What Is a Rental Agreement?
A rental agreement is a type of contract made between a property owner and an individual or business who desires temporary possession and usage of the property. This is not to be confused with a commercial lease agreement as this is a mistake commonly made by most individuals. The main difference is that of the two, only a lease agreement has a fixed term on how long one is supposed to rent the property. So whenever you have a possible tenant and you want to make sure that he/she has the basic understanding of how your property should be rented, then make sure to prepare a rental agreement.
How to Write a Rental Agreement?
1. Clarify Who Is Involved
A standard rental agreement must be able to point out the names of those who are involved. What this is supposed to do is clarify which party is the renter and which one is the rentee. Aside from their complete names, you can also place their complete names along with any other personal information that you think is necessary.
2. Describe the Property
You are going to have to write a statement that provides a description of whatever property is involved in the basic agreement. what details you need to include will depend entirely on what that property is. For example, if what's to be rented is a piece of equipment, then the full legal description must contain its model number and its manufacturer. Just be sure to include enough information to make it clear as to what items are involved in the exchange.
3. Provide Payment Details
This is where you will need to write down how the rentee will pay the renter for whatever property is being used. If the payment comes in the form of money, then point out the exact amount that needs to be paid, when the payment has to be made, and the method and schedule of payment allowed. If it comes in the form of a promise of goods and/or services in return, then clearly point out what those are by providing clear descriptions of what they are and the quantity in which they will be provided in.
4. Describe How Damages Will Be Handled
The simple agreement must point out what should happen if any damages were incurred during the rental period. Make it clear as to who will be held responsible for paying for the damages, what these damages are and the consequences should the responsible party fail to pay for them.
5. Point Out Details on the Termination of the Agreement
Should either party wish to terminate the agreement, they must know how to do so legally. You will have to include a section that tells how either may do so while avoiding consequences. Be sure to provide a thorough explanation of how they may legally terminate the contract and include information on what the consequences are should they fail to follow proper procedures.