent rents are missed. This clause must include the modes of payment accepted. In case of payment via cheque there needs to be a clause in case a cheque gets dishonored or bounced.
Furthermore, there are clauses regarding pets and guests which need to be mentioned in the agreement. This will also include conditions about allowing or disallowing subletting of the premise.
Finally, in case of renewal of the contract, the yearly increment of the rent should clearly be written in the agreement.
Violation of any of these provisions mentioned within the lease by either the tenant or the landlord allows the other party to seek legal recourse.
Responsibilities of both landlord and tenant
No matter which country you belong to, the basic responsibility of the landlord remains to maintain the property such that it remains habitable, while the tenant is responsible for paying the rent for the property and any other utilities as mentioned within the agreement on time every month.
In case of any dispute or any clause not suiting either party they can always seek legal help. Today, online software for landlords, such as, Spark Rental, makes things a lot easier and simpler.
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