Room Rental Agreements Explained
A room rental agreement is essentially a contract between the landlord and tenant for use of the room. While the law does not require a written lease for renting a room, a rental agreement protects both parties in case either of the parties fail to abide by the terms. At a minimum, the landlord should include the names of the rental parties, the address, the rent amount, the frequency of rent payments, the security deposit amount and when it is to be paid, the kitchen and laundry usage terms and whether any utilities are included in the rent or whether they are to be paid separately. Basic terms like the responsibilities of the tenant for cleaning after use of the kitchen and laundry facilities are important and should be spelled out clearly. For instance, if the tenant is required to clean up after each use, the days the facilities can be used, and the times the facilities can be used should be detailed . In regard to the laundry, the tenants’ responsibilities for using the machines should also be detailed. If there is a basic housecleaning that must be done, such as taking out the trash, vacuuming the hallways and bathrooms, or mopping the kitchen and bathroom floors, those duties should be clearly laid out as well. Also, the policy on guests should be in the agreement, including how long guests can stay and if the tenant is responsible for paying their portion of the rent. There should also be a term on whether pets are allowed and if they are, a term on what damages the tenant will need to pay for if the pet damages anything. A final term to include is what happens at the time the tenant vacates the room, including the procedure for returning the key or keys.
Essential Components Of A Room Rental Agreement
When renting by the room, your rental agreement will differ from that of a standard lease. In addition to the age-old battle of rent price vs. rent duration, you should also address such difficult potential battles as cleanliness, smoking, overnight guests, and appropriate bathroom etiquette. No matter how good your first impression is of your potential lessor, having one bathroom is likely to stress even the best of relationships. Key elements you want to be sure to include in your room rental agreement are rent amount and duration, utilities, house rules, cleaning schedule, deposit, repairs and maintenance, parking, and termination. While this list may appear like a simple standard lease, the difference lies in the fact that you will have both professional and personal ties with your tenant. In other words, careful thought should be given to the agreement.
Legal Issues To Consider
In crafting a comprehensive room rental agreement, it is essential to review both landlord/tenant law and room rental law as applicable. Many landlords enter into room rental agreements without regard to specific legal requirements, but these agreements are contracts and governed by a host of contracting principles that vary by statute. Therefore, the parties must be aware of certain legal issues and statutes.
Most states have certain statutory requirements for rental agreements, such as requiring any landlord who accepts rents in advance to maintain a reserve fund to provide a portion of the rent should the tenant be unable to use the premises as agreed. Moreover, if the parties are not using legally compliant language in their rental agreements with respect to security deposits, landlords may be required to pay accrued interest on the security deposits held. Many states also have rules with the Local Department of Building Inspection, and other local governmental bodies, that will determine even if a rental agreement will be enforceable. For example, many municipalities impose basic rent control laws requiring landlords to provide notice to tenants prior to evicting tenants or terminating a rental agreement. In some cases, certain local laws related to rental properties may be superseded by state laws.
In addition to the foregoing, if a rental agreement is not in compliance with particular local, county, city, or county ordinances, the landlord may not be able to recover possession in an unlawful detainer action. For that reason, it is essential that landlords confer with counsel to ensure the rental agreement complies with any and all local, county, city, and state ordinances.
Finally, it is important for the rental agreement to comply with principles of contract interpretation, such as consideration, unconscionability, etc. If a rental agreement is unconscionable in nature, it may be found void and unenforceable.
This is merely a "short-stop" overview of some of the more pertinent legal issues involved in drafting a room rental agreement.
Helpful Hints For Drafting A Room Rental Agreement
A comprehensive rent agreement should clearly address each of the above considerations, but the use of a standard template agreement will not likely provide for all of them. Many landlords using a standard template find themselves needing to make special changes to the template to fully address their individual circumstances. One way to ensure that your room rent agreement covers all of your concerns is to have it drafted by an experienced attorney and/or broker familiar with the complex issues that must be addressed.
It is critical that the room rent agreement be legally reviewed and tailored to the specific issues for both the apartment tested and the landlord’s business.
