What is a Rental / Lease Agreement?

A Rental agreement or a Lease agreement is an important legal document that must be completed and checked before a landlord rents out a property. In simple words, it is an agreement that acts as a contract between a landlord and the tenant; it shows that the landlord has given the tenant permission to occupy the space owned by the landlord. Both agreements are similar in nature, but there are some underlying facts that make them stand apart; and it is important that you understand these differences before acquiring either one.

 

Why should the agreement be in writing?

The agreement is the most important piece when renting a property, where a rental agreement can be verbal, implied, or in writing; it is best to get it all down in writing. A written agreement offers more security, and all the terms and conditions can be laid down by both parties.

 

A Lease agreement is a legally binding contract between two parties (the landlord and the tenant) the document states that the property is given on rent for a long period of time, which is usually more than a year. The specifics of any lease agreement are specific, and contains extremely details point laid down by both parties. The main purpose of the lease is to ensure that both parties interests are well protected during the process.
What information should be provided?

Before entering a rental agreement the landlord is required to offer the tenant:

 

  1. His/her name and address
  2. Along with the name and number of the individual who is in charge of the premises.

 

As for the tenant, they are required to offer their legal name to the landlord if they ask.

 

Who receives the agreement?

Once the agreement has been signed by both parties, the landlord is required to offer the tenant a copy of the signed agreement. If the agreement was signed before the date it is set to begin, the landlord is required to deliver a copy to the tenant during the first 21 days. If the copy is not provided in 21 days the tenant will not be bound to any terms or conditions stated in the rental agreement.

 

When is rent due?

Rent is due on the first of every month, unless the landlord and the tenant has agreed to a specific date. If the tenant is unable to pay the rent on the due date, the tenant will be within his/her right to mail a notice of termination.

 

Damaged Belongings

Landlord’s cannot be held accountable if the tenant’s property has been damaged, if the tenant wishes to be compensated for the damages or losses they should obtain tenant insurance.

 

Refuse to Rent to Pet Owners

The Landlord is within his/ her right to refuse to rent his space to anyone who owns a pet. If the landlord has stated  in the agreement that no pets are allowed on the premises and the tenant keeps a pet, the landlord can serve the tenant with a notice of termination.

 

What are Rental Agreement and Lease Agreement?

  • Rental Agreements – The difference is that a Rental agreement is not a long term contract, and is usually ranges from a single month to a few months. A month to month lease agreement is a simple process, the rental agreement expires at the end of each month, and then renews the very next month. This way both parties are free to end the agreement at the end of the month.The stipulations are same as the standard lease, but the landlord or the tenant has the power to alter the terms of the agreements at the end of the month. The landlord is within his/her right to ask the tenant to clear the premises, or request an addition to the rent; and will be well within his/her rights to do so. However, the landlord required by law to hand the tenant a 30 day notice prior to his request; that the tenant clear out the property.
  • Lease Agreements – In a Lease agreement the time and amount must be noted down, which means the landlord or the tenant will not be able to change the deal. Repercussions are to be faced by either party if they violate the terms of the lease agreement. The lease agreement is effective as soon as the date states comes, and ends when the date stated on the document has arrived. If both parties wish to continue the arrangement, they can sign another lease agreement.The landlord is under no obligation to change the terms of the old lease, but he can change the rental amount if desired. This is why many tenants prefer to sign a long term lease, so they can keep on paying the same amount. As the area rents tend to go up, which is a problem for the tenant.

Advantages and Disadvantages

Both monthly rental agreements and a lease agreement come with their own set of advantages and disadvantages. Where a rental agreement gives the landlord an opportunity to rent out a space for a short time span, it also gives the landlord an advantage; where they are able to increase the rent if the area rent rates go up. These places are ideal for tenants who are not sure of how long they will be staying for.
On the other hand, in a lease agreement the landlord has a set income coming in each month, for more than one year. This way the tenant does not have to worry about looking for new tenants after every few months. The tenant is also at an advantage as they will not have to pay more in case the area rent increases; and will not be under the threat to leave the premises if the tenant asks.

 

Both agreements advantage both parties in their own way; and the kind of advantage they are in for depends on their requirements.

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