5 Elements Every Tenancy Agreement Should Have

Both tenants and landlords should ensure they secure a smooth rental relationship. Read on to get familiar with the elements every tenancy agreement should have.

Before you prepare your application as a renter, you need to learn what tenant screening includes on time. And if you're a landlord, you must get familiar with the most important elements every tenancy agreement should have, as it befalls you to prepare the rental contract. However, both parties should agree on this practical, legal document that comprises the basic rules of the tenancy. For everything else you might have forgotten, there's always an annex.

An agreement starts with identifying contract parties and property for lease

Most importantly, a contract must enlist the names and addresses of all tenants older than 18 and a landlord themselves. The tenant's address is, of course, the full address of the rental property.

This part of the agreement should state occupancy limits and assures the landlord that all tenants are personally approved. Any abuse of this element gives the landlord the right to evict tenants, e.g. if the renters sublease the property to a third party or bring friends or family members to live with them.

The property ID includes its name, if it has one, and address details, including the house number, street name, apartment number, and town, state, and postal code. Once it's clearly stated who signs the tenancy agreement for which rental property, it's time for other details.

1. Determining the rental period

The rental period specifies the validity of the contract. This is why it is of utmost importance to state the dates clearly, without any ambiguity. The best form is the simplest one, where you declare the day, month, and year the rental starts and the day, month, and year it ends.

Avoid phrasing such as a year from now or for the next six months, even if the date of the signing is mentioned. After the original annual or semiannual rental agreement expires, it can become a month-to-month lease. Once again, stating the precise rental period is key.

2. Defining rent amount, its due date, and late rent charges

Rent detail is one of the most significant elements every tenancy agreement should have. Namely, this part of the rental contract describes how much and when the rent is due and what happens if the rent is late. Additionally, it can even define acceptable payment methods.

Ideally, the contract should specify the whole rent amount for the entire rental period and then break it down into monthly installments. It is vital to document additional points such as grace period and late rent fee. Moreover, in the event the rent check bounces, a tenant is subject to a nonsufficient funds fee.

3. Listing tenant's and landlord's obligations and restrictions

It is difficult to find two identical rental properties, and the same goes for rental agreements. The element where they differ the most is the part enlisting the renter's and landlord's obligations and limitations.

Landlords
The most notable restriction concerning landlords regards the right to access the property and upfront notification requirements. If overlooked, it may violate the tenant's privacy rights and lead to a lawsuit.

Equally important, landlords must comply with anti-discrimination laws and health and safety codes and respect the security deposit limits determined by the state. Sometimes, landlords and renters need to consider disability-related modifications to the rental unit and incorporate the terms into the tenancy agreement.

Renters
Tenants can expect a larger portion of rules and regulations to comply with on their plate. Most significantly, these concern the rules on keeping pets, prohibition of disturbing behavior, and illegal activities as well as maintenance and repair works. For example:

• Whether pets are allowed, and if they are, the race, size, and the number of animals
• Prohibition of all illegal activities, as they are most likely to endanger other tenants and the landlord themselves
• They determine what is considered regular wear and tear, tenant obligations concerning maintenance, aesthetic and structural alterations, and repairs in case of property damage

As expected, a landlord should plainly state their expectations on all points.

In addition to that, tenants should generally ensure they maintain the furniture in good condition. Before signing an agreement, a tenant should make notes of all the damages and point them out to the landlord. This way there will be no confusion in the future. While renting, a tenant should always take care of the furniture, handle it with care and properly save from sanitary and other hazards and damages.

4. Every tenancy agreement should describe security deposit terms

Security deposit is the most common cause of disputes between tenants and landlords. Usually, it is because some terms are not clearly defined while others are entirely omitted. When it comes to one of the critical elements every tenancy agreement should have, it is wise to break down the security deposit clause into smaller parts to improve transparency. Specifically, the terms of the security deposit should include details on:

• The amount in US dollars to be paid
• Date and place when the deposit was collected
• Where the security deposit is held for safekeeping, aka the name and address of the financial institution
• Whether there are interest rates on this amount
• Description of situations calling for deduction from the security deposit
• The procedure describing when and how the return of the deposit will be made

5. Landlord and tenant signatures

Finally, to make the agreement legally binding, both parties must sign it. More specifically, every adult tenant (persons over the age of 18) must sign the tenancy agreement. For clarity reasons, it is advised that the names are written first as printed names followed by handwritten signatures. Every signature should be dated. If you as a landlord opt for professional property management to handle lease agreements, they act and sign on your behalf.

What happens if the landlord's duties become too much?

Perhaps your job preoccupies you, or you wish to dedicate yourself more to your family. Maybe you've moved and can't manage your rental property from afar. Don't panic, as there is a safe and practical option that solves every landlord's concerns. A reputable property manager's assistance solves a plethora of common issues landlords face when management becomes too much.

The best part is that the professionals can handle tenant screening and regular communication, rent collections, property supervision, deposit settlements, maintenance tasks, advertising, evictions, and all emergencies. Finally, you can let your chosen agent deal with the elements every tenancy agreement should have and have your time freed to pursue your other goals and priorities.
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