How to Write a Rental Agreement?

May 13, 2022

Rental Agreement – An Introduction

Before we know how to write a rental agreement – let us understand ‘Rental Agreement’.  

A rental agreement is a contractual document that provides the terms and conditions that have been agreed upon by both the tenant and landlord towards renting the property, either residential or commercial from the landlord. 

Rental agreements are usually done by month on month; these types of agreements are renewable automatically until and unless terminated by both the parties – i.e., either by the landlord or by the tenant. The lease agreement is a similar contractual document done between 

A lease agreement or a lease contract, on the other hand, is usually referred to for a year of rental. When a tenant takes rental of a residential or commercial property for one year – then he enters into a Lease Agreement with the owner. (1) 

Both rental and lease agreements are documents that outline the obligations, terms, and conditions set forth between the owner, otherwise known as ‘landlord’/’lessor’ of the property, and the other party, otherwise known as ‘tenant’/’lessee’, who pays rent during the occupation of the property.

A rental and lease agreement is a document that outlines the arrangement between an owner of a real estate, known as the “landlord” or “lessor”, and someone else that is willing to pay rent while occupying the property, known as the “tenant” or “lessee”.

Both are legally bound documents and the main purpose of this agreement document is to protect all parties’ interests. 

The key point in any state of the US, there is no legal difference between a lease and a rental agreement.

How to write a rental agreement or how to make a lease agreement

Every state in the US has specific legal procedures and approvals for rental/ lease agreements. It is always a wise choice to have a legal opinion when drafting the agreement. The following would list the important points on how to write a rental agreement – every rental/ lease contract/ agreement must contain.

1. Tenants and occupants’ details with the contact information, email ids, etc.

2. Address and details of the rental property

3. Duration of rental/tenancy – the validity with from and to dates.

4. Amount of rental to be paid by the tenant and the mode of acceptable payment methods

5. Security Deposits – though this amount is refundable at the time of release, this security deposit is essential for the landlord to take into account any damages that would have been caused during the stay by the tenant.

6. Terms and conditions related to maintenance of the property. (2) 

1. Details of Tenants and Occupants

“How to make a lease agreement/ lease contract?” This is your first step. 

The details of all grown-up adults who may occupy the rented property, including but restricted to, married or unmarried couples are required to be mentioned in the rental/lease agreement. 

This would facilitate both the landlord and also the tenant as there would be complete transparency about the number of adult occupants who would reside on the property. 

This occupancy clause would also eliminate any sort of apprehensions at a later time such as too many guests being allowed by the landlord or other activities being carried out at the property. The details of the occupants will pave the way to eradicate any sort of hesitations in the community as transparency has been printed in the contract. 

2. Address and details of the rented property

The complete address which includes the building name, number, floor, area code, and other applicable details are highly recommended to be mentioned in the contract document. 

Similarly, the area of the rented property with a number of bedrooms, kitchen, washrooms, dining and living room along with the description of storage units, utilities like heater, air-conditioners, washing machine, refrigerators, and other furnishing equipment are highly recommended to be mentioned. 

It is recommended to mention the reserved parking spaces too in the contract document as part of utilities. This will have a clear description of what is part of the rental agreement and what is not. Access rights to the tenants to what could be used and what are restricted would be in ‘black-and-white’.

3. Duration of rental/ tenancy – the validity with from and to dates 

Since the rental and lease have a thin difference – rental agreements are for short-term (1 or few months) and lease contract/ agreements are for long term (1 year) Rental agreements create short-term (usually month-to-month), it is in the best interest of both parties, the agreed duration of the rental with from and to dates are essential to be in the contract. 

4. Amount of Rental and Mode of payment

This is the number one thought when someone thinks, ‘how to write a rental agreement’. 

This clause is essential, not only for the amount of rental but also for the mode of payment so that there is no discrepancy for the complete tenure of the agreement and there will not be any amendment to the amount and/or mode of payment. 

This clause could be written whether the rent needs to be paid in advance or as arrears, though usually the rent is paid in advance. The mode of payment could be any acceptable mode like 

• Cheque payment

• Cash payment

• Bank transfer

• Or any other modes acceptable to renter and landlord.

5. Security Deposit

This clause will circumvent the difference of opinions and disagreements between tenant and landlord at a later time and there will be complete understanding and transparency on the Security Deposit amount and where and what will this amount be used and implicated. 

The Security Deposit amount is just for security purposes and needs to be refunded to the tenant at the end of the contract tenure. 

This is crucial when you think about ‘how to write a rental agreement’. 

6. Other Terms and Conditions

All other terms which need to be protected for tenants’ rights and landlords’ rights need to be mentioned clearly.

Here are a few more Terms and Conditions you can keep in mind while you think about ‘how to write a rental agreement’: 

1. Landlord’s responsibility to provide clean water and a healthy environment. This would include sanitary conditions too. 

2. The repair works of doors, windows, or other areas which might impact the privacy of the tenant could be mentioned as part of this clause. The ownership and responsibility matrix could throw highlights.

3. Landlords’ right to enter at the given time in the property. This clause also could pave the way so that both the landlord and tenant have a better understanding that the property is maintained with the highest care and the tenant does not indulge in anything immoral or illegal on the property.

4. The access rights of the tenant to the common areas in the community like swimming pools, gym, and other facilities with timings could be mentioned as part of the Terms and Conditions clause. 

5. Another clause could be related to pets like dogs, cats, or other domestic animals. This clause could be mentioned as there will not be any opinion mismatch later between tenant and landlord.

6. If the property is part of a community center and if there is any bye-law document for the complete community, then this clause could be mentioned as part of the Terms and Conditions so that Do’s and Don’ts are clear to the tenant.

Click here to view a FREE simple lease agreement template.

Click here to download your own Rental Agreement Form.

If you wish to know more about how to write a rental agreement and wish to draft a simple lease agreement template – contact eSahayak today. 

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