Don’t rent from a friend without a proper lease
Whether you’re a landlord or a tenant, you should always make sure your rental agreement is in writing – and this is doubly important if your agreement is with a friend or family member.
An oral agreement is of course binding and enforceable, notes Berry Everitt, CEO of the Chas Everitt International property group, but it is difficult for either party to actually prove the terms of such an agreement, so it is much safer for all concerned to have a written rental agreement – or lease – and prevent confusion, misunderstandings and hurt feelings which could cost you a friendship or cause a family rift.
“The last thing you want is to end up in a bitter argument with your brother in-law about whether the rent you pay for his garden cottage includes lights and water charges, for example, or a fight with a friend about the damage done to the flat he rents from you.
“Rather keep things businesslike and have a written lease which clearly sets out all the terms and conditions of your agreement, and all the rights and responsibilities of each party.
“Landlords should also obtain written permission to do a full credit and reference check on any prospective tenant – even if they think they know the person very well. It is much easier to turn someone down at the outset than have to go through the time-consuming, costly and often hurtful process of evicting someone who has defaulted on your rent.”
Standard lease documents, he advises, usually contain at least the following information:
* The contact details of both landlord and tenant, including everyday and emergency phone numbers;
* The address and description of the rental property;
* Details of any deposit required, the monthly rental amount and the duration of the tenancy;
* Landlord and tenant responsibilities and requirements;
* The procedures and notice required to cancel the lease or renew it; and
* A list of existing property defects, compiled at a joint inspection of the rental property, and signed by both parties before the tenant takes occupation.
Everitt says that for the sake of clarity, the lease should also detail what is to be done with the deposit a tenant pays. It should be paid into an interest-bearing account, for the benefit of the tenant, for the full duration of the tenancy. At the end of this period, the tenant will be owed the full deposit, as well as interest earned. The cost of repairing any damage the tenant might have caused to the property can, however, be deducted, as can any outstanding amount of rent the tenant owes to the landlord.
ISSUED BY CHAS EVERITT INTERNATIONAL