A Brief Introduction About Tenancy Agreement
A Tenancy Agreement is a legal document that is created between a tenant and his or her landlord. A tenancy agreement can be defined to be either oral or written, and its creation gives certain rights and powers to both the tenant and the landlord, such as the right to occupy the accommodation and the landlord to collect the rent in exchange for renting out the accommodation. The agreement gives certain rights to both – the landlord and the tenant, for example, the right to occupy the accommodation and landlord’s right to receive rent for letting the accommodation.
In this article, we will answer commonly asked questions such as what is tenancy, and help you understand further, the ins and outs of this agreement.
Who Takes the Tenancy Agreement – People Involved
This agreement is created between two or more individuals. The first party in the formation of this contract is the tenant, and the second party is the landlord who is the legal owner of the real estate and or property in context. In legal terminology, the first party is referred to as the tenant, the second party as the landlord and the contract is simply referred to as the Tenancy Agreement.
Purpose of the Tenancy Agreement – Why Do You Need It
The main purpose of this agreement is to establish a legal understanding between both the organizations and to make sure that the interests of the individual parties along with the collective are protected at all points in time.
Contents of the Tenancy Agreement – Inclusions
Parties Involved: In this legal agreement, there are usually two parties involved; the first being the party who is renting out his or her property and or real estate to an individual, the second party is the individual to whom the property and or real estate is being rented out to. In legal terminology, the first and second party are referred to as the Tenant and the Landlord.
Effective Date: This section of the agreement outlines the date from which this contract will stand legally binding and also the date on which the same can be dissolved.
Where does it Apply: This agreement is legally applicable within the boundaries of the state, city, or county where it was originally drawn at.
Types of Tenancy Agreement
- Assured shorthold tenancy (AST)
- Non-assured tenancy
- Regulated tenancy
- Company let
- Excluded tenancy (lodging)
- Assured tenancy
How to Draft the Tenancy Agreement
A Tenancy Agreement can be drafted by simply following the steps mentioned below.
Organize a meeting both the parties and discuss upon the terms and conditions of the agreement, such as the amount of time for which the real estate is being rented, the terms and conditions that both parties need to follow, and the number of funds that will be invested for the same.
Once both the parties have mutually agreed to all the terms and conditions, reach out to a lawyer and ask him to draw up an Agreement according to the specifications discussed.
Get both the parties to sign the contract and get it registered in a house of law as suggested by your lawyers.
While negotiating the formation of a Tenancy Agreement, it must be taken care that the individual interests of both parties must be addressed along with the collective cause for the tenancy lease.
[Also Read: Rental Agreement]
Benefits of the Tenancy Agreement
The most significant benefits of having a Tenancy Agreement are as follows.
The contract clearly outlines the individual responsibilities, duties, and limitations and therefore makes sure that both parties are well aware of them at all points in time.
This is document acts as legal proof and thus can be produced in court for future reference.
In the absence of a Tenancy Agreement, neither of the parties has legal proof of an understanding taking place between two entities and thus if the matter is ever brought to court, both parties stand to lose.
What Happens in Case of Violation
In the case of violation of a Tenancy Agreement(1), certain remedies come into effect, and in a few cases the contract is dissolved, and a new set of terms and conditions are agreed upon.
A Tenancy Agreement is created with the intention of mitigating the risk of a dispute(2), hassles, and any confusion that might arise in the future between a landlord and a tenant. Thus it is always suggested that tenants and individuals create this Agreement when there is a need for renting out a property and or real estate.