Room Rental Agreement Mistakes You Should Avoid
It’s worth keeping in mind that when crafting a formal contract, it’s best to avoid any terms which lead to confusion or ambiguity, even if you think it could be inferred. If you struggled with the wording of a term, it’s likely the other party will struggle with understanding it, too. A room rental agreement is also a unique type of lease and there are common pitfalls to avoid:
Be clear on responsibilities for maintenance, repairs, and property damage: As the lessor, you may want to provide repairs as quickly as possible to retain a good relationship with your tenant and keep your property in good condition. However, tenants can sometimes get the impression that you’re responsible for all their maintenance needs, and it can set a precedent where you feel obligated to comply with every request. If you would like to be notified of repairs before you have to make them, as well as for issues like plumbing leaks, smoke alarms, burst pipes, etc., it’s best to use specific language to ensure you’re covered.
Allow your tenants to collect mail: While you may not wish for your tenants to receive packages or personal mail at your residence, it’s a requirement that they maintain a mailing address at the property for their Canada Revenue Agency tax returns, so stop giving them a hard time! They may also be worried about missing package deliveries while at your home.
Use a firm and concise writing style: Using a formal structure, complete sentences, and the third person will help you maintain a professional tone. Avoid slang or shorthand that will confuse your tenants and avoid using old terminology which may not be applicable today. In addition to the tenant and the landlord, also include a third party witness. Typed contracts are preferred, however if you must handwrite your room rental agreement, use blue or black ink.
Use a basic schedule or checklist and don’t pay movers using cash: Insufficient invoices can make the agreement invalid , so you should provide a schedule for payment. Whenever possible, use an approved form of schedule. When it comes to deposits, you must make sure all statements and deposit amounts are valid and not left up to interpretation for the protection of both the tenant and the landlord. Without a proper receipt and records of the transaction it may be difficult to recall how the tenant paid or how much was involved. If yourself or your roommate is already living in the home, don’t be scared to just wait for them to move out! Don’t pay cash for your legally meeting obligations to them or they may not leave on the anticipated date or may have never intended to leave at all.
Notice requirements may be difficult to comply with: Many landlords attempt behavior modification by increasing rental costs or other punishments when a tenant is showing bad behavior. This can be illegal in some jurisdictions. Give your renters a warning letter beforehand and clearly state the provisions of their lease that they are not complying with. (You can find this warning letter here.) When a tenant knows they are being monitored, they are likely to stop breaking a rule. If not, then you may be able to eject them without breaking the lease. You’ll still have to take them to court, but the easiest solution may be to simply allow them to leave. Again, be careful when using a lot of legal terminology and internal jargon in a room rental agreement, as it may instead give a judge ample room to deny your request for rent.
Deposits are not always monetary: If you know that the tenant will need more security than what money can provide, ask them to provide collateral in the form of an item, service, etc. There is no limit to the items that can be used for a security deposit, and these must be returned within 15 days of the tenant leaving the residence.
Amending An Existing Room Rental Agreement
It is also possible to amend an existing Room Rental Agreement. An amendment is a separate agreement that agrees to change the Rental Agreement already in place. The amendment must identify the Rental Agreement to be amended. The amendment should then state how the Rental Agreement is changed, if at all. If the Rental Agreement is not being changed, then the amendment should state the agreed terms. Both landlord and tenant must sign the amendment and keep a copy for their records.
If the Rental Agreement is to be changed, then the amendment must state how the Rental Agreement is being changed, when it is to take effect, and be signed by both landlord and tenant. Be certain that the amendment describes either the entire Rental Agreement or only the portion that is changing. Otherwise, there may be confusion as to what terms apply. Like the Rental Agreement, both landlord and tenant should agree on the terms of the amendment before signing. Once signed, both parties have agreed to the amendment.
Room Rental Agreement Forms And Resources
Room rental agreement templates can be found on the Internet from a variety of sources. It is best to go with a reputable source to prevent yourself from getting an agreement that isn’t acceptable in your state or province.
The Internet has many different options for a usable agreement including the following:
These are just a few of the places you can find a good room rental agreement template online. Many websites include tips for how to set rent rates and help you as a landlord decide which other details to include. You can find these on sites that sell spaces in bulk including:
The online resources listed here as well as finding a local rental agency are great ways to get your rental agreement off on the right foot. You want to have a clear understanding of the expectations between both you and your tenant and a fully worded agreement is one way to do this.