Are you deliberating on renting out a room in your home? Before making that decision, it would be best if you first learn everything you can about room rental agreements. Right now, you might be asking yourself – what is a room rental agreement? How do I create one? Do I need it?
A room rental agreement is an official agreement between the owner of the room and the tenant looking to sublet or rent their room or apartment to another party. A room rental agreement can be made by the prime tenant to facilitate a good relationship between themselves and the person who will be renting the room. The primary objective of a room rental agreement is to encourage synchronization of what to expect along with the responsibilities of both parties by making things clear via a written contract.
Another key reason for making a room rental agreement is to make you feel secure enough to rent out a room in your home. At times you may be renting out to people who are not members of the same family and may not know each other. Knowing that you have a room rental agreement for each tenant, you are renting to would give you confidence that you have made clear both your duties and the tenant’s responsibilities. Lastly, having a room rental agreement would make it simpler for you to remove tenants who fail to pay the rent or who go against the rules set.
Why is a Room Rental Agreement Important?
The practice of renting or renting out a room in a home can be a huge task for both the owner and the tenant- if they don’t know the importance of having a rental room agreement. Drafting your rental room agreement template for use when you are looking to rent a room to a new tenant can be beneficial for both of you. Some of the benefits include:
- To make clear the legal rights of the tenant: Most tenants are often not aware of their legal rights, which leaves them at a disadvantage. All states have laws that govern the rights of both the tenant and the homeowners, but realistically, no one really finds time to read through these laws. Having a room rental agreement helps the tenant in understanding the procedure you will take should they fail to pay their rent. The room rental agreement ought to be made at the commencement of the lease period, in which the landlord and the tenant should come to terms with the obligations, legalities, and expectations involved in the whole process.
- To establish a legally binding agreement between the tenant and the landlord: before the commencement of the agreement, both the landlord and the tenant should sign a room rental agreement to establish the roles, responsibilities, and expectations. Consequently, they should also make sure that any concerns or issues that may have been raised by the tenant have been resolved. Sadly though, most tenants never ask for such agreements before renting out a room. It is necessary that you ask for the room rental agreement to have everything laid out to avoid unpleasant surprises in the whole course of the tenancy.
- To explain the procedure Involving Maintenance and Repairs: this section is very important and should be made clear in the room rental agreement. It should state the types of repairs and maintenance that should be paid for by the landlord and which ones are the tenant’s responsibilities. This distinction should be made clear- from simple and minor repairs to bigger and more expensive fixes. Utility bills are usually paid for by the tenant, while taxes and land fees paid annually are usually paid by the landlord.
- To have a sense of security: the tenant’s right to privacy is usually stated in the room rental agreement. Without it, the landlord might take advantage of them and be waltzing in the home at inopportune times, invading their privacy. Signing a room rental agreement enables both parties to be clear on the tenancy rules. This also ensures that both parties abide by the rules, thereby allowing the tenants to enjoy their renting experience and the landlord to feel safe, knowing that their rooms are adequately taken care of.
- To Set Up Terms of Rent Increase: rental charges are usually made in accordance with the country’s inflation rates. Except if otherwise stated and agreed upon in the agreement, this must be strictly adhered to.
- To set the rules govern the tenancy termination: The room rental agreement not only establishes when the tenancy will start but also clarifies when and how the tenancy will be terminated. In the case of a tenant failing to pay their rent, the landlord has the right to terminate the tenancy, but they should furnish the tenant with at least a two weeks’ notice.
Important Terms to be Included in a Room Rental Agreement
It is important for every landlord looking to rent out a room to know how to make a simple room rental agreement. Drafting a room rental agreement template is easy enough, so long as you know the basics and the key terms that must be included in it.
Below are key things to include in your room rental agreement:
The name (s) of the tenant(s) who will be renting the room
All adults who are involved in the tenancy must be included in the agreement. In the case of a family, all the adults must be included in the agreement. This makes each one of them aware of the agreement, therefore making them responsible for following all the rules of renting as well.
