Lease Agreement for a Room Explained
A lease agreement form for renting out a room is a legally binding document between a landlord and a tenant. Usually, the tenant will occupy just the available room in the landlord’s house, though they may also share common living areas in the rest of the dwelling as well as utilities. While a landlord is not legally required to sign a lease with a tenant in return for them paying rent, the lease will come in handy should any dispute arise between both parties.
A landlord will use the lease to stipulate the rent amount, due date, amount of any and all fees associated with renting, including utilities, and other pertinent information relating to the rental of the room . To protect themselves, the owner must include any rules they want their tenants to know. For example, the owner might state that the room costs $300 per month, while utilities should cost an additional $50 per month.
The lease will usually contain other information, such as the contact information for the landlord, the security deposit amount that should be paid before the tenant moves in, the start and ending date of the tenancy as well as when the landlord or tenant can give each other notice to end the agreement. The landlord usually provides the notice to the tenant when they have a good reason, such as when the tenant stops paying rent.
If you need a lease agreement form for your room rental business, we offer templates you can download.
Important Components of a Room Rental Lease Agreement
The room rental lease agreement is an essential document in any rental arrangement and can serve as a protection for both landlord and tenant. The lease agreement legally binds the landlord and the tenant to follow the terms and conditions set forth in the document. Below are some important aspects that need to be included in a basic lease agreement for renting a room.
Personal Information The personal details of those listed in the lease agreement are vital to include. This should consist of the names of the lessor and lessee as well as the full addresses and other means of contacting the tenant(s). Including such information protects both parties should a legal action need to be taken in the future.
Rental Terms Some of the more obvious aspects of a lease agreement include the rental terms such as the duration of tenancy, the monthly rent amount, the due date for rent (i.e. the first of every month) and rental period (i.e. monthly, weekly, etc.). However, other items such as where rent should be paid and what constitutes late rent should also be included.
Utilities Are any utilities included with the rent payment or would the tenant(s) be responsible for paying their portion of these items? Being up front about which utilities are the responsibility of the tenant(s) will serve everyone well in the future.
Payment Conditions Specifying in the lease agreement the methods of payment that will be accepted is important. This not only protects the landlord’s interests, but it also covers the needs of the tenant(s) as well. Can they pay by check, money order, credit card, PayPal or cash only?
House Rules Just as with a rental agreement for a house or apartment, house rules should be established. These can involve things such as smoking, drinking, play the televised sports games at a respectful volume, cleaning up after oneself and pets. Additionally, some landlords may require a security deposit payable after the lease is signed. Should that be the case, there should be the appropriate section in the lease agreement as well.
Legal Aspects of Renting a Room
Legal issues surround any lease agreement for a room, and you will want to pay attention to them before you rent out a room as well as when you ask a landlord to let you rent a room. You may want to get advice from a lawyer to make certain rental laws are being followed.
Rental laws differ by state and sometimes by city or county. Common rental laws govern things like how much notice a landlord must give a tenant before entering the rented premises and what must be done if the landlord wants the tenant to leave. Many states also have laws governing things like how high a security deposit can be or how high a late fee can be. You should study the laws in your state before deciding on terms in your rental agreement and before signing one that has been sent to you.
Most states give tenants certain rights, some of which cannot be taken away in a lease. Tenants always have the right to be free from any retaliation by the landlord. For example, they cannot be evicted because they complained to the city about safety issues in the building or the lease cannot be terminated because they are pregnant. Tenants also have the right to privacy and they have the right to clean and habitable premises.
Landlords also have to follow the law. They can’t discriminate based on race, gender or religion, for example. They must provide the required services such as heat and hot water. They are entitled to rent and can evict the tenant for not paying it. They can terminate a lease after giving the required notice, and they have the right to enter the premises at reasonable times. Depending on the laws in their area, landlords can also require certain disclosures of tenants, such as telling them if any chemicals were used to clean the room or if the building faces any environmental hazards.
Customizing a Room Rental Lease Agreement
Customizing a lease agreement template to fit the individual needs of the landlord and tenant may seem like a daunting task for the untrained eye, but the availability of various templates for different situations allows people to customize a document rather easily. Once the document that is required is identified, all that has to be done is to place the parties’ names, the subject matter (such as the room being rented), the rental term and any defaults or contingencies agreed upon in the body of the lease agreement. (If you feel uncomfortable creating a document that includes all the parties’ names, there is always an option to create an LLC to lessen liability.)
