A Brief Introduction About the Home Rental Agreement
A Home Rental Agreement is a legal document that is created between two or more parties when one party is renting out their property and or real estate to a tenant who is described as the second party in the contents of the agreement. This legal document outlines the details of the transaction that will be initiated between both parties, along with the inclusion of necessary details such as the funds that will be exchanged between both parties for the transaction to take place. The amount of time for which the property or real estate in context will be rented out and also the terms and conditions that both parties need to follow.
Who Takes the Home Rental Agreement? – People Involved
In the creation of a Home Rental Agreement, there are usually two or more parties involved. The first party is the landowner or the landlord who owns the property and or real estate in this context, and the second party is the tenant to whom the property is being rented out to. In legal terminology, the first party is referred to as the landowner, the second party as the tenant, and the legal document is referred to as the agreement.
Purpose of the Home Rental Agreement – Why Do You Need It?
The main purpose of this agreement is to establish a legal understanding between both the entities and to make sure that the interests of the private parties, along with the collective, are protected at all points in time. While the use of a Home Rental Agreement is common enough in today’s time, there are still instances when landlords and tenants get confused between the use of a lease agreement and a rental agreement.
Some of the main differences between both these documents are as mentioned below.
The use of a rental agreement for the property and or real estate is typically made for a short period of occupancies, such as a month or 30 days. On the other hand, the use of a lease agreement is made when the tenant is going to use the property and or real estate for an extended period, such as a year or more.
While rental agreements are due to expire on the date mentioned in the agreement, lease agreements, on the other hand, get automatically renewed for a said tenure specified in the contract, unless and until the landlord hands over an eviction notice to the tenant. The terms and conditions, as outlined in a lease agreement, can rarely be modified or changed once set in place, but the terms and conditions in a rental agreement are subject to frequent changes as and whenever needed. However, the replacement must first be mutually discussed between both parties.
For the lease agreement get renewed automatically upon expiry, the landlord needs to include a precedent which states that the tenant will be staying on a month to month rental agreement, until the lease agreement is recreated. There is no such instance with a Home Rental Contract.
One of the most interesting facts about a rental agreement is the fact that the tenant can use the same as proof of current residential address if the need ever arises. This document being legally binding can be presented to offices, financial institutions, and organizations whenever the tenant needs to show the current residence of proof.
Contents of the Home Rental Agreement – Inclusions
Involved Parties: There are mainly two parties involved, the primary being the party who wants to rent out his, her or their real estate and or property, and the second party is the tenant to whom the property is being rented out to. In legal terminology, the first party is referred to as the landlord, the second party as the tenant, and the legal document is referred to as the agreement.
Effective Date: This section of the agreement outlines the date from which this contract will stand legally binding and also the date on which the same can be dissolved.
Application: This agreement is applicable in the state, city, or county where it was initially drawn at.
How to Draft the Home Rental Agreement?
A Home Rental Lease Agreement can be drafted by simply following the steps mentioned below.
Organize a meeting between both the parties and discuss upon the terms and conditions of the agreement such as the tenure for which the said property and or real estate is being rented out, the rules and regulations that both parties need to follow, the terms and conditions that are applicable along with the amount of funds that will be exchanged for the transaction to take place. After the two parties mutually agree to the conditions of the agreement, they can consult a lawyer and draw a House Rental Contract according to the requirements and specifications. Both parties need to sign the documents in front of the lawyer after the agreement is drawn.
Negotiation Strategy
While negotiating the formation of a Home Rental Agreement, the individual interests of both parties must be addressed along with the common cause.
Benefits & Drawbacks of the Home Rental Agreement
The most significant benefits of having a Home Rental Agreement are as follows.
Benefits
The contract mentions the responsibilities, obligations, and limitations and hence makes sure that both parties are well aware of them at all points in time.
This is document acts as legal proof and thus can be produced in court if there is a need in the future.
Drawbacks
In the absence of a Home Rental Agreement, neither of the parties have legal proof of an understanding taking place between two entities, and thus if the matter is ever brought to court, both parties stand to lose.
What Happens In Case of Violation?
In the case of violation of a Home Rental Agreement, certain remedies come into effect, and in a few cases, the contract is dissolved, and a new set of terms and conditions are agreed upon(1).
Other than violation of a Home Rental Agreement, if both parties mutually decide to end the tenancy agreement, they can do the same. However, the standard practice continues to be that both parties provide each other with a two-month notice before the evacuation taking place(2).
A Home Rental Agreement is created with the thought of initiating a smooth and efficient transaction between two parties and to make sure that both are mutually profited from the transaction. Thus, it is always advised that both parties create a Home Rental Agreement when such a sale is concerned.