Home Rental Contract: A General Guide

A home rental contract is a binding document containing information relating to the tenant’s and landlord’s accommodation, responsibilities, and rights. It also has provisions for any charges due to early termination, late payment, or property damage. A rental contract can also be referred to as a lease agreement, tenancy agreement, or even a rental bond.

Factors to Consider When Entering into a Home Rental Contract

• Determine the Type of Rental Contract. There are two types of rental contracts available today. Fixed-term leases appeal to set amounts of time with an end date in mind. You may engage in a non-binding agreement, or you may ask for only one draft.
• Verify Key Information. Some landlords might tell you that the lease only needs to have one name on it. But later on, this can cause another set of issues. If only one name appears on the rental agreement, that person will also be liable for all payments, and their name will appear on utility and tax bills. Furthermore, since you are the only one legally liable, you would have to pay out of pocket if you had a falling out with one of your roommates or if they neglected to make their rent on time. After you move out, you will also get the final utility bills or backdated tax slips. Finding former roommates or holding them accountable after the lease has expired can be difficult. It is best if all names are on the lease to save yourself all this trouble.
• Discuss Rental Payment Terms. The rental agreement must specify exactly how payments are made. Make sure the rental agreement outlines all the costs, includes a timeline for rent payments, and outlines the repercussions for nonpayment. Some deals may include services such as the internet, electricity, and water, and others might contain only the basic rent. Some buildings will ask you to pay an annual service charge on top of rent or offer a gym for you to use. When in doubt about what you are entitled to, it is better to seek clarification before signing the contract.
• Set Aside Money for Extra Costs. Landlords often require a security deposit equal to one or two months' rent. Rest assured that, barring normal wear and tear, you will receive this back when you move out, provided you maintain your room or apartment in the same condition as when you moved in. You will be required to pay various high fees if you choose to book through an agency, while housing platforms typically charge lower booking fees.
• Review and Understand Lease Agreement Terms. The rental agreement will include information regarding what can and cannot be done to the property. Ensure your rental agreement permits you to hang art or paint the walls, or you risk not receiving your security deposit back. There are usually additional general prohibitions as well, like no pets or smoking. Before renting, ask the landlord if you would like any of these.

Tenant Rights in a Home Rental Contract

• Freedom from Discrimination: The Fair Housing Act, according to the U.S. Department of Housing and Urban Development (HUD), shields people against discrimination when they are looking for housing assistance, renting or purchasing a property, obtaining a mortgage, or taking part in other housing-related activities." Landlords may also be forbidden from discriminating against prospective tenants at the municipal and state levels on the following grounds:
  • Nationality
  • Age
  • Status as a veteran or military personnel
  • Gender expression or identity
  • Revenue source
• Right to Sufficient Housing: Every renter is entitled to a livable home that complies with building, health, and safety regulations. Landlords are required to fulfill the implied warranty of habitability by:
  • Ascertaining the building's fundamental structural components are secure and undamaged
  • Keeping the elevator, sanitary, HVAC, plumbing, heating, and air conditioning systems safe
  • Maintaining the cleanliness and safety of common areas, such as stairways and hallways
  • Making sure there is enough hot water and dependable heat
  • Making sure that risks to the environment are avoided
  • Taking appropriate safety measures to prevent illegal access
• Right to Privacy: The landlord is the property's owner, but they cannot enter at any time. This is so that the landlord can only enter for authorized purposes, and tenants can exercise their right to privacy. Generally, your landlord must give you advance notice if they need to enter the property to make repairs or to check on something. Except for emergencies, when they are exempt from notice requirements, most states mandate that landlords give at least 24 hours notice before entering.
• Notice of Eviction in Advance: Your landlord must give you sufficient notice, usually in writing, if they intend to evict you. The duration of what is considered "adequate" varies, but it is typically 30 or 60 days, contingent upon the situation. However, it may only last three to five days if you have broken your rental agreement.

Furthermore, notices of eviction fall into two primary categories:

• For Cause: This kind of termination notice is used by landlords when a tenant violates the lease's terms, such as failing to pay rent or causing damage to the property. Watch this video to learn more:

• Without Cause: If the tenant has not broken any rules, the landlord may terminate a month-to-month lease in some areas by serving a notice to vacate. Generally speaking, a landlord cannot end a fixed-term lease without good reason. Watch this video to learn more.

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Changing or Terminating a Home Rental Contract

If the tenant has a month-to-month rental agreement, the new landlord may generally end the tenancy or raise the rent before the beginning of the next month as long as you give the required notice—typically 30 days, though this varies by state and the length of time the tenant has occupied the property. Regardless of who owns the property, the tenant has the legal right to occupy the rental for the duration of the lease if a fixed-term agreement, such as one that lasts six months or a year, is in place.

Exceptions to Termination

The lease may be terminated early in certain situations:

• One is if the lease contains language stating that the seller or owner may end it if they sell or transfer the property; if this is the case, the lease may be legally ended when you purchase the house.
• The other possibility is that you may adhere to your state's notice-to-vacate regulations if you purchase the property due to foreclosure. For instance, in Washington, you cannot start an eviction procedure until you have given tenants sixty days' notice to vacate a foreclosed property.
• Lastly, you can use an owner move-in eviction (OMI) to force a tenant to vacate the property if you intend to use it as your primary residence and not as a rental.

Key Terms for Home Rental Contracts

• Easement Agreement: A real estate concept describes a situation in which one party uses another's property and pays the property owner a fee in exchange for the right to use the property.
• Eviction: A tenant at will is someone who doesn’t pay rent and can be kicked out by the landlord through the court process called eviction.
• Tenancy-at-will: A tenancy-at-will takes place when either the owner/landlord or the tenant can terminate it at any given moment.

Final Thoughts on Home Rental Contracts

The purpose of having a lease agreement is to protect tenants’ rights, shield you from exploitative landlords, and contribute towards making your investment safe. Regardless of how flexible your tenancy terms might appear, just remember that there are some unalterable responsibilities imposed on both sides by law.

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