No matter how much you trust your landlord, and how much your landlord trusts you, you need to have a signed contract when you rent a house. It can be in the form of a lease or a rental agreement, but in either case, it outlines the terms of the rental and gives both parties recourse should something go wrong. Let’s learn more about why it is so important to have a contract completed when you rent a house.
You may hear it referred to as the lease, a residential lease, or a rental contract. All three refer to the binding agreement you may with your landlord (the lessor). You, the tenant (the lessee), get to enjoy the residence for the length of time outlined in the contract, and the landlord gets a fee from you every month, unless other terms are worked out for things like quarterly payments, etc.
Typical terms are for one year from the date the contract takes effect, and that date is usually the first day of the next month after you sign the contract. If it takes effect in the month in which you sign it, that month’s rent will be prorated.
The contract will also spell out your rights as well as your responsibilities as a tenant. It also spells out the landlord’s rights and responsibilities. It will likely also address the governing law that comes from the jurisdiction where the property is sited. Those laws help confer the rights you have as a tenant. Your contract cannot restrict the rights given to you by the governing laws.
It also spells out what the property is that is being rented, where it is located (and often contains the specific address), whether you are responsible for any taxes and/or insurance, what utilities are included, and who is responsible for any repairs that need to be done. Your contract will also cover any requirements for terminating the contract – on both sides.
Some contracts may require a guarantor. This is a person you designate as the person who will pay your rent should you find yourself unable to do so. Almost all contracts will spell out the amount of the deposit you are putting down and what the terms are for you to get the deposit back when you move out.
The contract will also often list who will be living in the apartment with you, whether they are responsible for any payments or not. It will also specify what the terms are regarding pets, or if pets are even allowed.
So why can’t you just reach an agreement with your landlord over the phone or in person? A verbal agreement usually can’t be enforced by a court if there is a disagreement. Memories fade and details get lost, so the best thing is always to get things in writing. The court can do much more to enforce the contract when the judge can see it in front of them. The contract is binding on both of you.
Lastly, make sure that you thoroughly read and understand the contract before you sign it. If you wish, have a real estate attorney review it as well to ensure that it complies with the governing law.
Once you’ve signed the lease, you can move in and enjoy your new home!