Tenancy Agreement FAQ
- The Tenancy Agreement
- Assured Shorthold Tenancies
- The Parties
- The Premises
- Tenancy Agreement Term
- Security Deposit
The Tenancy Agreement (Top)
Q: What is a residential tenancy agreement?
A: A residential tenancy agreement is a legally binding contract made between a landlord and tenant. The tenancy agreement gives a tenant the right to exclusive use and enjoyment of the described residential property in exchange for money paid to the landlord. Additionally, the tenancy agreement outlines the rights and responsibilities of both the landlord and tenant during the tenancy agreement term. LegalContracts provides a written residential tenancy agreement.
Q: Why isn't an oral tenancy agreement sufficient?
A: The problem with oral tenancy agreements is that they can be difficult to enforce. If a dispute arose, a court would have to hear evidence and decide whose version of the truth to accept. If there is a written agreement, courts will generally be obligated to uphold the terms of the written agreement even if they don't agree with them.
Q: What is addressed in a residential tenancy agreement?
A: A residential tenancy agreement typically addresses the following:
- the type of property being let;
- the address of the property being let;
- the term of the tenancy and whether the tenancy is fixed or periodic;
- the amount of rent payable, how often and when the rent should be paid; and
- the provisions of any security/damage deposit.
- taxes that are payable by the tenant;
- landlord improvements and signing incentives;
- tenant improvements and signing incentives;
- landlord and tenant repairing obligations;
- who will pay for what utilities;
- whether the tenant can assign or sublet the property;
- notice provisions for termination of the tenancy; and
- insurance provisions.
Q: What makes a residential tenancy agreement different from a commercial tenancy agreement?
A: A residential tenancy agreement is a tenancy agreement for your home. Governments have recognised the sanctity of the home and have extended increased protections to tenants by enacting laws that provide a minimum set of rights for tenants. Tenants cannot contract out of the rights contained in these laws.
Q: What is a Statement of Tenancy Terms?
A: A Statement of Tenancy Terms is a form that sets out all the major terms contained within the tenancy agreement. The form must be given to the tenant within 28 days of the start of the tenancy agreement. LegalContracts provides a Statement of Tenancy Terms which can be filled out by the landlord.
The Parties (Top)
Q: Who are the parties to the tenancy agreement?
A: The parties to a tenancy agreement are the landlord and the tenant. The landlord owns the property and allows the tenant to use the property in exchange for monetary payments called rent.
Q: What is a "resident landlord"?
A: In general, resident landlords are landlords whose only or main home is in the same building as the house or rooms which the tenant is renting.
Q: What are the landlord's obligations?
A: The landlord's obligations are defined by the terms and conditions contained in the tenancy agreement and the laws specific to where the property is located. The most important obligation the landlord has is to allow the tenant peaceful enjoyment of the property.
Q: What are the tenant's obligations?
A: The tenant's obligations are defined by this tenancy agreement and the laws specific to where the property is located. The most important obligations of the tenant are to pay rent on time and to not cause damage to the premises.
Q: What happens if I breach a term of the tenancy agreement?
A: If you breach a term of the tenancy agreement you are responsible for correcting it. If you are the tenant, this may involve you paying money to fix any problems caused by yourself or your guests. If you do not voluntarily pay to correct the breach you can be sued for damages sustained as a result of the breach or even possibly evicted by the landlord.
Q: What is a guarantor or surety?
A: A guarantor or surety is a person who agrees to pay any losses directly to the landlord should the tenant be unable to pay the rent, or otherwise breach the tenancy agreement.
The Premises (Top)
Q: Is the property an HMO?
Note: Family members include partners, same sex partners, parents, grandparents, children, stepchildren, foster children and adopted children, grandchildren, brothers, sisters, uncles, aunts, nephews and nieces.
Q: Who can live in the premises?
A: Only tenants and people listed as occupants may reside in the premises. The parties must agree to change the people listed as occupants or tenants. Children born or adopted while the tenant lives in the premises are automatically added to the tenancy agreement as occupants. Also, there may be laws which restrict the number of tenants/occupants in the premises if that number violates local health or safety standards for housing. Health and safety standards are typically expressed as 1 person per X square feet. The standard varies from jurisdiction to jurisdiction so if you are concerned, check with your local housing authority.
Tenancy Agreement Term (Top)
Q: Which tenancy agreement term should I use?
A: LegalContracts allows you to choose from several different types of tenancy agreement terms.
- Fixed End Date
- A tenancy agreement with a fixed end date gives certainty of term for both the landlord and the tenant. It specifies the exact day the tenancy will end. The advantage here is that neither party has to give notice to terminate the tenancy agreement; it simply ends on the specified date. In a fixed end date tenancy agreement the landlord cannot increase the rent, or change any other terms of the tenancy agreement unless he specifically reserves the right in the agreement and the tenant agrees to the changes. If the tenant remains past the specified date the landlord can either accept rental payments and have the tenancy agreement continue as a month-to-month tenancy with the same rules as the expired fixed end date tenancy agreement, sign a new tenancy agreement, or start eviction proceedings against the tenant.
