A good lease agreement is not a matter of luck
Both parties must sign a lease agreement before handing over keys to the property.
The lease agreement is a very important legal document. Proper wording that encompasses all possible events during the lease period (and even before and after it) can save a headache and prevent disagreements between the parties.
When a lease agreement specifies most situations, the contract can be referred to in any case where a question or disagreement arises between the landlord and the tenant.
By Igal Mor, Adv. & Notary
Accuracy in Legal Advice. Excellence in legal support.
One of the most common mistakes property owners make is to use a template and general rental agreement that they download from the internet. A template like this does not go into great detail and does not explicitly state the requirements of the tenant and landlord.
Some countries require the use of a specific agreement, but in the State of Israel, this is not the case, and therefore it is worthwhile to make an agreement that will cover all possible situations.
In this list, we will review some of the essential details to include within the agreement and are there to help and protect both parties.
- Basic information about the tenant and the property
- Details of the various payments, guarantors, and collateral
- Additional tenants, subleases and animals
- Routine maintenance of the property
- Length and manner of termination of the lease period
The basic information
At the top of the contract will be the names of the landlord and tenant, their contact details, and the property’s address and details.
The term of the agreement will then be indicated and whether it is timed or renewable.
Additional details that are important to note will be the amount of rent and a clear breakdown of how to pay. At this point, it is also essential to list the grace periods (if any) and the full consequences of non-payment of rent or late payment beyond the grace period.
It is also important to detail the situations in which the parties can exit the agreement and what the consequences will be for this exit.
Payments and collateral
Depending on the circumstances and permitted by law, it may be necessary to require the tenant to deposit a security check-in rent of one month or more. You can also weigh the value of the rented furniture or equipment and potential repair costs when determining the deposit amount.
The rental agreement must state the deposit amount, the conditions under which it can be realized, and at what stage after the eviction, the deposit sits with the tenant.
In some countries, the property owner must deposit the financial security in a kind of trust account bearing interest and, at the end of the lease, return the deposit plus interest to the tenant, less any damages. This is not the case in Israel, but it is important to make sure that the lawyer is familiar with the laws and regulations in the country where the property is located.
Who will use the property?
This question may seem trivial but is a source of many problems if the lease is not clear or carelessly worded. Because it is impossible to know for sure what the tenant’s plans are. Whether he is interested in joining other partners or guests after signing the tenancy agreement or if he has family or children living with him in the rented property, it is advisable to anchor this matter explicitly.
Sublet
At some point, the tenant may want to sublet (rent a sublease) the apartment to a friend or stranger, so it is very important to indicate whether it is allowed or forbidden to sublet the property.
It is important to make sure the rental agreement explicitly states that the tenant must obtain written approval before transferring the property to someone else. Thus, the application can be accepted or denied when the tenant seeks to sabotage the property.
Ideally, suppose there is an agreement on a new tenant in the property. In that case, it is best to end the original tenant’s lease and start the process by signing a tenancy agreement with the new tenant, including signing and receiving the latest security check and new guarantors (if any). Trying to enforce the original lease agreement against a new tenant who was not a party to the contract in advance but only a sub-tenant can be complicated and significantly jeopardize the property’s investment.
Long term guests
The lives of the tenants in the property can be dynamic. Another person may live on the property. This person could be the tenant’s spouse, brother, or another family member. More people on the property means accelerated wear and tear, higher water or electricity bills, and the potential for disputes if any damage is created to the property.
Depending on the nature of the property, it will be worthwhile to write in the rental agreement a clear policy regarding long-term guests. You can specify how many consecutive nights or the total number of nights in a certain period during which a guest can stay at the property. The landlord, of course, will not be able to keep track of the entrants and exits every night. Still, it can be seen if there is another car parked regularly on the property or a significant and constant increase in the use of water and electricity. These details can indicate an additional tenant when checking if the tenant fulfills his part of the tenancy agreement.
Animals on the property
Many tenants have pets. Dogs are the most common but so are cats and other animals. It is important to note that if it is a dog of a dangerous breed, its owner must act per the Law Regulating the Supervision of Dogs, 5763-2002, and have the ownership of an appropriate insurance policy, which will also protect the landlord. If the landlord chooses to allow pets, it is advisable to detail the pet policy or include a separate petition agreement to protect the property from any potential damage. If the agreement prohibits the keeping of pets, it is important to clarify to the tenant that keeping a pet in violation of the contract will be a fundamental breach of the agreement.
Preserving the value of the property
The lease agreement should explicitly state that the tenants must guard the property and not damage or sabotage it, comply with the various noise laws, and not replace the locks without the property owner’s written approval.
It is worthwhile to specify which appliances (or furniture) are on the property and are also rented and indicate their condition (normal/complete). The agreement should also include unique details or rules specific to exceptions, such as policies related to parking or common areas.
List of accounts
House committee, sewage, water, electricity, gas, telephone, television, and Internet – clearly indicating who is responsible for their payment. It should also be clarified regarding the landlord’s responsibility regarding the maintenance of the fixed property and various repairs, including a breakdown of the times he will be able to visit the property when needed.
Defects in the property
The owner must warn tenants for any defect in the property that the landlord knows about or should have known about, insofar as the landlord does not do so, he may be exposed to a tort claim and breach of the agreement. Therefore, it is advisable to expose the known defects in the agreement itself or, of course (ideally), repair the defects before renting.
Termination of the lease and eviction of the tenant
The lease agreement must include the arrangements relating to the termination of the contract. Is there a possibility of extending it? What are the conditions for extending the lease period? What is the price to be paid during the option period? It should be explicitly stated that the agreement will end at the end of the lease if the tenant does not notify its renewal.
Lease eviction
It is important to note that at the end of the lease, the tenant will have to return the property in a clean and empty condition, as received, and as long as he does not vacate the tenant, he will vacate. Evacuation of a tenant requires legal action, and it is advisable to take action in this matter with a lawyer, who will perform preliminary actions such as notifying the tenant that he has delayed or missed the rent payments or violated the lease and then act as part of a tenant eviction claim.
It is forbidden at this stage to act against the tenant and not to perform a self-judgment before consulting a lawyer !!
Property left in the property
Many tenants leave personal items on the property after an eviction. It is worth noting that everything left on the property is considered abandoned property, and the landlord may discard it.
It is always advisable to consult a lawyer specializing in agreements and real estate. The lease agreement must not be left open for interpretation. The sections must be specific and detailed. During the rental period, the property owner must notify and enforces the violations. An agreement that includes all the relevant details is essential and may impact the condition of the property and the profitability of the owner in general.
