What is a tenancy agreement?
Tenancy agreements state how much the property will be rented for, any future damages that must be reimbursed to the landlord and also clauses about the landlord’s right to kick the tenant out when things go sour. In simple words, it is a legal agreement that should be signed in order to protect your property, your rights, as well as those of the tenants.
What information should a tenancy agreement hold?
1. Agreement of proper usage and subletting
First, you must explicitly state what the property can be used for. In most cases it can only be used for residential purposes as originally intended. This clause is the safety net to fall back on when you suddenly turn up at your property to find your property being misused, be it an unlicensed daycare centre or worse, a gambling den. It is also best to include that the tenant is not allowed rent out the property to another party (subletting) because if not, then they can try to circumvent your rules by using this tactic.
2. Maintenance responsibilities and fees
Maintenance is the second clause. Generally the landlord will have to maintain major components of the property, such as the roof, ceilings, walls, drains, anything that may affect the overall structure and value of the property. Tenants on the other hand, will have to maintain any fixtures that are subjected to wear and tear. Appliances and furniture (if provided), should also be the responsibility of the tenants, whereby repercussions or reimbursement should be paid to the landlord if the agreement is breached. It is also best to state which aspects or fees should be paid by both parties. The landlord will usually cover management fees of the property (if any) and the tenant is the one who should pay for the utility such as water, electricity, internet, etc. which have been utilised during their stay.
3. End of tenancy and the deposit
There are many stories of how tenants sometimes just pack up and leave. Most who do that often leave the property in quite a miserable condition, forcing you to possibly fork out even more money than what you were paid during the tenancy. Write a clause in the agreement stating that at the end of the tenants’ stay, the property must be returned promptly, and to its original condition. Keys are also to be handed over as soon as they can. It should also be stated that the tenants give at least 1 month’s notice should they choose to leave as well as what should happen to the deposit, such as being non-refundable should the tenants have left without notice, or being returned only after ensuring that the property requires no repairs or reimbursement fees from the deposit.
Additional steps and giving fair warning
Make sure to take photos before you even post your property up for rent. This will help you compare the condition now to the condition after the tenant has left. Clearly state in the agreement that if the tenant is unwilling to comply to the set agreements then you as the landlord will take it upon yourself to bear whatever cost or repairs necessary and that it will come from the deposit they handed over initially.
Remember that a tenancy agreement is meant to protect yourself and your property at the end of the day. Being wary and smart in this aspect can save you a lot of money down the line and avoid any misunderstandings.
(Written by: Andrew Soh, 1st November 2016)