Leases are contracts that are usually documented, offering guidelines on the terms of agreements between landlords and tenants. Leases often bear the details of the parties involved and those of the terms abiding the agreement. Leases also help the landlord and the tenant to operate in a more benefiting environment through the agreements set.
Leases are a type of contract that specifies the obligations of a landlord and tenant. These contracts can be enforced in a court of law, so it’s important to read your lease before signing it.
The lease includes the address of the property, the identity of the landlord, the length of the agreement and the identities of those who must pay rent and keep up the premises. This prevents uncertainty from arising when several roommates share a dwelling or when the house or apartment is sold.
A lease helps the landlord and tenant manage their expectations by specifying the amount of rent and when it’s due. For example, if you are protected by a lease your landlord can’t arbitrarily raise your rent because he had to re-roof the property or put in a new heater. Similarly, the lease should define the security deposit and any other fees or conditions the landlord might impose, such as a no-pet clause.
Someone who is looking for rental housing may never have heard of a lease guarantor and for a lot of individuals and households, the idea of having a lease guarantor is not relevant. A rental agreement is most often made between two parties: the landlord and the tenant or tenants. However, in some cases, a lease guarantor acts as a third party to help provide security for the landlord in terms of the rental agreement.
What Is a Lease Guarantor?
The lease guarantor in a rental agreement is someone who signs their name to the contract and agrees to pay if the tenant is not able to pay the rent. Specific clauses of the lease or rental agreement will outline the responsibilities of the lease guarantor, when payment is to be made, and when these responsibilities will become relevant to the agreement. Generally, after a landlord contacts a tenant for payment, he or she will initiate a specific time frame for payment from the guarantor.
Content of a lease agreement:
Contents of a lease agreement would be different for different types of leases. On the basis of different dimensions, there can be different leases like finance lease and operating lease, direct lease and sale and lease back lease, single investor and leveraged lease, and domestic and international lease. Contents of a lease would also depend on the industry and the asset under review. A residential property lease, plant and machinery lease, a car lease, or music system lease will be different because the asset involved is completely different from each other in terms of its importance and costs. For a lease to be complete there are certain things that it should never miss.
Although following points will cover all the typical clauses of a lease agreement, it is not an exhaustive list.
Particulars of the Parties: Lessor and Lessee are required to state clearly, their names and addresses. Third party information should also be included in case of leveraged lease, tripartite agreement etc.
Description of the Asset: Name and identification of the asset with its information on economic or domestic usage. Name of the manufacturer, capacity etc in the case of a big plant or machinery. Complete address and covered area in case of a residential property.
Primary Period, Effective Date and Renewal: Period of the lease should be mentioned in this clause with its clause on renewal after the primary period. The effective date and time of the beginning and ending of the lease agreement to be written here.