Room Rental Agreements Explained
Room rental agreements are literary documents that delineate the terms and conditions for the lease of a room from a landlord to a tenant. While similar in many ways to standard lease agreements, room rental agreements tend to cover less ground and tend to be less extensive than standard lease agreements. Room rental agreements may take the form of a verbal agreement, but as the old adage goes, having it in writing is always preferred. Although verbal agreements are often legally enforceable, written agreements make transactions much easy and create less room for error or misinterpretation. Having a comprehensive coverage of the terms and conditions of the lease can only help to foster a good landlord/tenant relationship.
A room rental agreement usually covers the length of the tenancy, the amount of any rent to be paid, the responsibilities of the landlord and tenant during the term of the lease, any deposits that may need to be placed with the landlord, and any penalties that the landlord may impose on the tenant in the event of a breach. For example, a landlord could hold back a portion or all of the stored payment funds in the event of a breach by the client, such as failing to pay a future balance, failing to leave the premises in the proper condition, failing to notify the landlord of a problem with the premises, etc.
Landlords may include provisions that place additional requirements on the tenant with regards to his or room use. For example, a room rental agreement may specify the types of activities that a tenant is allowed to engage, including having social functions, having overnight guests, excessive noise or disruptive behavior, etc. A room rental agreement may also specify requirements that a tenant may be required to adhere to such as keeping the room clean , keeping the landlord informed of any issues with the room (or building, if applicable), keeping the central air and water heater at a certain level, turning off lights at night, and anything else that may be of significance.
Landlords can also inscribe a "no pets" policy into a room rental agreement, especially if any of the following apply: (i) the landlord believes that having a pet in a building or on the premises will significantly increase the costs associated with owning the property, (ii) having a pet in a building or on the premises will significantly expose the landlord to liability or increase the likelihood of causing catastrophic harm to the premises, or (iii) there are already numerous dogs or cats in the complex or premises.
Landlords can also insert a clause into a room rental agreement that forbids smoking in the premises. Subsequently, landlords can indicate whether the breach of any of these provisions will allow them to terminate the lease. Generally, landlords must and should give tenants an opportunity to cure the defect prior to terminating the lease. After three, four or five attempts to cure the defect, depending on the severity of the defect or how often it has occurred, the landlord may be warranted in terminating the lease.
In the event of a dispute between the landlord and the tenant, many landlords will take the position that the terms and conditions of the room rental agreement are supreme. Thus, the more comprehensively a landlord structures the room rental agreement, the stronger their case will be in the event of a dispute. Of course, landlords may not be able to control the outcome of a dispute, but they can help align their interests through their room rental agreements.
Room Rental Agreement Essentials
When considering a room rental agreement, whether you are the tenant looking to rent a room or the landlord or property owner listing the room or space for rent, there are some key components that the rental agreement should cover. First and foremost, as it pertains to the landlord or owner, the rental agreement should clearly state the beginning and end dates of the rental term. Upon expiration of the term, the rental agreement should outline the next steps that must be taken prior to either renewing the room rental agreement or moving out of the rented room. An example of a room rental agreement for a situation where the rental term is twelve months can be found here. An example of a room rental agreement for a situation where the rental term is month-to-month can be found here. Another key component of the room rental agreement is the rental amount, which should detail how much the rental payment will be and when it is due, as well as what type of payment will be accepted (cash, check, credit card, etc.). Many room rental agreements require that first and last month’s rent be paid upon execution of the rental agreement. In addition to rental payments, the rental agreement should require the tenant to pay an amount to cover damages to the room and/or property, commonly referred to as a security deposit. The security deposit should state the amount, how and when it can be used, and conditions under which the security deposit may be withheld upon expiration or termination of the rental agreement. The rental agreement should also contain rules and regulations that the tenant must follow during their tenancy, as well as a procedure for notifying the tenant of any changes to the rules and regulations. As an additional note, the landlord or property owner may want to give the tenant a copy of the rules and regulations. There are many other components of a room rental agreement that are important, but the duration or length of the tenancy, the rental amount and security deposit, and the rules and regulations are the basic requirements of a room rental agreement. If the room rental is in California, there are certain rights and obligations that are generally applicable to both tenants and landlords and property owners.
