A rental agreement is a legal document. That means that once you sign it you will be held to whatever the terms are. While most landlords will present a standard document, others go out of their way. Legal jargon is super difficult and complicated. Why do lawyers need to use such difficult words to say something simple anyway? If you find that there are many words you do not understand then you might want to consult a lawyer. You should read the entire document front to back but there are some sections that you must pay special attention to. Sections that will be very impactful to your tenancy.
Sure you were told how much you will be expected to pay when you were house hunting but you should confirm that it is the same amount on the document. You would not believe how many shady landlords try to sneak in an extra amount for when they decide to claim free money. The document should also include how much you are required to pay for utilities as well as how much deposit you need to pay. You should also expect to find out how much of the deposit you will get back. Some landlords deduct an amount as a sort of indemnity fee. The document will also specify how the rent and other fees will be paid.
Landlords are human and understand that life can be tough and that life is unpredictable. They might, therefore, institute a penalty for late rent payment. It is usually a small percentage of the monthly rent.
You might come across the word pro-rata. This means that if you have moved in the middle of the month, the rent will be apportioned. You could also see the phrase inflationary increase. This is common in commercial real estate but may also be applied to residential real estate. This is an increase that you should expect after a prescribed number of years.
The first element in this section will be how long the contract is effective for. The standard is five years. Again in residential real estate, this is not too strict. The landlord might not require that you renew the contract once it lapses. In fact, in most cases in residential real estate, the contract is a mere formality. This is especially true in lower-income neighborhoods.
In commercial real estate, however, the terms of the contract are very strictly enforced. In fact, if the tenant does not renew their contract when the time comes they risk eviction. You, therefore, must pay attention to the duration outlined by the contract. In some cases, the landlord will have you choose between 5, 10 or however many years.
As the contract nears the end then you should think about whether you would like to continue being a tenant. It could be your chance to start afresh someplace different or bigger. Renewal should therefore not be a foregone conclusion.
Another element of the duration is the amount of notice you need to give before moving. Different landlords have different preferences with regards to notice. You will need to know how long before moving you need to inform your landlord. You should also find out if there will be a penalty for not giving that much notice.
3. Other terms
All terms in the contract will be important as they directly affect you. You should look at how maintenance and repairs will be handled. What are you expected to do if your door breaks down? How about if the hot water in your shower does not work? You will need to consult the contract on what is advised in such an instance. The document should also tell you about the maintenance. Say how many times the landlord will want to repaint the building.
Another important term will be how the landlord will handle the eviction. Will he or she give notice? How long will he or she give you to get your affairs in order? How about when there is conflict between neighbors? How will the landlord handle it?
You should pay special attention to the rights of the tenant as well as the expectations for the tenant. As the tenant, you will want to know what you have a right to demand. You will also know what will be expected of you as the tenant. This will help you steer away from the boundaries. It is a good step towards being a good tenant.
Understanding the tenancy agreement is absolutely imperative. You do not want to sign a document you only half understand. This is how you get yourself sued for flouting some rules you did not know existed. You should be careful not to be in breach of contract. Breach of a contract could and probably will get you sued.
There will be instances where a tenancy agreement is not signed. Some landlords rely on a handshake and a money exchange. There are risks with this. The landlord could evict you without notice and you would have no legs to stand on. The landlord could raise your rent without notice again and you would have to contend with it. You basically have no protection if there is no tenancy agreement. But then again you could get away with a lot if there is no contract. You could move out without notice.
The point here is that the tenancy agreement is more for you as the tenant than for the landlord. You should be glad to sign it. It secures your place in the building and keeps things kosher.