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How to Make Sense of a Rental Lease Contract

At some point in almost everyone’s life, they find themselves faced with a rental lease contract.

These contracts are readily available for download and contain all the basic information needed to keep you on the right side of the law.

It often happens, however, that the contract goes partly unread. You may read the first three pages or so with thorough attention, skim through another page or so, and then give up on the rest of the yawn-worthy, jargon-riddled document entirely!

However, the reality is that legally binding document is there to protect both tenant and landlord in case of a dispute, so even though it might sting to read the entire document from front to cover, it’s in your best interest you actually read it all!

So, if you’re struggling to keep up with the rental lease contract terminology used, here is a simplified quick rundown of what a standard rental lease contract contains:

Acceptance

A statement that this contract is a legally binding agreement and from when it is in effect (i.e. date of signing, not from when you move in).

Deposit

The usual rental deposit amount is the same as the monthly rent amount. Your initial payment would, therefore, be double the monthly rent and you will need to pay it in advance.

This is a security for the landlord in case the tenant fails to pay for a month’s rent and to cover cleaning or damage to property once the tenant moves out. The tenant will receive the remaining balance after no more than 14 days of moving out.

Rent

Here it stipulates what amount is due and by what day of the month, normally the 1st. In almost all contracts, rent is paid in advance, unless specifically mentioned otherwise in the rental lease contract.

Commencement and Duration

This part discusses the time period for which the contract is valid, which usually one year after which the contract will work on a month-to-month base if not terminated or renewed at a 10% increase.

Please note that any of these three mentioned situations should be communicated to the landlord in writing.

Breach

Any reason for which the contract may end prematurely is given here, plus what actions shall be taken should the tenant refuse to vacate the premise.

The rate of interest added to late lease payments is stated here as well in accordance to the primary lending rate at the time of the contract’s compilation.

Domicilium citandi et executandi

Translated from Latin, this literally means “house for summoning and upkeep“, and refers to which address any necessary formal documentation needs to use for either party, and will be deemed as received according to the opposite party.

Tenant’s obligation

Here, the purpose of the premise will be stated (residential or business) and that the property and neighbours be respected, and the law upheld.

The maximum number of tenants will also be stated and that the tenants are responsible for certain repairs. A pre-renting inspection is required.

Furthermore, any conditions or alterations to the rental space are clarified in this section along with information about house insurance. Another (move-out or exit) inspection will be required before the tenant moves out and compared to the pre-renting inspection.

Landlord’s rights

Permission for the landlord to enter the premise with prior permission, put up a “to let” or “for sale” sign, or to terminate the lease contract in case of sale is stipulated in this section.

Indemnity

A list is given here of what the tenant cannot hold the landlord accountable for, such as interruption of services or personal loss or damage.

Subletting

This portion will specify the conditions of subletting or transfer of the contract to another party other than the original two parties, and of course, whether or not it is even allowed to happen!

General

This summarises lawfully binding terms of the contract, including the terms of compliance, terminology and confirmation of awareness and understanding.

It also includes the practical procedure in case of indebtedness of the tenant to the landlord, any legal costs should they arise and how the landlord may proceed in such a situation.

And, last but not least, the landlord’s right to supply a credit bureau with the tenant’s information for an affordability check.

Special conditions

Any particular rules concerning the keeping of pets, whether smoking is allowed, copies of keys etc. is all added in this section.

All-in-all, the above brief summary talks about the content of a basic lease agreement and highlights the ins and outs for both parties.


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Make Sense of a Rental Lease Contract
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