Room Rental Legalities
All room rental agreements must comply with the residential landlord-tenant act promulgated in the state where the property is located. While the laws of every state vary, most jurisdictions have a variation of the Uniform Residential Landlord and Tenant Act (URLTA), which sets forth the rights and obligations of the landlord and the tenant in any rental relationship, including with respect to repairs, entry and evictions, in addition to any applicable state or municipal statute that further defines those rights.
While landlords have the right to agree with the applicant on just about any provision in the lease, the law will not honor any lease provision that attempts to waive any of those rights, and will often view it as a violation of the law to do so. For example, while you are free to obligate your tenants to obtain renters insurance to provide protection for their personal property, you cannot agree with your tenant in the lease to waive the obligation for the landlord to keep your buildings and improvements on the premises insured. In order to meet your statutory obligations, the lease must require the landlord to keep the building comprehensively insured.
Most landlord-tenant acts prohibit the landlord from taking a security deposit in excess of one month’s rent. Even if the lease requires a greater amount, the statute will presume that the security deposit was only one month’s rent, and may even strike out any provision that imposes a greater amount. Similarly, the act may place limitations on the interest accrued on the deposit and what permitted deductions may be made from it on termination of the lease.
The intent of these statutes is to afford protection to a tenant against unfair practices by an unscrupulous landlord. For example, if you require payment of the last month’s rent in addition to the security deposit, and fail to return that last month’s rent following a valid termination of the lease, it is possible that the court will presume you as the landlord to have retained the tenant’s deposit. Those presumptions, however, may be rebutted by the various circumstances surrounding the agreement and performance of the lease.
The various rights afforded by your local landlord-tenant act give rise to obligations as well. It is not uncommon for a landlord to bring an eviction action citing a provision in the lease that gives you the right to terminate for failure to pay rent. The law, however, may require that the landlord serve written notice to the tenant when they fall past due, and that a statutory period of time shall pass following that written notice before the landlord may terminate. Failure to comply with those requirements ameliorates the consequences of a lease breach that would otherwise entitle you to terminate.
Likewise, if your lease allows you to enter the premises to correct a tenant default, the law may require that you give advance notice, they may require that you attempt to contact the tenant prior to entry, and they might even require that you give at least two attempts at entry prior to terminating for that breach. None of those actions is likely to be remembered by the tenant at the time the question is litigated in court, so your compliance with those statutory obligations may prove invaluable at trial.
In short, your lease agreement cannot be a tool for elaborately defining the rights of the parties to the agreement. Even your best drafted lease will only include those provisions permitted by law.
Tailoring a Room Rental Agreement
Every landlord will have a slightly different basis for renting rooms in their home, from the numbers involved to the way they react to late payments and even the way they handle security deposits. For this reason, it’s essential that you customize your room rental agreement to meet your particular set of circumstances. When it comes to stipulations, you may want to make those as binding as possible. For example, if you intend to take late fees out of the deposit if they are not paid in cash, you need to clearly state this. If you plan to give notice to vacate if the rent is even one day late, that needs to be clear. You can customize the stipulations in any way you see fit – as long as your custom stipulations are legal.
Don’t enforce unreasonable stipulations. You want to be fair, both to yourself and your tenants. If you make the point too aggressively, you could end up losing your tenant when they don’t adhere to extremely tight limit switches. It’s important to be strict enough that you regain the expenses of having a tenant, but the tenant also needs to be able to afford their rent. If you charge them so much that they cannot pay their rent, they will either leave before the end of the lease or stay and become a trouble tenant. If you scare them away too soon, you will be left with empty bedrooms and have to find new tenants for your next round. Moving is not something a lot of people want to do often, and if you have made a reputation as a reasonable but firm landlord, you will have returns on your investment and will have no problems with finding new tenants.
