What is "Rental Agreement"?

A "Rental Agreement" is a legal contract between a landlord and a tenant which lists rights of the tenant to use the rental property for a certain time span. Also known as a lease, the rental agreement can either be a verbal agreement or written agreement. At the end of the given period, the tenant requires to return the use and possession of rental property to the landlord. A lease requires the tenant to pay a specified amount of money each month in return for the use of the premises. This payment is called rent which is fixed on the mutual consent of both landlord and tenant.

Provisions contained in a rental agreement are usually regulated by state law. Standard in all leases is the implied contract of enjoyment which gives the tenant the right to acquire the rental premises for a specified time period without interference by others, including the landlord.

Parties to a Rent Agreement

A rental agreement refers to a relationship forged between the landlord and the tenant. It is legally binding upon the parties. It may be brief, or it may have extra conditions or obligations. However, any changes or additions to a “rental agreement” should be maintained in writing. For a lease agreement, the terms of the lessee and the lessor when they enter into a lease agreement would include terms like the term of lease, deposit amount and monthly rentals.

Landlord
A landlord or lessor is the owner of the rental property or the agent of the owner of rental property. The landlord holds the right to allow a tenant to use and occupy the rental property or premises in exchange for payment of rent.

Tenant
A tenant or lessee is a person who holds rights to use and occupy the rental property in accordance to the rent agreement or lease. He/she needs to comply all the terms and conditions set out in the lease.

What Makes "Rent Agreement" Significant?

‘Rent Agreement’ contains landlord–tenant laws governing the rental of property. This contract provides a base to the legal relationship between a landlord and tenant. However, importance of rental agreement emerges from the fact that it determines the time and mode of payment of rent. It is either prepared in duplicate or its copy is given to the tenant failing which, the tenant would not be bound by the terms of the agreement.

The rental agreement also lays down the minimum period of notice for termination of the agreement. Except from the basic requirements, a lease may and provide for any mutually agreeable, but legal, arrangement between landlord and the tenant. The lessor should ensure the premises come back in the right shape in repossession.

• There has been no damage to the tiling, plumbing, flooring or electrification and the premises are in the proper condition.
• No major changes have been incorporated in the premises. If the lessee has made some changes, which are not acceptable to the lessor, the latter may ask him to undo the changes.
• In the case of leasing of furnished premises, the condition of the furnishings is proper.
• All the electricity and telephone charges have been taken care of till the specified date by the lessee at the time of re possession.

On satisfactory fulfillment of all these aspects, the lessor should offer the refund the deposit to the lessee offering vacant and peaceful possession of the premises.

The rental agreement or Tenancy Agreement takes the physical form of a ‘form’ which has to be completed, signed and dated by the tenant and landlord. There are leases and rental forms for renting, leasing and managing residential rental properties. Both the parties must have access to the document once it is signed.

The landlord should get the agreement registered. The landlord must give the tenant a duplicate copy of the rental agreement, failing which the tenant is not obligated to pay rent until the tenant receives a copy of the rental agreement.