As the cost of owning a home continues to rise, more people are opting to rent. Renting has many advantages for tenants, so its no surprise that it is becoming a common practice. The increased popularity of renting means that rental agreements are more important than ever. It is imperative to understand how rental agreements work and what should be included in the document.
A few simple words and statements in a rental agreement could mean the difference between an amazing rental term and an awful one. The terms laid out in a rental agreement are especially vital if you’re looking to rent to own real estate. So, what exactly are these essential aspects of a rental agreement?
Rental Payment
Perhaps the most crucial element part of a rental agreement is the amount that you will have to pay. Payment is important to both parties, as the renter wants to maximize their profit while the rentee wants to pay as little as possible.
Agreeing to a bad payment plan can be detrimental to both parties. If the payment is too large, then the rentee may miss payments and be evicted, and this would end up costing both parties. Besides, if the payment terms are vague or unclear, then it could result in some legal issues when payment time comes.
Before you sign any sort of rental agreement, you should ensure that the payment terms are clearly outlined and understood by both parties.
Term
Another essential aspect of a rental agreement is the duration of the lease. Most rental agreements are valid for a year, but this isn’t necessarily true for all of them. Knowing the tenure of your rental agreement is vital as you need to know how long you can live at your new location.
An omission of the duration of the lease in your agreement can create a whole slew of problems. For example, you may end up being forced to leave the property sooner than you anticipated simply because the landlord says the term of your rent is up. Without a set term in your rental agreement, you would have nothing to challenge the landlord’s claim and would be forced to relocate.
Security Deposit
Although it may not be as important as the points above, the security deposit that you have to pay is an equally crucial part of your rental agreement.
When a rental agreement is signed, the landlord and tenant agree on a fee that the tenant pays the landlord. This fee is known as a security deposit and can range from a couple of hundred dollars to thousands, depending on the property you are renting.
A security deposit is meant to give the landlord peace of mind. The tenant puts down some money that will be returned at the end of the rental term. However, if the tenant destroys anything in the property, the security deposit will be used to fix the damages.
Security deposits can be a big part of rental agreements, especially if your landlord is demanding a large amount, so you need to ensure that the amount you pay as a security deposit is clearly defined.
Liability for Damages and Repairs
Deciding which party is responsible for fixing damages and conducting repairs is another noteworthy aspect of a rental agreement. Traditionally the landlord is responsible for maintaining and repairing the property, but that isn’t always the case.
Some landlords may try to slip a liability clause into the rental agreement, so you need to study your rental agreement thoroughly. You don’t want your landlord coming to you in the middle of your rental term and telling you that you are responsible for maintenance and repairs. The cost of maintaining and repairing a property can be steep. You can avoid this by clearly stating who is liable for damages and repairs in the rental agreement.
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