- Fixed Number of Weeks/Months/Years
- A tenancy agreement for a fixed number of weeks/months/years gives a start date for the tenancy agreement and the number of weeks/months/years that the tenancy agreement will run. (for example, the tenancy agreement could start on September 1, 2005 and then continue for a period of 18 weeks/months/years). The advantage here is that neither party has to give notice to terminate the tenancy agreement; it simply ends on the specified number of weeks/months/years. In a fixed term tenancy agreement, the landlord cannot increase the rent or change any other terms of the tenancy agreement unless he specifically reserves the right in the agreement, and the tenant agrees to the changes. At the end of the 18 weeks/months/years, the landlord can either accept rental payments and have the tenancy agreement continue as a weekly/monthly/yearly tenancy with the same rules as the expired fixed end date tenancy agreement, sign a new tenancy agreement, or start eviction proceedings against the tenant.
- A weekly/monthly/yearly tenancy agreement with automatic renewal (a periodic tenancy) will continue so long as neither party wishes to terminate the tenancy agreement. To terminate the tenancy agreement the landlord and tenant must give notice of their intention to leave as specified by statute. A landlord can raise the rent, or change the terms of the tenancy agreement in these types of agreements by providing proper notice as required by statute. At the end of the notice period the tenant must move out or the landlord can start eviction proceedings against them.
Q: How much notice do I need to give to terminate a tenancy?
A: Usually, under a fixed term tenancy, neither a landlord nor a tenant can give notice to terminate until the term has expired (unless one of the parties has made a substantive breach of the agreement). For periodic tenancies, there is a legal minimum notice required by most jurisdictions. The tenancy agreement can specify a period longer than the legal minimum. The tenancy agreement cannot specify a period shorter than the legal minimum. If it does, the legal minimum notice will be implied into the tenancy agreement.
Q: What is notice to enter?
A: A landlord does not have the right to enter the let premises unless there is an emergency, for example a fire or gas leak, or he/she gives the tenant proper notice as defined by statute. So long as the proper notice is given, a tenant cannot refuse entry to a landlord.
Security Deposit (Top)
Q: What is a security deposit?
A: A security deposit is a sum of money the tenant pays to the landlord to guarantee that the tenant will fulfill all obligations under the tenancy agreement. The landlord holds the security deposit for the term of the tenancy agreement to ensure that the tenant does not default on the terms of the tenancy agreement or otherwise damage the property. Should the tenant damage the property (normal "wear and tear" excluded) or if the tenant has not paid rent, the landlord is entitled to recoup the debt from the security deposit. Usually the tenant must provide the landlord with the security deposit at the start of the tenancy agreement. At the end of the term, the tenant will receive the deposit back minus any deductions for repairs/restoration.
Q: How much can the security deposit be?
A: This is governed by statute and may differ from jurisdiction to jurisdiction. The amount that can be charged is typically not more than the amount of two months rent for an unfurnished property, or up to three months rent for a furnished property.
Q: When can the landlord deduct from the security deposit?
A: The landlord can deduct from the security deposit when the tenancy ends and the tenant owes the landlord money for either unpaid rent or damage to the premises. The landlord cannot deduct for reasonable wear and tear on the premises (i.e. wear and tear that occurs just from living in the premises). The landlord can deduct for stains on the carpet or countertops, large holes in the wall, and missing appliances and other such things that are beyond reasonable wear and tear.
Q: What is an inspection report?
A: Prior to moving in the tenant and the landlord should walk through the premises and write down any existing damage. This written account is called an inspection report. The landlord and tenant should both get a copy of this report.
Q: Why do I need an inspection report?
A: An inspection report will help prove what damage was or was not caused by the tenant for the purpose of deducting any damages from the security deposit.
Q: What is an Inventory of Furnishings?
A: An Inventory of Furnishings is a form similar to that of an inspection report but sets out the condition of all the furnishings only. The form must be provided with the Statement of Tenancy Terms. The form should be checked, agreed and signed by the landlord and the tenant and a copy given to the tenant free of charge. Any existing damage should be clearly noted. You may wish to take photographs of valuable items. A proper inventory can help avoid disputes, particularly those involving the return of deposits at the end of the tenancy.
Q: Why do tenants need insurance; doesn't the landlord already have it?
A: While the landlord typically has insurance, it only covers his/her property and liabilities. If the tenant wants coverage for his/her personal belongings or negligence, the tenant will need renter's insurance. The tenant should discuss what type of insurance he/she wants with an insurance agent.
Q: What is an assignment and how does it differ from a subletting?
A: Assignments and sublettings both occur when the tenant gives his/her rights under the tenancy agreement to a third party. The landlord typically cannot block an assignment or subletting without a valid reason. An assignment occurs when the tenant gives to a third party all of his/her remaining rights under a tenancy agreement for the entire term of the tenancy agreement. The original tenant no longer has any rights in or claims to the property. If a tenant assigns property, he can no longer be sued by the landlord, and cannot sue the landlord as all his/her rights are transferred to the third party. In a subletting the tenant can transfer a portion of the let space (e.g. a room in a house) or a portion of the tenancy (e.g. for 5 of the remaining 6 months of the tenancy agreement) to a third party. The original tenant retains his/her rights in the property. The original tenant can still sue and be sued by the landlord for tenancy agreement violations.
Q: What are signing incentives?
A: Signing incentives are bonuses the landlord gives to the tenant, typically for either signing a tenancy agreement or signing a fixed term tenancy agreement. They may include free month's rent or a rent decrease for the months of the fixed term tenancy. If the tenant breaches the tenancy agreement he/she typically has to pay back these incentives.