49+ Sample Tenancy Agreements

What is a Tenancy Agreement?

A tenancy agreement is a written business document between a property manager and a renter. This type of contract specifies the terms and conditions of both parties regarding the renting process. It also documents the payment terms, the roles and responsibilities, and other essential rules set forth by the landlord that a renter should follow to be able to live in a rental property. Basically, the tenancy or rental agreement is the essential document that is put in place before a renter takes occupancy on a rental property. According to an article from Medium, one of the things that people should know about the tenancy agreement is that it will safeguard the rights of both the tenant and the landlord against any issues and misunderstandings that may arise. Hence, whether you are a tenant or a property manager, it is always essential to have a tenancy agreement first before anything else.

According to a report from Statitsa, 49 percent of residents living in rental accommodation in the United States are under 39 years old in 2019.

In 2019, 42 percent of tenants in the United States are living in single-family homes, as stated in a post from Statista.

Another report from Statista states that Lisbon has the fastest growing rental home market worldwide with 20.9 percent in 2018.

The Essential Elements of a Formal Tenancy Agreement

Writing a tenancy agreement is one of the important things that a property manager should consider once they have an open property for rent. One of the significant advantages of offering a tenancy agreement to tenants is that it sets out boundaries and makes everything clear. But before you create one, you need to learn the essential elements that should be present in a tenancy agreement. It is important to understand what makes such an important business contract first. Below are some of the necessary elements of a formal tenancy agreement. Here’s how.

Property Details. One of the first things that you will notice in any rental agreement is the property details. The property details should include the complete property address and other spaces if applicable. The tenancy agreement should outline this information so that it will be clear for both parties what’s included and what’s not.Parties Involved. Another basic element of a tenancy agreement is the parties involved. Any type of contract agreement should have the full names and other information of whoever is involved in the business transaction. It should be clear in the agreement who is who.Payment Terms. The next essential element that should be present in a tenancy agreement is the payment terms. This will set forth the amount of rent the tenant will pay, how the tenant will pay it, and when the tenant should pay it. In some cases, the payment terms can be negotiated so it is important to discuss this.Do’s and Don’ts. The do’s and don’ts in the tenancy agreement is important because it outlines terms a tenant should follow during his or her stay in the property. These terms may include pet policies, parking, smoking, alcohol use policy, etc. Termination Terms. Another essential element that a tenancy agreement should have is the termination terms. The agreement should outline the specific grounds that will terminate the contract. It should also include action plans on how to manage and resolve problems.

How to Write a Formal Tenancy Agreement

Whether you are managing a start-up or established rental property business, it is always important to provide a formal written business agreement like a tenancy agreement to your renters. Offering a tenancy agreement to your tenants shows that your business is professional and you take your role as a landlord or property manager seriously. However, a tenancy agreement has no standard format, as long as all significant information is there. So, you can always grab a ready-made tenancy agreement template that you can find in this post. These sample tenancy agreement templates are available for various rental purposes that you can customize and download anytime. Nevertheless, here are some simple and easy-to-follow instructions on how to make a formal tenancy agreement. Here’s how:

Step 1: Input Basic Information

Start writing a tenancy agreement by placing basic information, such as details about the parties involved and the rental property. In the upper part of the agreement, write an introduction which states that tenancy or rental contract is a written agreement between the tenant and the property owner. It is important to include full details of both parties, such as names, contact information, and descriptions. After that section, follow up on the information about the property. Include the unit and full address of the rental property. Include also the date when the tenancy agreement is written and signed, as well as the date when the tenancy will take effect. To make your tenancy agreement more flexible, you may leave enough blank lines where you will fill in the information.

Step 2: Specify Financial Details

After the introduction, you may now proceed to the next part which is specifying the financial details on the tenancy agreement. This information should include the amount the tenant will pay every month. The tenancy contract should also state the payment agreement between the property owner and the tenant, such as when and where should the payment be delivered. It should also be clear in the agreement the payment method that the tenant will have to follow, whether through bank deposit or cash. This section of the agreement may read “The tenant agrees to rent the property with a rental rate of $1000 per month, which will be payable on the 18th day of each month through bank deposit.” Nevertheless, make sure to inform your tenant with your payment terms before writing it on the tenancy agreement.

Step 3: Write the Tenancy Policies

Once you have outlined the payment terms on the tenancy agreement, the next thing you need to do is to include policies. These policies visitor or pet policies, installation policies, and penalties for late payments. State in the tenancy agreement if the tenant is allowed to have visitors or pets in the property. The business agreement should also have policies for property maintenance, such as who will pay for repairs and how quickly repairs should be. The tenancy agreement should also state the consequences of late rent payments. It is also possible to include other policies, such as smoking, parking, subletting, utilities, and other common area rules. Nonetheless, make sure that the tenants are well-informed of these policies and each policy should be clearly defined in the agreement to avoid disputes in the future.

Step 4: State the Termination Terms

Now that you have already added the tenancy policies, the next thing you should do is to state the termination terms of the tenancy agreement. The agreement should present the grounds that may result in termination of the contract. By this, you have to make sure that your termination terms comply with the state’s laws for termination of the agreement. The tenancy agreement should also display information about how to manage and resolve misunderstandings, whether to use a settlement agreement or bring disputes to trial. Nevertheless, this section of the agreement should be discussed and agreed upon by both parties.

Step 5: The Signing of Contract

When you finish incorporating essential information on the tendency agreement, finalize the process by getting the signature of the parties involved. The signing of the contract is one of the important steps in making any business contracts for business transactions. By signing the tenancy agreement, one may conclude that both parties have read, understood, and agreed to the terms and conditions written in the contract. Leave a space or blank on the bottom of the tenancy agreement where you will put the signatures of the parties involved. But before that, you should also consider having your tenancy agreement checked by a professional lawyer to ensure that the content is valid. Once you think the agreement is all good, then you can get it signed.

FAQs

Why is it important to have all the tenant’s names on the tenancy agreement?

Having all the names of the adult people living on your rental property is important so that you will hold them accountable once the breach of contract happens. If their names are not listed on the agreement, then you will not be able to sue them once they fail to pay the rent or if a dispute happens.

Is a tenancy agreement a legally binding contract?

Yes, just like any other business contract, a tenancy agreement is a legally binding contract agreement between a tenant and a property owner that presents detailed information about the rent.

What happens if a property owner fails to provide a written tenancy agreement?

One of the horror situations that may appear once a property owner failed to provide a tenancy agreement to his or her tenants is that a landlord will no longer have the authority to make deductions on tenancy deposits. A property owner will also have to undergo a standard court procedure once there are disputes during the transaction. Another one is that property owners will not be able to claim possession of the property.

Sure, a landlord or a property owner can do an oral agreement during his or her rental business transactions. But, the idea of having a tenant that may not follow the terms and conditions agreed can be scary. That is why every smart property manager should secure a written agreement to set forth terms and protect their assets and resources. Hence, a tenancy agreement is a great help. A tenancy agreement is one of the important business documents in the rental property industry that will protect both the tenant and the landlord’s rights. So, if you are planning to have your property rented, you should always consider having a professionally written tenancy agreement.