47+ Sample Basic Rental Contracts

What Is a Basic Rental Contract?

A basic rental contract contains the terms and conditions agreed by both parties, which involves the lender and the borrower, for renting out a property for a short term. One can see this contract as a blueprint where all the responsibilities of both parties are laid out for easy and clear comprehension as well as the essential clauses of a basic rental contract. Through a contract, the fulfillment of both the interests of each party is guaranteed. What makes a rental contract different from a rental agreement is that it is enforceable in court that in the event of any issues and problems between the two parties, they can further settle it in court. Additionally, rental contracts can be used for either commercial or non-commercial purposes.

Why Make Use of a Basic Rental Contract?

Renting things and properties nowadays are getting convenient, but with the absence of a basic rental contract between the two involved parties, things can get complicated. Rental contracts are instrumental in making sure that everything is in its place.

Disputes are relatively common among rental businesses, and these stem out from so many reasons. For instance, you rent out the spare room of your house without a room rental contract. For sure, a lot of unfavorable circumstances would happen. Your tenants might not pay on time, might stay for as long as they want, or even destroy your belongings and you will have difficulty in holding any liability against them. The list can go endless. To prevent any issues or problems from arising, you need a basic rental contract that will ensure peace between two parties.

If you are the lender, having a rental contract shows that you are not neglecting the properties you rent out and that you want to be taken seriously as the owner of such properties. If you rent out a residential property, you can set the boundaries that you want to exist between you and your tenants. It is in this way that rental contracts can effectively set the expectations that both parties can expect from each other. And when these expectations are not met by either or both parties, then any dispute that arises from it can be mitigated with the help of the signed rental contract. With a signed rental contract between the lender and the borrower, each party can feel relieved of the fact that no room is made for any possible disagreements down the road.

Choosing the Right Rental Contract Type

Dwelling and living spaces are not the only properties that people can rent and rent out. There are other properties such as an event venue, facilities, sports equipment, and means of transportation that can be rented and rented out. To know the best type of rental contract for your needs, you need to get familiar with the various types of basic rental contracts that will help you determine the suitable rental contract needed upon renting out various properties.

Apartment Rental Contract: As soon as apartment owners rent out an apartment, an apartment rental contract must be prepared to lay out the necessary terms to make the rental of the apartment official. This contract should indicate the necessary points that will secure the interests of both parties, and such points should be able to mitigate any possible disputes in the future. It is also important to note that the more clauses there will be in this contract, the lesser the chances of any disputes in the future.House Rental Contract: Statista reports that about 27% of Americans see renting homes as a more preferable option than buying one. That is why house rental businesses can flourish in the US rental market. However, renting out an entire house is more tricky compared to just renting a single room or an apartment since it’s bigger and may contain a lot of possessions to keep track of. That is why to secure your interests as the owner of the house, you would then need a house rental contract. Not only that since your tenants can also have the interests secured. With this type of contract, the relationship between both involved parties is clearly set, along with each party’s responsibilities.Equipment Rental Contract: Do you rent out your equipment as a business or even as a sideline? Whether you rent out bikes, speakers, or even party supplies, make sure you have an equipment rental contract. This rental contract type will help you in setting the specifics in detail, such as the amount to be paid, rental period, deposit and return fees, delivery information, and so on.Car Rental Contract: Instead of buying new vehicles, many would prefer to rent cars, and this is why car rental services are popular in today’s market. Marketwatch reports that the car rental market has the potential to have a Compound Annual Growth Rate (CAGR) up to nearly 15 percent five years from 2018. If you own a car rental business, see to it that you are keeping up with the continuous global growth of the rental market while you are securing your rights as well as your clients at the same time.Event Rental Contract: An even rental contract is used when a borrower rents space or a facility with the purpose of holding events such as weddings, anniversaries, birthday parties, and the like. This contract should clearly indicate the address of the event venue, the agreed rental dates and time, payment detail, and any other terms or expectations discussed and agreed upon by both involved parties.

Crucial Clauses of a Basic Rental Contract

While you can always make use of a ready-made basic rental contract template, keep in mind that there will always be some clauses that are not necessary to include. However, some items should always be found even in the most basic rental contract. Know these must-have clauses of a basic rental contract below.