Room Rental Agreement Red Flags
Navigating the world of room rental agreements can be fraught with challenges for both landlords and tenants. To avoid conflict, it is crucial to approach this issue methodically and carefully. One of the most common pitfalls occurs when a landlord attempts to address every possible situation in fine detail. Such an approach can turn a simple agreement into a complex document that’s confusing to read and hard to update, often resulting in unexpected discrepancies. Additionally, not all matters can be clearly defined; unexpected circumstances may arise that are not covered in a complex lease, such as a new pet or an unexpected visit from an out-of-town friend who wishes to spend the night. Landlords can avoid this pitfall by carefully considering the kinds of issues they would like to be able to address on an ad hoc basis. For example, a clause addressing pets that gives the landlord authority to charge a fee for keeping a pet in the house can provide a leave to navigate the issue with fewer administrative costs . Another common issue is uncertainty within the contract. Unclear language may lead to different interpretations, which can lead to disputes. To avoid this problem, good contract drafting practices involve using the same terms to describe the same things, and using clear, concise and specific language to describe obligations in detail. Finally, landlords and tenants should pay careful attention to who signs the lease agreement. Landlords may make the mistake of including their signature and treating it as the only signature on the document. However, different parties in a household may share space that one individual rents on behalf of the group. If an individual rents a room that she shares with roommates, for example, she should consider having her roommates sign the lease as well so that all parties agree to the terms.
Room Rental Agreement Negotiation Advice
A comprehensive lease agreement provides a clear record of the terms and conditions for renting a single room. While the details vary from deal to deal, some basic negotiation strategies will help both tenants and landlords land on an arrangement everyone can agree to.
Negotiation tips for tenants:
Be realistic about what you will be paying in rent. If you are living in an expensive neighborhood and have a small room, perhaps your rent will need to be closer to half of normal market value to compensate. Or, if the bathroom is down the hall and you have to share it with several other people, then a lower than normal rent may be appropriate in that case, too.
If your landlord comes back asking for more than you can afford, know that you are able to effectively negotiate your rent. Let them know that you like the room, but that the rent exceeds your budget, or at least the budget you had initially set out. A polite and respectful counter-proposal or compromise offer is usually met by landlords who want to sign a lease agreement as quickly as possible.
The same strategy applies to things such as utilities and Internet service.
Don’t forget about furnishings.
Negotiation advice for landlords:
For landlords, the best advice is to be fair about rent and related items. If you are trying to get as much money for your room as possible, know that you risk limiting your market. A fair market rate, even if it involves some negotiation, is likely to get the room rented more quickly.
Avoid tying up yourself and a prospective tenant in a long-term negotiation period. Once you and they have agreed to negotiate, you should strive to finalize whatever lease terms seem reasonable as expeditiously as possible. Tenants get jittery. They may engage with other landlords about their rooms. They may tighten up regarding the rate they are willing to pay.
If you do choose to negotiate on something, make sure you understand what the tenant wants, and be fair about the concession you are making. For example, a reasonable cut of $50 per month for a shared bathroom is not as fair as charging just a little more rent for an in-room bathroom.
Another good strategy is to make it clear that while you are happy to negotiate, you are a busy landlord and cannot play back and forth with offers and counter-offers indefinitely.
Be clear with the language you use. Use neutral terms when requested by tenants which seem appropriate.
If you aren’t clear on your lease agreement terminology, have an experienced real estate attorney help you.
Room Rental Agreement Enforcement
The enforcement of the agreement is very similar to enforcement of other types of written contracts. If either party to the room rental agreement breaches the agreement, the aggrieved party has the option to pursue the other party for damages. In an action for damages, the other party (breaching party) will usually have to pay the damages resulting from their breach of contract. The other party may also be required to pay both parties’ attorney’s fees and costs in some cases .
Often times when a party sues for damages, they elect to get out of the rental terms and simply sue for any difference in the market price for the cost of rent at the time of the breach. The party can also elect to stay in the room and simply sue for their damages. When enforcing this specific type of agreement, whether the party is staying in the room or not, most courts will seek to perform any remaining duties in order to bring the parties to the proper remedy. In most cases a specific performance of the contract is not required because the other party already has the specific performance in the room.