The relationship between a landlord and tenant is legally binding in an agreement contract document. Verbal agreements cannot hold up in a legal proceeding.
So the landlord of property must ensure that before leasing or renting out their property, they have prospective tenants commit to the terms of a tenancy agreement.
Using a tenancy agreement template would go a long way in helping you close leasing agreements in a quick time. Most prospective tenants are wary of lengthy tenancy agreements, but a summarized tenancy agreement document will dispel any reservations that these tenants may have.
What is a tenancy agreement?
Simply put, a tenancy agreement is a formal contract that spells out the relationship that exists between a landlord and their tenant. This contract is legally binding and provides in no uncertain terms all the conditions that the tenant must agree to before they can take possession of a property.
A tenancy agreement protects the landlord by ensuring that their property is leased or rented by only qualified tenants. Likewise, a tenancy agreement clarifies what a tenant is allowed to do or not on a rented property.
For example, a landlord may indicate that no pets are allowed on a property in a tenancy. Once any prospective tenant with pets sees this condition in the agreement, they instantly know not to bother renting the property. A tenancy agreement template is clear and unambiguous in nature.
When to use a tenancy agreement?
A tenancy agreement is used anytime as a landlord intends to rent your property to a tenant. The tenancy agreement can be entered into with a tenant by yourself or a property agent can do so on your behalf.
The agreement ensures that there are no misunderstandings between yourself and the tenant during the lease period.
The tenant is made aware of what they can or cannot do on your property. And they have to sign up and agree to your terms before they can be allowed to rent your property.
What is included in a tenancy agreement?
Some of the key information contained in a typical tenancy agreement template is as follows:
- The full name and address of the landlord (where applicable).
- The tenant's full name.
- The address of the rented property.
- The expected rent payment is indicated.
- The tenure of the lease or rent. In situations where the duration of the lease agreement is not indicated, then it is assumed that the lease will run for a full year.
- A run-down of the tenant's responsibilities as well as the terms and conditions for the lease.
- The tenant's commitment to the terms and conditions of the tenancy agreement. This commitment is secured with the tenant appending their signature and date on the tenancy agreement contract.
- The signature and date of the landlord or property agent.
Best practices for tenancy agreements
Some widely accepted best practices for tenancy agreements include:
- Tenant Identification Verification: It is important to verify the identity of a prospective tenant before renting out your property. The last thing you want is to lease your property to an unscrupulous tenant.
- Provide Property Address Information: The tenancy agreement should accurately indicate the rented property's address. Stating the wrong address on a tenancy agreement could prove to be counter-productive in any legal proceeding.
- Indicate Landlord Contact Details: As the landlord, you need to provide your contact details to the tenant. You should indicate your address, phone number and/or email address. This is necessary as the tenant should have a way of contacting you with regard to your property. Where a property agent is acting on your behalf, then the contact information of this property manager would suffice.
- Indicate the Expected Rent Payment: The amount of rent expected should be clearly indicated in the tenancy agreement. This amount should be written in both numerical figures and words for better clarity.
- Indicate the Duration of Rent: The duration of the lease should also be clearly indicated in a tenancy agreement. Note that in a CSE where you fail to indicate the tenure of a leasing agreement, it would be assumed that the tenancy agreement was for a full year.
- State the T&Cs of the tenancy agreement: You need to state your terms and conditions for the tenancy agreement. This should be unequivocal and precise. Also, you need to state the obligations of the tenant. Clauses and rules such as - 'no smoking, pets or home business allowed on the property should be indicated as well. Other T&Cs like penalties for late rent payments and damages should also be stated in the tenancy agreement.
Q1: Who are the parties to a tenancy agreement?
A1: A standard tenancy agreement has two parties: the landlord or property agent and the tenant.
Q2: Is there any law on how short a tenancy agreement can be?
A2: No. There is no law limiting the length of a tenancy agreement. However, a short, concise tenancy agreement appeals to prospective tenants more than a long, tedious one.
Q3: Should a tenancy agreement include property usage rules?
A3: Yes. You should clearly state the rules that the tenant needs to abide by when renting your property.
Q4: Can I edit your tenancy agreement template?
A4: Yes. Our free-to-use tenancy agreement template is available for download in an editable MS Word version. However, you should always seek your lawyer's counsel before including content to ensure that you are doing so within the provisions of local law.