If you’re living in an urban area, you know that buying a property is getting more expensive so most people, especially those who only earn less income and those who only work in the area but have a permanent residence far from where they work. If you’re lucky enough to own a property and you have extra rooms in your house that you don’t need, you can turn it into a business opportunity where you can earn extra income. You can rent out rooms in your house to tenants in need of a temporary shelter to stay. But before you scout for tenants, you need to familiarize yourself with how room rental or room tenancy works and how to create an agreement for it. This article will guide you on how to make a room tenancy agreement.
10+ Room Tenancy Agreement Samples
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What is a Room Tenancy Agreement?
A room tenancy agreement also called a room rental agreement, is a legally binding written document that lets private landlords allow rent out rooms to tenants in a property they own but do not live in. Sometimes, the landlord lives in the property but it is big enough to allow tenants to occupy other areas of the property. Most people renting rooms are students, young professionals, and couples who cannot afford to buy or rent a whole property, or people who work or have business in an area but live in another place. Sometimes it can be families who are temporarily renting while preparing their permanent residence or a group of friends who want to live together for financial convenience.
Details to Include in a Room Tenancy Agreement
- Information of the Parties Involved in the Agreement: Include the names, addresses, and contact information of the parties involved in the agreement. This will let the tenant know that they have a responsibility to follow when they are renting out a room on your property.
- Limitations of the Tenancy: The agreement must state that the room that will be rented by the tenant should only be occupied by them and the people they live with. You must get the names of the people allowed to live in the room to be aware of who is occupying the room. Include instructions that the tenant must ask permission from you first if they will be bringing other people to the room. If your tenant violates this rule, you have the right to give sanctions to them. You can also include other rules such as rent control regulations, safety, and health policies, and tenancy and antidiscrimination rules and laws.
- Terms of the Occupancy: Specify the terms of the tenancy, such as details whether the tenancy is a fixed-term rental or temporary. You should also mention how flexible the tenancy terms are. These details should be clear to both parties.
- Rental Fees. Indicate the amount of the rent, dates of when the rent will be paid monthly, and payment methods. Include details about late fees and how you will do with deal with them.
- Security Deposits and Other Fees: If you require a security deposit, include details about it such as the amount of the security deposit, how the deposit will be used, and when it will be returned to the tenant.
- Arrangement on Maintenance and Repairs: To protect your property, indicate the responsibilities of the tenant on how to maintain the room they are occupying and how they will do repairs if ever there are damages in the room.
- Owner’s Entry to the Property: To ensure that the rented room is in good shape and everything is in order, you conduct inspections. If you need to do that, include in the agreement that you will enter the room with permission from the tenant. Include other terms regarding this practice. This should be included so you can avoid issues regarding the privacy of your tenants.
- Restrictions on Illegal Actions: To make sure your property is safe and secured, especially the room being rented from getting destroyed, you can add restrictions in the agreement such as disallowing illegal activities being done by the tenant in their room.
- Renewal of the Tenancy: Lastly, include the terms and conditions of how the tenant has the privilege of getting a renewal on the tenancy of their room. Explain that they have to follow the rules you’ve set and comply with everything written on the agreement. You can also add that you allow the tenant to renew their lease at the end of the tenancy period if they want to.
Why are room rental agreements important?
There are a lot of reasons why making a room rental is important. Some of these reasons are:
- To clarify the legal rights of the tenant and the landlord
- To establish an official agreement between tenant and landlord
- To explain the procedures of repairs and maintenance
- To let both parties have peace of mind during the renting negotiation process
- To allow the landlords to create an appropriate inspection process at the agreed schedule
- To set up different terms of rent increase, if applicable.
- To clear up all details regarding the termination of the tenancy
What areas of the property will the tenant use?
That is entirely up to the owner of the property on what areas are the tenants free to use. But in most situations, the tenant has exclusive use of the bedroom they’re renting at the property and they can also access its other areas that are shared with other tenants such as common areas like kitchen, living room, and bathroom.
What are the different types of rental agreements?
The different types of rental agreements are:
When you’re done writing the agreement, make sure to review it first to see if there are any spelling or grammatical errors and inaccurate information that you may have included. Discuss the agreement with your client before you sign the contract. To help you get started making the contract, download our free sample templates above to use as your guide!
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