Rental agreement
A rental agreement is a contract of rental, usually written, between the owner of a property and a renter who desires to have temporary possession of the property; it is distinguished from a lease, which is more typically for a fixed term. As a minimum, the agreement identifies the parties, the property, the term of the rental, and the amount of rent for the term. The owner of the property may be referred to as the lessor and the renter as the lessee.
There is typically an implied, explicit, or written rental agreement or contract involved to specify the terms of the rental, which are regulated and managed under contract law.
Examples include letting out real estate for the purpose of housing tenure, parking space for a vehicle, storage space, whole or portions of properties for business, agricultural, institutional, or government use, or other reasons.
Real estate rental
When renting real estate, the person or party who lives in or occupies the real estate is often called a tenant, paying rent to the owner of the property, often called a landlord. The real estate rented may be all or part of almost any real estate, such as an apartment, house, building, business office or suite, land, farm, or merely an inside or outside space to park a vehicle, or store things all under real estate law.The tenancy agreement for real estate is often called a lease, and usually involves specific property rights in real property, as opposed to chattels. In addition to the basics of a rental, a real estate rental may go into much more detail on these and other issues. The real estate may be rented for housing, parking a vehicle, storage, business, agricultural, institutional, or government use, or other reasons. Who: The parties involved in the contract, the lessor and the lessee are identified in the contract. A housing lease may specify whether the renter is living alone, with family, children, roommate, visitors. A rental may delineate the rights and obligations of each of these. For example, a "sub-let" to a stranger might not be permitted without permission of the landlord. This also applies to whether or not pets may be kept by the renter. On the other hand, the renter may also have specific rights against intrusions by the landlord, except under emergency circumstances. A renter is in possession of the property, and a landlord would be trespassing upon the renter's rights if entry is made without proper notice and authority.What: Rented real estate may include all or part of almost any real property, such as an apartment, house, building, business office or suite, land, farm, or merely an inside or outside space to park a vehicle, or store things. The premises rented may include not only specific rooms, but also access to other common areas such as off-street parking, basement or attic storage, laundry facility, pool, roof-deck, balconies, etc. The agreement may specify how and when these places may be used, and by whom. There may be detailed description of the current condition of the premises, for comparison with the condition at the time the premises are surrendered. Property may be rented furnished, unfurnished, or partly-furnished. Partly-furnished may mean that major appliances or "white goods" are made available but not tables and chairs.When: the term of the rental may be for a night, weeks, months, or years. There may be statutory provisions requiring registration of any rental that could extend for more than a specified number of years in order to be enforceable against a new landlord.How much: Rent may be payable monthly, annually, or in advance, or as otherwise agreed. A typical arrangement for tenancy at will is "first and last month's rent" plus a security deposit. The "last month's rent" is rent that has yet to be earned by the landlord. A rental agreement or lease may include a "rent review" clause which makes provision for the rental amount to be increased, the process for the landlord to provide notice of a rent increase and the options available to the tenant regarding acceptance or rejection of the proposed increase.
Deposit
The security deposit is often handled as an escrow deposit, owned by the tenant, but held by the landlord until the premises are surrendered in good condition. In some states, the landlord must provide the tenant with the name and account number of the bank where the security deposit is held, and pay annual interest to the tenant. Other regulations may require the landlord to submit a list of pre-existing damage to the property, or forfeit the security deposit immediately.Insurance
In order to rent or lease in many apartment buildings, a renter is often required to provide proof of renters insurance before signing the rental agreement. There is a special type of the homeowners insurance in the United States specifically for renters — HO-4. This is commonly referred to as renter's insurance or renter's coverage. Similar to condominium coverage, referred to as a HO-6 policy, a renter's insurance policy covers those aspects of the apartment and its contents not specifically covered in the blanket policy written for the complex. This policy can also cover liabilities arising from accidents and intentional injuries for guests as well as passers-by up to 150' of the domicile. Renter's policies provide "named peril" coverage, meaning the policy states specifically what you are insured against. Common coverage areas are:- Fire or Lightning
- Windstorm
- Smoke
- Vandalism or Malicious Mischief
- Theft
- Accidental Discharge of Water
Rental of personal property
The time use of a chattel or other so called "personal property" is covered under general contract law, but the term lease also nowadays extends to long term rental contracts of more expensive non-Real properties such as automobiles, boats, planes, office equipment and so forth. The distinction in that case is long term versus short term rentals. Some non-real properties commonly available for rent or lease are:- motion pictures on VHS or DVD, of audio CDs, of computer programs on CD-ROM.
- transport equipment, such as an automobile or a bicycle.
- ships and boats, in which case rental is known as chartering, and the rent is known as hire or freight
- aircraft, in which case rental is known as chartering, or leasing if the rental is longer term
- specialized tools, such as a chainsaw, laptop, IT equipment or something more substantial, such as a forklift.
- large equipment such as cranes, oil rigs and submarines.
- a deckchair or beach chair and umbrella.
- furniture
- designer handbags, jewelry, sunglasses and watches.
- electrical items such as washing machines
- rental
As seen from the examples, some rented goods are used on the spot, but usually they are taken along; to help guarantee that they are brought back, one or more of the following applies:
- one shows an identity document
- one signs a contract; any damage already present when renting may be noted down to avoid that the renter is blamed for it when the good is returned
- one pays a damage deposit
In certain types of rental on each occasion.
Signing out books from a library could be considered renting when there is a fee per book. However the term lending is more common.
Car rental
In addition to the above, a car rental agreement may include various restrictions on the way a renter can use a car, and the condition in which it must be returned. For example, some rentals cannot be driven off-road, or out of the country, or towing a trailer, without specific permission. In New Zealand you may have to specifically endorse a promise that the car will not be driven onto Ninety-mile Beach.There will certainly be a requirement to show a driver's license, and only those drivers appearing on the contract may be authorized to drive. It may include an option to purchase auto insurance, if the renter does not already have a policy to cover rentals—another important consideration for multiple drivers. Some agencies may even require a bond payable if the car is not returned in order, often held in the form of a credit-card authorization—voided if the car is returned per agreement. Renters should be advised about their responsibility for any parking or traffic violations incurred upon the vehicle during the rental period. There should also be advice on handling thefts, accidents, break-downs, and towing.
Further terms may include added fees for late returns, drop-off at a different location, or failure to top up the petrol immediately before the return.
Finally, there may be provisions for making a non-refundable deposit with a booking, terms for payment of the initial period, extended periods, and any damages or other fees that accrue prior to the return.
Specific jurisdictions
India
In India, the rental income on property is taxed under the head "income from house property". A deduction of 30% is allowed from total rent which is charged to tax.Italy
Italian rental agreements on real estate properties are not uniquely regulated by the written pact agreed by the owner and the tenant. Italian civil law requires a correspondence between the destination of use agreed by the contractual parties and the effective destination of use adopted by the tenant after his take of possession of the property. In case of relevant differences, the owner has the faculty to resolve the contract for grave non-fulfillment.If the owner does not opt for the express resolutive option established by law or by the contract, the contract remains in force and the civil judge is entitled by law to appreciate the effective use of the real estate, as well as the awareness and implicit tolerance manifested by the owner. The judge is entitled to determinate the new contractual agreement, making its clauses compliant with the effective destination of use of the property. The new import of the contractual obligation is usually recalculated in application of standard contracts defined by the association of the real estates' owners and lessees, both at a national and at a provincial level.