Most, if not all, renters have to sign a (rental) lease agreement for a specified period. Generally, leases are renewable at the end of the lease period depending on the willingness of both parties (landlord and tenant). Rental agreements may vary depending on the province or state but they are similar for the most part. Certain conditions such as managing sublets, giving notice, rent increases, etc. could differ across provinces or states. This post will touch upon some of the basics of such lease agreements and points to remember when signing one.
Irrespective of the presence of a written lease, tenants and landlords will still retain their rights and duties. However, as would be obvious, having a written agreement explains such matters clearly and avoids disambiguation. Typically, a rental lease agreement should cover items such as due date for rent payment, name of bearer of utility and other costs if applicable, and details about parking, pets, smoking, and who is responsible for maintaining the property. To elaborate, an agreement should include the following:
- Names of both parties (landlord and tenant)
- Location of the rental property
- Rent amount, stating clearly whether other expenses such as utilities, parking, Internet, etc. are included
- Rent due date
- Lease term
- Security deposit amount
- Termination notice period
- Restrictions such as no pets, no smoking, no parties after 11.00PM, no more than a certain number of residents, etc.
- Details about subletting, if applicable
- Conditions for termination
- Emergency contact details of both parties
Province-specific rental lease agreement forms can be obtained through the links on this CMHC page.
Some points to remember
Money matters. Ensure that details about late payments are included and check to see if conditions for security deposit deductions are mentioned. The agreement should mention what situations enable the landlord to withhold a portion (or all) of the deposit amount (such as damaged wall or appliance, accommodation not cleaned on date of termination, etc.). Normal wear and tear does not entail a deduction of the deposit amount but negligence (to maintain) by the tenant will do so. In addition, verify if there is a reparation (e.g. the tenant may have to pay the landlord for breaking a lease) clause and if so, determine if the amount is reasonable.
Pets. Even if pets are allowed, ask if there is a restriction on the number or size. There could be an additional damage deposit to cover for pets.
Maintenance. Usually, landlords take care of property maintenance and it is better to have it that way. Major maintenance work could be an expensive endeavor and the landlord could argue that the tenant, if responsible, did not maintain the property to the level expected. Even if the tenant is made responsible for some minor repairs, it is necessary to have the kinds of work defined clearly in the lease agreement to avoid problems later.
Subletting. If subletting is allowed, ask if the landlord will have to approve the next tenant. Finding a new tenant who satisfies both parties (present tenant and landlord) may be an arduous task; so, an agreement without such a stipulation may help.
Both parties have obligations under rental legislation. Withholding rent or locking a tenant out for any reason are not ways to solve a dispute. The provincial pages linked above will provide more insight.
Do you have any stories to share (as a landlord or tenant)? Do you think the lease agreement used was fair? If not, what do you think was unfair?
About the Author: Clark works in Saskatchewan and has been working to build his (DIY) investment portfolio, structured for an early retirement. He loves reading (and using the lessons learned) about personal finance, technology and minimalism. You can read his other articles here.If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).