Signing the lease agreement is one of the essential steps involved in the renting process. Before handing over your property to tenants, it is important to make them sign the lease document as this would serve as proof should a dispute arise during the duration of the lease. It also clarifies all the ‘rules and regulations’ of the property, so both parties are on the same page regarding all the do’s and don’ts.

What is a Lease Agreement?

A lease agreement is a legal document which contains the agreement entered by a tenant and a property owner. This document contains necessary information about the property and the responsibilities of each party, for this reason, it is admissible in court as a shred of evidence in cases of disputes. It is advisable that the terms are in writing so that there won’t be any misconception or argument throughout the lease.

While the lease agreement may seem to be in favour of the property owner, it is actually a two-way street as it also protects tenants. Preferental’s lease agreements, drafted by SSLR Inc. offers unique opportunities to add an addendum to the standard lease agreement, where the tenant also gets to voice his/her concerns or suggestions. When both parties sign the addition, it acts as a formal part of the agreement.

With the lease agreement, as a tenant, you are sure the rental property is reserved for you for as long as the duration of the lease lasts. The property owner does not wield power to evict you unfairly until the duration of the lease elapses. This also includes the sale of a property with an existing lease in place, the owner would have to sell the property with the tenants’ lease intact. Even if the new owner intends on moving into the property, they won’t be able to move in until the lease has expired, unless the landlord and tenant can come to some sort of arrangement and there is mutual agreement on ending the lease.

What should a Lease Agreement contain?

Due to the amount of importance that the lease agreement holds, there is some necessary information that it must contain. Some of the information includes;

  • The name, address, and description of the rental property.
  • The name and address of both the property manager and the renter.
  • The amount agreed upon as rent.
  • The responsibilities of the renter and the property manager.
  • The amount of security deposit collected.
  • The duration of the lease.
  • The date and schedule of payment — instalment payment or one-time payment.
  • The rental property rules.
  • The terms of renewal.
  • The conditions for termination.

Lease agreements should comply with the CPA (Consumer Protection Act) and be aligned with the PIE Act (Prevention of Illegal Eviction), to protect both property owner and tenant. Renewing your lease agreement annually is a smart move, this ensures that it meets the terms of new legislation or dispute trends.

Who should sign the Lease Agreement?

As with any other contract, a lease agreement is a legal document between two parties. This means that both parties should sign the deal to validate it. There are of course different scenario’s with minors, couples and families moving into a property, let’s have a look at the two common signatory set-ups:

  • Someone signs as surety — This happens when a third party — whether it is a company, a partner or a parent — agrees to pay the monthly rental on behalf of the tenant. In this case, the tenant will still sign the official lease agreement, but an additional surety form will be added as an addendum to the lease agreement where all parties, including the property owner, tenant and the third party, will sign in agreement. This way, you are sure there is someone you can summon in case of disputes, damages, or unreasonable excuses for late payment.
  • More than one tenant will be paying — In cases where the renter has a roommate or partner — say a couple — it is advisable to make both parties co-signatories to the lease agreement. This would increase your chances of getting the rent as at when due as they are both responsible for the rent.

When you choose to start your rental relationship well — with a substantial lease agreement — you eliminate countless headaches and struggles.