What Are Rental Agreement Letters?

A rental agreement letter is a formal written letter that property owners prepare to highlight the key terms and provisions of a rental agreement or contract. It is a document that must be developed along with the agreement itself since the letter is the short or easy-to-read version of the agreement. Rental agreement letters cover the main points of a rental that must be followed by tenants so they can continue the transaction that is acceptable to landlords.

According to Visio Lending, did you know that the top reason why renters move out is due to a new job (29.8%)?

Also, Porch reported that merely 61.5% of landlords trust their tenants in dealing with property maintenance.

Why Are Rental Agreement Letters Important?

Rental agreement letters play an important role in a rental transaction or agreement. In fact, reading it is a must before tenants even decide to step foot into a rented house, apartment, or any property. But why exactly are they essential? In this segment, get introduced to the reasons why a rental agreement letter is important.

Abridged Version of a Rental Agreement

The most notable advantage of a rental agreement letter is to create an executive summary of a rental agreement that is understandable to clients. A single rental agreement or contract can have lots of pages since it is a document that covers all the details of a rental. But in a letter, it needs not to be long as long as important parts are discussed. Most importantly, a letter is easy to read as it follows the standard format of how formal letters are written.

Prompts Parties to Keep Their Word

Writing the rental agreement down in a professional document such as the rental agreement letter is crucial so that the terms and conditions would be read, understood, and agreed upon by all parties involved. By just considering an oral agreement, there is a chance that a landlord might not keep one’s word or that a tenant may not pay according to the promised payment agreement schedule. Thus, jot down the agreement inside the letter and ensure that you ask for every party’s signature to keep their word.

States Every Significant Rental Agreement Provision

In case you easily forget about the stipulations of a rental agreement or you have overlooked any possible provision from the binding agreement, you can always use the rental agreement letter as your guide. The letter would cover all sorts of details from the rental scope, limitations, significant dates to remember, and even termination conditions. So don’t simply put every detail about the rental through word of mouth because writing it down is easier for reference, and you won’t even have to memorize the long provisions.

Covers Any Type of Rental

A rental agreement letter can be used for all sorts of rentals and not just the rentals for homes or apartments. So besides catering tenants, you may opt for other clients on different rentals such as a car rental agreement, parking area rental agreement, equipment rental agreement, and many more. And no matter what type of rental your letter covers, what is important is that you have specified the rental type involved in the rental agreement letter.

Begins a Healthy Relationship between Parties

When tenants and landlords meet, it is normal to have doubts in terms of trusting one another, especially on the very first day. And getting to know each other is crucial when parties are meant to set foot into an agreement. In fact, Porch.com’s research survey said that only 61.5% of landlords trust their tenants in handling property maintenance. So by providing a rental agreement letter, there is room to build trust by expecting each other to follow the stipulations written there.

The Basic Format of a Rental Agreement Letter

Are you curious as to what an average rental agreement letter looks like? It basically follows the standard letter format except the document is filled with lots of provisions coming from the original rental agreement. To be more specific, here are the elements expected from standard rental agreement letters:

Title: On the top center of a rental agreement, open the document with the complete title “Rental Agreement Letter.” This part of your letter is the first thing to be read so it makes sense to keep the title specific. In short, it sums up what your letter is about. And the title is usually presented in bold capital letters to have a striking impact.Return Address: What follows the title is the return address. This part highlights the rental owner’s name, address, and contact details. More so, you can insert your rental company letterhead in this section, if you have one, for branding and identification purposes.Inside Address: The opposite of the return address is the inside address. This part is where you identify the tenant or client information from the full name, address, and contact details. It helps to name the tenant in your letter rather than just mass-producing rental agreement letters with no specific names. Otherwise, the letter could belong to anyone.Salutation: To keep the rental agreement letter personal, add a salutation before stating the rental agreement’s provisions. You may name the client’s first name, last name, or both, as long as you prevent simply writing “To whom it may concern.” Also, be careful with the pronouns you use in case it will offend people.Introduction: The introductory statement comes next, and this part is where you write a proper statement that a rental agreement takes place. This part covers the basic topics to discuss the rental agreement such as the tenancy duration and payment schedule.Body Paragraphs: The meat of your rental agreement letter falls under body paragraphs. This part is where you begin inserting the many rental agreement clauses and provisions of your document. You can open about the rental agreement terms and conditions, liabilities, maintenance, until the termination of contract or agreement. What matters most is you can write about each provision in a smooth transition.Closing: The final paragraph marks your rental agreement letter’s closing statement. This part also summarizes what has just been discussed in your letter until a call-to-action statement follows. Tell your potential client what to do to start the rental.Signature of Parties: A complimentary close and the signature of parties would be the very last part of the rental agreement letter. Ensure that every party involved in the agreement signs the letter to clarify that the rental agreement starts taking effect during the effectivity date.