Default Clause: Do you fear that your tenants would default on their rental payment obligations? Fear no more if you include a default clause in your rental contract. With this clause, you will have the right to terminate the contract once the tenant or the borrower fails to do their responsibility upon signing the contract, which is to pay the rental fees. You can further explain how eviction is done through this clause.Joint and Several Liability: In the event of any contract breach, the joint and several liability clauses will help in making sure that the involved parties are liable. With this clause in mind, both parties are already well-aware in advance that each of them will be held liable for whatever actions they do during the effectivity period of the rental contract. With this clause, rest assured that each party has independent responsibilities in terms of liabilities for whatever consequences that stem from an illegal action.Late Fees Clause: Even if landlords or property owners have every right to demand payment on the agreed-upon rental payment schedule, there are still some who are still hesitant when collecting rent. But if you want that your tenants or borrowers will get motivated on their own to pay what is due, then always include a clause that deals with late fees. With this clause, you can impose and specify a fine when tenants or property borrowers would not pay on time. However, ensure that you check your state laws first before including this clause in your rental contract. Some state laws specify the limit in terms of the late fee as well as the grace period. Additionally, this clause should always state that when tenants or borrowers can finally hand in money, the late fees will be prioritized. Severability Clause: Just when you thought that your rental contract is perfect, you’ll realize later on that there was a single illegal aspect that you missed correcting by accident. This is a normal circumstance since no one can predict the future, and no one can see the small changes that will happen along the way. But if you have included a severability clause, the rest of your contract’s content is still considered as valid and legal. Without this clause, your entire contract is already considered as enforceable.Subleasing Clause: When tenants rent a room of the house or the entire house to another individual, this is considered as subleasing. If the contract does not specifically prohibit subleasing, chances are, your tenants will do this as a way to make the rental payment less of a burden or as a way to earn some extra bucks. But if you outlaw this act, then see to it that your contract has this clause so you can penalize your tenants or make them pay a one-time fee and still have the sublessee undergo your tenant screening process.Renewal Clause: When it comes to renting, renewal is common. Both the landlord and the tenant should discuss whether there will a default renewal approach or not. But since change is inevitable and unforeseeable, there is always the possibility that one party will change his or her mind on renewal. This is when the role of a renewal clause will come into play. You may require tenants to provide a notice in case they no longer want to renew their rental contract.

How to Draft a Basic Rental Contract?

Once a rental agreement has been made, seal the deal with a rental contract that will establish the rental terms. That said, come up with a basic rental contract by following these easy-to-follow steps below.

Step 1: Consider the Use of Rental Contract Templates

If you need a rental contract as soon as possible, consider downloading and customizing a rental contract template. Instead of starting from scratch, you can hasten the entire process if you opt for a basic rental contract template that you can easily customize and incorporate your preferred details. That said, you may use the rental contract templates that we have here to get you started.

Step 2: Identify the Parties Involved

Indicate the identifying details of the parties involved which is the landlord or the lender and the tenants or the borrowers. On the landlord or lender’s end, including the address of the rental property (if it’s non-equipment), contact numbers, and email address. The same goes for the borrowing party.

Step 3: Discuss the Rent Details

For this section of your rental contract, you should be discussing the rental period, precisely the date when the rent starts and when it ends. This should also include the due dates and any late payment fees. This may also include the address where the tenant or the borrower should forward the rental payment or the late fees.

Step 4: Incorporate the Crucial Clauses

Even if you already have a template to aid you, it does not mean that its contents are already the endgame for the type of rental contract you are about to make. You would still need to customize some of its aspects to make it more suitable for your contract needs. Upon customizing, make it a point that you include the crucial clauses mentioned above which include the default clause, joint and several liabilities, severability clause, subleasing clause, and renewal clause.

You may add more, which is entirely all right since the more detailed your rental contract is, the lesser the chances of problems or disputes within the rental period. Just make sure that whatever you add will be helpful for the relationship between both of the parties involved.

Step 5: Proofread and Check the Contents of Your Contract

Before you have the contract signed by both parties, you must proofread and check the contents of your contract first before you do to avoid any problems down the road. Other than checking the basic spelling and grammar, make sure that you also check that the contents of your contract coincide with the laws in your area to make it valid and enforceable.

Step 6: Sign the Rental Contract

To finally seal the deal, both parties must sign to make the rental contract valid, legal, and enforceable. You don’t have to worry about securing witnesses or signing it in the presence of a notary as it is not required. However, if you want to make your rental contract even more secured, you can never go wrong if you wish to secure witnesses and sign in front of a notary.

It is only natural that you would want your interests protected when renting out your properties. And if you are the one renting, it is also equally natural that you would wish your interests to be secured as well. That is why it is important to have a rental contract that will ensure the rights and responsibilities of both parties. We suggest you check out and download the rental contract templates and examples that are compiled in this article just for you. Armed with the basic knowledge of creating rental contracts, you can now make one of your own and start building an amicable relationship with your clients or tenants today!