Planning to give a part of your home on rent? Or moving to a new home and don’t want to sell out the previous one? Whatever be the case, don’t forget to create a tenant agreement with the tenants based on the terms you both agree.

As the owner, it’s your responsibility to make the agreement brief and clear just so there won’t be any problem or misunderstanding in the future. The agreement should explain about the extent to which tenants can go to use the property.

What Is a Tenant Agreement?

A tenant agreement refers to a legal document between the property’s owner and a renter who is soon going to possess a part of the property on a temporary basis. Unlike lease, the tenant agreement is not intended for fixed terms.

Though, it identifies the parties, rental terms, amount of rent and the property so that everything remains clear right from the beginning. In this agreement, the owner is called the lessor while the renter is named as the Lessee.

As an owner, you will be having an explicit, written or implied tenant agreement that usually specifies rental terms, explained, regulated and monitored by the state law.

Most of the agreements are clear about the type of property, purpose of housing tenure, parking place for vehicles, portion or whole property, storage space and most important, for government, business, agricultural or institutional use.

Who Needs a Tenant Agreement?

Most of the owners, who either own property on lease or got it leased, are always aware of the issues and friction during the whole period. They even faced worse times in a landlord-tenant relationship, where both parties hold some grudges for each other.

So, there should always be a tenant agreement before handing out possession of the property temporarily. Not only will this agreement keep the owner satisfied about damages but will also facilitate the renter in case of any unlawful demand from the landlord.

This agreement allows renter to choose ownership of a part of the property for specified terms; while from the owner’s perspective, it works as the security when there is no security deposit from the renter.

When Do I Need a Tenant Agreement?

Typically, this agreement is on a monthly or annual basis and the cost of rent is also different with respect to the turnover cost.

If a tenant plans to leave the home before long-term lease, then it’s quite obvious that there will be penalties on the action and if the owner doesn’t find a replacement, then the cost of the agreed period will be at stake.

On the other hand, if a tenant lives more than the lease period, then there must be an agreement between the parties to renew the lease or else, it might convert into a tenancy at will based on the pro-rated monthly cost of previous year’s lease.

The advantage of a tenant at will is that if the landlord gives notice to leave the premises but the tenant doesn’t agree to it, he/she can initiate eviction proceedings right away.

Though, the landlord has to follow the local rules and avoid doing illegal actions like changing lock doors, removing personal belongings and forcibly ejecting the tenant. He/she will have to follow strict rules or else, would have to pay penalties against violations.

What Are Included in a Tenant Agreement?

According to the tenant agreement template, following are the important elements:

  • Name of the occupants: Names of all residents living within the premises in order to be certain about responsibility and accountability of the place.
  • Rental amount: This section will discuss the total rent and their installments. The date of payment, sum collected each month, consequences of not paying installment on time etc. are mentioned here.
  • Maintenance cost: The tenant agreement form should be clear about the maintenance expenses bored by both parties. Whether it is major expenses or minor, they have to be mentioned in the agreement so that there won’t be any confusion.
  • Security deposit:The agreement should be clear about the security deposit paid by the tenant.
  • Notice period and renewal: There should be a clause discussing notice period and renewal of the agreement.
  • Facilities provided: This clause is favorable for the landlord as it mentions all facilities provided to the tenant. In case of any damage, the tenant will have to bear the cost.
  • Clause of exit: The parties will have settle down penalties or other matters before leaving the premises.
  • Date and signature: The tenant agreement should have signatures of both parties along with the date it was made.
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Upon understanding the significance of a tenant agreement you can easily figure out how and what type of template you should be using. However, if you need help, CocoSign is available at your ease.


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