Limitations of the Tenancy
The agreement must clearly state that the tenant whose name appears on the agreement can occupy the room. This ensures that only those who have been included in the agreement can live in the property. This also enables the landlord to evict any tenant who goes against the agreement by allowing a relative or a friend to reside in the room without permission.
Terms of Occupancy
The terms of occupancy should be clearly stated in the room rental agreement, whether it is a short or a long-term rental agreement. Rental agreements imply that the duration can vary from months or years, depending on what the tenant or the landlord consent upon. The flexibility of these terms must be defined appropriately in the agreement and should be clear to both parties.
The amount to be paid for rent must be clearly stated in the agreement. Consequently, the date for payment and the mode of payment must also be specified. It is vital for the tenant to know the method of payment together with the penalties which will be imposed should they fail to pay on time.
Security Deposits and Other Fees
The amount the tenant is required to pay as a security deposit together with how it will be used and when and how it will be returned should also be included in the room rental agreement.
Arrangement on Repairs and Maintenance
To make sure that the landlord is protected from any liabilities, the room rental agreement should define the duties and responsibilities of the tenant with regards to repairs and maintenance. The tenant must always ensure that the room is in good, clean condition and promptly inform the landlord of any damages. Any renovations or adjustments that they need to make must also be discussed with the owner before they are done.
Owners Entry to the Property
The landlord will have to enter the room at some point to ensure that everything is as it should be. To avoid any issues and inconveniences, the terms of the owner’s entry to the room must be clearly defined in the room rental agreement.
Restrictions on illegal activities
To protect your property from unnecessary damages and prevent the tenant from conducting any illegal activities in the room, you should be clear on all restrictions which the tenant must avoid during the tenancy.
The room rental agreement should clearly highlight who will be responsible for the utility bills such as gas, electricity, and water bills. It should also state the consequences of failing to pay on time.
Is the tenant allowed to pack in the premises? How may vehicles are they allowed to park? The agreement should make this clear to avoid any inconveniences to the tenants.
Smoking and Alcohol
Most landlords do not allow tenants to smoke on the premises or host any parties that involve drinking and smoking. Make sure that you include this section in the agreement so that the tenant has a clear picture of what you expect of them during the tenancy period.
Rules on Pets
The room rental agreement must include whether the tenant can have pets in the rooms you are renting.
Other limitations such as rent control regulations, tenancy, and antidiscrimination rules, safety and health policies should also be included in your rental agreement
Free Room Rental Agreement Templates and Forms
Protect yourself and your tenant(s) with a professionally designed, well-thought-out room rental agreement. Why spend hours in building your room rental agreement from scratch when you can simply download a free easy to use customizable template from here?
Difference between Room rental agreement and Roommate agreement
A room rental agreement is an official agreement between the owner of the room and the tenant looking to sublet or rent their room or apartment to another party, whereas a roommate agreement, just as the name suggests, is a legally binding agreement between two roommates looking to live together.
Note that in a room rental agreement, the owner of the room is subletting or renting out the room to another party while in a roommate agreement, both parties will be staying in the same room/apartment.
Terminating the agreement
After the agreement has been signed and approved, the tenancy may be terminated only when either party gives prior and appropriate notice. The notice duration should, in most cases, correspond with the length of the tenancy period and rent payment frequency. In tenancies, where the rent is paid every month, the appropriate period of notice should be at least one month. In most cases, one month is considered as the minimum notice period.
Whether you are a landlord or a tenant, the status quo can instantly change without warning. Thus, it is important that the rental agreement anticipates what may happen in the course of the agreement. Ultimately, however, it is ideal for both landlords and tenants to have empathy for one another. Honest and clear communication is the key to coming to a rational settlement with fair outcomes for all parties involved, without things becoming ugly.
Is this agreement legally-binding?
Yes! A room rental agreement is legally binding. It is a legally binding/official contract between the owner of the room and the person looking to rent it.
What is the minimum period of the contract termination notice?
After signing and approving the agreement, the contract may only be terminated when either party gives prior and appropriate notice to the other. The notice period should, in most cases, correspond to the length of the contract duration and rent payment frequency. In tenancies, where the rent is paid every month, the appropriate period of notice should be at least one month. In most cases, one month is considered as the minimum notice period.