Having a property that you can put up for rentals is a blessing. If you know how to handle the nuances properly, it will prove to be highly beneficial to you financially in the future. We all know that when you are giving up your property for rentals, be it a long-term rental or vacation holiday rentals, you need to sign a rental agreement or a rental contract with the tenant. Even though there are lots of samples and draft rental contracts available online, there are still some things you need to consider.
A rental agreement defines your relationship with the tenant. It is a point of reference as well as a legal contract. It will determine your future issues and problems. So make it as exhaustive and as specific as possible. A rental contract should always be in consonance with the laws and regulations of the jurisdiction it is situated in, if not, it may be a problem in the future. For this, a lawyer can be hired to check the nuances and technicalities.
Apart from these basic things, here are some of the advice which allows you to make a strong rental contract with your tenant. If you follow these, you can solve major forthcoming problems automatically.
Rent Payments – It is one of the most important clauses in a rental contract. Even for vacation holiday rentals, rent is a very important term for both parties. It is advisable to fix the amount of rent every month, the due date of that rent, and the format through which it will be paid. For eg, through online transfer, cheques, cash, etc. There should be provisions regarding late payments and repercussions attached to them. For better payments, make sure you have a late fees penalty clause attached to the rent clauses.
Terms of the tenancy – Terms of the tenancy mean the category under which your tenancy might fall. For example, it can be vacation holiday rentals, month-to-month rentals long-term rentals etc. Specify the start and end dates of the rental contract along with the specific services provided in it. This will ensure there is no confusion from both sides.
Specifications of the tenant – One of the most common mistakes done by landlords is only documenting the names of those who are paying the rent or who have officially signed the rental contract. While it may seem obvious why they do so, it is not advisable to follow. When you are making a rental agreement, including the names of all adults residing in your property. This includes spouses, parents, relatives, etc.
Other financial clauses – Apart from the rental clauses, other financial clauses that should be included are fees, deposits, damage repairs, non-returnable fees, interest, etc. Questions such as when the deposit will be returned, what is the extent of damage liability for the renter, interest on deposit, etc should be answered in the rental agreement.
Rules and limitations – Whether it is the use of the premises for commercial purposes or subletting, you should have your conditions specifically stipulated in the contract. You should not allow anyone else apart from the names on the contract and minor children to be allowed for a long period of time unless permission is taken. Make sure you include these clauses in the contract and agree upon them. This also includes limiting any type of activity such as selling, manufacturing, illegal actions in the property.
Maintenance and repair – Any liability arising out of damage due to hazardous and defective conditions that arise because of the tenant should be the tenant’s liability only. Apart from this, any repair and alterations to be carried out should be carried out with written permission only. These clauses will help you keep control of the damage a tenant may cause to your property.
Access Rights – No the landowner has the right to enter the premises of his/her tenant without permission. This is the rule in most jurisdictions. However, through an exhaustive stipulation in the contract, you can reserve your right to have access to the property under certain conditions such as emergency, repair, inspections, etc. Although, a minimum prior notice period to the tenant is required to do this and you have to adhere to that. Make sure you include it in the rental agreement.
These are the few tips you must follow if you want to have a strong rental agreement with your tenant. A strong rental agreement will help maintain cordiality between you and the other party, and help you live a peaceful life. It will also help you attract genuine and trustworthy tenants only, since the ones who want to defraud you won’t agree to these conditions readily.
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