In most cases, it is advisable that the lessor adds contingencies to any agreement. Depending on the nature of the rental fees, a late fee provision and a returned check clause could be added . A move in and move out inspection could also be part of the lease. Many landlords also ask for first and last month’s rent up front and a security deposit, which would be added into the agreement. Whether or not the security deposit is refundable also needs to be addressed.
A few examples of contingencies and requirements that are often included in a lease agreement are the responsibilities of the landlord and tenant; terms and conditions of use (for example, the number of residents, whether pets are allowed, etc.); who is responsible for landscaping and maintenance; utilities; applicable laws and violations; restrictions (such as smoking or alcohol); whether additional tenants will be allowed in the unit of space; methods of rent payment; and whether a rental increase is applicable if the lease is renewed.
Common Pitfalls in Room Rental Lease Agreements and Tips for Avoiding Them
Common mistakes often occur during the leasing process that can lead to misunderstandings or even legal issues down the line. People leasing out a room may try to befriend their tenant too much by becoming overly lenient. While you don’t want to be harsh, it is important to remember that you are entering into a legal contract. Should you falter in this area, the outcome could be costly.
Some of the most common mistakes that landlords make when leasing out rooms include:
Not checking references When you seek out recommendations from previous landlords, you want to be sure that you are choosing the right tenant, so it pays to thoroughly screen references. Some landlords do not bother doing this because they need to lease out the room as quickly as possible. Skipping over this seemingly minor task can lead to more significant problems later.
Being unprepared Some people go forward with the leasing process without adding any specific terms and conditions to the lease. You must really think about all of the factors that pertain to your situation. Does work happen at certain hours? Is smoking permitted? Is a pet allowed? You should also add a cleaning schedule to avoid living in a filthy property.
Acting too friendly Acting too friendly doesn’t mean that you should be rude or harsh on your lease. It merely means that you don’t want to be too casual about the agreement either. You should be business-like when something goes wrong. You don’t want your tenant getting too comfortable or thinking that they can rest assured of things that are unclear in the contract.
Being quick to lease Renting out a room is a big decision. You shouldn’t be willing to lease your room out to anyone. Create a specific template for your rental, with terms that you will not budge on. Renting out your room to someone before all of the research is complete can be bad for business. You could end up leasing the room to someone who has a history of being late on rent, making too much noise or trashing the common area.
Keeping things too informal Whether renting out a room for school, professional or other reasons, it is important that you sign and date a written contract. It should include all important details and be signed, preferably by two or more witnesses. While you may try to do things the "friendly" way, it is better to leave nothing to chance. If it comes to an eviction, you will be glad that you took the extra time to ensure that everything was done properly. Save yourself the stress and trouble by doing it the right way the first time.
Resources and Samples of Room Rental Lease Agreements
A variety of resources and tools are available online to assist users in drafting a room lease. The following with brief descriptions.
Accommodation Association: The Accommodation Association provides comprehensive resources on the legal requirements for setting up lodger accommodation. Guidance is provided on a wide range of topics including tenancy agreements, rent increases, grounds for termination of tenancy agreements, and eviction processes. A downloadable free agreement is also provided on their website. Room leases , bonds and form NTC.pdf
QHAP: The Queensland Homes and Accommodation Providers website has a multitude of resources and links to assist landlords in drafting a room lease. Examples include a step by step guide to creating an agreement and an overview of what to cover in a bond. Users can also view a sample room lease agreement. Tenant agreement | Department of Housing and Public Works
Accommodation Association Victoria: This link provides a housing agreement for lodgers in Victoria. A short description is given outlining the use of this form. This form is free to download. Generic Lodging House Rooming House Lease – Victorian Government
Austlegal: Austlegal outlines the legal requirements for a room lease. In addition to providing links to free downloadable forms, Austlegal details the steps to be taken in the event of a dispute with a tenant. Austlegal creates a free form for issues regarding rent arrears which may be downloaded from its site. Rooming House Agreement Form for Tenancies – Aust Legal