What is a Lease Agreement?
A lease is a contract. In this contract, one party agrees to rent property owned by another party. The lease outlines the terms of the agreement.
The lease guarantees the tenant use of the property and regular payments to the landlord for a set period of time.
If either the tenant or the landlord fails to adhere to the contract terms, they both face repercussions. A lease represents a type of intangible right.
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When is a lease agreement entered into?
- A lease agreement is when a landlord lets a tenant use their property for a specific period in exchange for rent. The agreement is made between the landlord and the tenant. The tenant pays rent to the landlord for using the property. The lease specifies the terms and conditions of the rental agreement.
- A requirement for the lease agreement to be in writing is not necessary. It’s important to have a written lease agreement because proving a verbal agreement can be challenging in case of a dispute.
- The Rental Housing Act (“Act”) applies to a lease agreement entered into for housing purposes. Under the Act, a landlord must provide his/her tenant with a written lease agreement on the tenant’s request. The Act is not applicable to a lease agreement that is signed for commercial reasons.
- The landlord and the tenant must follow the terms in the lease agreement. Some responsibilities apply to both the landlord and tenant if not excluded in the lease agreement.
What are the obligations of the landlord?
- The landlord must provide the tenant with everything they need to use and enjoy the property, like keys and remotes.
- During the lease, the tenant must tell the landlord about any problems with the property to keep it in good condition.
- To protect the tenant’s privacy, the landlord must ensure they can use and enjoy the property without being bothered. This means that the landlord cannot enter the property without informing the tenant first, unless it is for repairs or inspections. This rule should be clearly stated in the lease agreement to avoid any misunderstandings.
- The tenant is protected from being evicted by someone else. This is unless the tenant knew that the other person had a stronger claim to the property. For example, if the landlord does not actually own it.
- To pay the property taxes and fees set by the city, unless stated otherwise in the lease agreement. This includes garbage, electricity, and other expenses.
What are the obligations of the tenant?
- Make sure to pay the rent on time to the landlord. The lease agreement will specify the due date and how to pay. It will also indicate if the rent should be paid in advance or after the fact.
- To properly care for the property and only use it for the intended lease purpose. For example, to only use the property for housing purposes, not to create a nuisance, and so on.
- The tenant is responsible for returning the property in good condition, except for normal wear and tear. They are not responsible for damage caused by someone else or if it was not their fault.
- To evacuate the premises upon the conclusion of the lease contract.
When may a lease agreement be terminated or cancelled?
A lease agreement ends when it expires or if it is canceled due to breach, death, or insolvency.
- If the landlord or tenant doesn’t follow the lease agreement, it’s a breach and the other person can use these remedies.
- Notify the person in writing to fix his/her breach within a certain period.
If the relevant person fails to fix his/her breach within the time provided, to either:
- maintain the lease contract and file a lawsuit for specific enforcement and/or seek compensation for losses; or
- terminate the rental contract and file a lawsuit for compensation and/or expulsion of the tenant if s/he continues to reside in the property.
What does subletting mean?
- Subletting is when a tenant rents out their rented property to someone else for a fee.
- If the main lease doesn’t say otherwise, the tenant can rent out the property without asking the landlord first.
- When a tenant sublets a property, there are two lease agreements. The first is between the landlord and the tenant, which remains in effect with the tenant still responsible for rent. The second is between the tenant and the subletter, ending when the primary lease ends.
- If the main lease says no subletting and the tenant sublets without permission, the sublease is invalid. This is a violation of the main lease and allows the landlord to cancel it.
What does a landlord’s hypothec mean?
- If a tenant owes money to their landlord, the landlord has a legal claim on the tenant’s possessions. This claim is known as a hypothec.
- A hypothec lets a landlord ask the court to take and remove a tenant’s belongings with the help of the sheriff. The sheriff will then sell the tenant’s belongings to satisfy the landlord’s arrear rent. This order stops the tenant from taking their things before the sheriff sells the property.
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