Sunday, August 30, 2009

Benefits Of A Tenancy Agreement

By James Harrison

Once the owner and the tenant come to a mutual decision, they have to sign an important piece of agreement, which is known as the Tenancy Contract. The Tenancy Contract is the pact signed by both parties, one being the tenant and the other being the owner of the property. This document allows the tenant to stay at the property of the owner and gives the owner the right to receive the payment for letting the tenant to reside at his property.

The contract is signed as a legal formality and is a proof of the tenancy, in order to avoid any disputes between the parties after the property has been occupied. The tenancy agreement can be both oral and written. However, it is advised to have it written, since the oral agreement results in many arguments and clashes, as it cannot be verified. As a written document, the contract is more authentic as a proof of the consent. In case of problems, you can easily approach to the authorities with the agreement.

The contract for the tenancy should follow certain guidelines. It should be designed as per the rules imposed in a country. It will not be any good if it does not focus on all the legal formalities. Both parties are eligible for certain benefits, if they design the agreement as per the law of the country and are accountable as well in case of violation.

Each point of the tenancy contract should be clearly mentioned separately in points to avoid any misunderstanding in the future, which in the end will be signed by both parties, proving their consent. A third person, who acts as a guarantor should be present at the time of the agreement, since he will be responsible for making sure that every month's rent is being paid as per the defined time line and due dates. The starting and ending date of the tenancy should be clearly mentioned in the contract as well.

The amount of rent that is to be paid by the tenants each month should be stated in numbers as well as in words for the purpose of clarity. The date on which the tenant will have to pay the rent each month should also be included in the treaty. Besides, there should be an affirmation of the deposit held by the landlord. It also should be written in both words and numbers.

A Tenancy Agreement must comprise of the method of rental payment by the tenant i.e. whether the tenant is supposed to pay rent directly to the landlord, through his agent, by postal order, or should it be in cash form or cheque. All these details should be mentioned clearly and vividly in the written record.

Other important details and points, such as the tenant being responsible for paying all utility bills on time, paying for the reconnection of any certain facility, if it is disconnected etc. are must to be mentioned in the agreement. The agreement will also contain the point stating the tenant's duty to maintain the house in a good condition and not using it for any illegal purposes. Another point will be stated about the owner of the property to be responsible for paying all the refurbishment and repairing charges, the property's insurance and the taxes.

The tenancy contract proves to be a record of all mutual agreements decided by both parties, and hence, they are bound to abide by it in order to avoid any disputes.

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