How to Create a Well-Made Rental Agreement Letter

After the introduction you received towards the rental agreement letter’s meaning, importance, and basic format, the last concern you should master is to follow the process of creating the rental agreement letter itself. Rest assured, you can achieve it in just five easy steps. And these are the steps to perfect your rental agreement letter:

Step 1: Study the Rental Scope, Terms, and Limitations

Don’t write a rental agreement letter without having thorough knowledge about your business. A detailed business analysis report of your rental business is critical so you can review your rental’s terms, conditions, scope, and other essential information. Remember that you will write about this data in your rental agreement letter and you can’t go wrong with what to input when you are wholly aware of the who, what, when, where, why, and how of your business.

Step 2: Access a Sample Rental Agreement Letter Template

Have you seen the list of rental agreement letter samples posted above this article? Take time to explore and pick your favorite template to work with. Then, the template serves as your guide to making a rental agreement letter without working from scratch. Remember that there are various examples according to the type of rentals you can choose from such as a room rental agreement letter sample, house rental agreement sample, termination of rental agreement letter by landlord, and lots more.

Step 3: Insert the Standard Rental Agreement Letter Format

Just like any formal letter, do not forget the letter’s standard format. Specifically, add the basic rental agreement letter format, which was discussed earlier from title to signature of parties. But if the original rental agreement you made has more provisions besides the standard elements previously discussed, then be sure to add those extra provisions as well in the letter. You may include more agreement clauses anyway if they are needed in your rental agreement.

Step 4: Maintain a Detailed but Concise Letter

Transforming your rental agreement letter into a detailed letter is commendable; however, don’t overdo it. Remember that the heavy information should be covered by the rental agreement. The letter simply introduces or summarizes the agreement. So the key is to balance the need to put enough detail but concisely. Be direct to the point and there is no need to insert flowery words and unnecessary statements. Focus on the important parts.

Step 5: Keep It Professional and Consider Fact-Checking

Although letters are less formal than agreements, bear in mind that maintaining a professional tone in writing is still necessary. You are running a rental business and being professional is a way for tenants to treat you seriously. And most importantly, review your overall work. There might be a bunch of errors you missed, and those mistakes could ruin your relationship with tenants later on. A full assessment of your rental agreement letter would make a difference.


What is the difference between a lease and a rental agreement?

Rental and lease agreements are often mixed up in terms of meaning. But they are entirely different when it comes to the agreement’s duration. Rental agreements are used for short-term agreements such as weekly or monthly transactions. Meanwhile, lease agreements are meant for long-term agreements such as transactions done yearly or more.

What are the common reasons renters move out?

Here are the top 10 reasons why renters move out according to Visio Lending:

  • New job opportunity (29.8%)
  • Life-chancing event (29.3%)
  • Personal change (27.8%)
  • Closer commutes (19.5%)
  • Negative interaction (19.5%)
  • Rent increase (18%)
  • Financial change (14.6%)
  • Unsolved maintenance (11.7%)
  • Recommendations (4.9%)
  • Eviction notice (1.5%)

Is a letter of agreement legally binding?

A letter of agreement is an official and legal document that discusses any transaction between parties. And this form of document is legally binding and can be written by anyone who needs to make an agreement letter.

A rental agreement letter is the best reference to familiarize the rental agreement conditions, needs, rights, and expectations from one party to another. So it only makes sense to put enough effort into making it such as using a professionally made and top-quality sample template. And using Sample.net’s collection of free editable and downloadable rental agreement letter samples, you are already equipped to develop the said document and start working on rental transactions. Optimize a template now!