6 Ways to Improve Your Tenancy Agreement

by Chris on July 20, 2020

A tenancy agreement is a useful tool — if it contains the right provisions. Generic or standard leases tend to leave out the details, leaving tenants in the dark. These provisions can strengthen the lease, light the way for tenants, and make life easier for landlords:

1. Anticipate multiple tenants. The lease should provide space for multiple tenants. That will make it easier to avoid allowing one person to sign the tenancy agreement on behalf of all occupants. This includes a roommate situation where there is a “main” tenant who manages the roommates, as well as a family where there is one breadwinner. The tenancy agreement requires more than a promise to pay rent. It also mandates compliance with the landlord’s rules. Excluding some occupants from the lease opens the door to rule breaking. This also makes it difficult to establish a landlord-tenant relationship with a person who remains at the property but is not covered by the lease.

2. Joint and several. Speaking of multiple tenants, leaving space for all adult occupants on the lease is a great reminder that the agreement must include language that explains the concept of joint and several liability — any one tenant is liable for the whole, the security deposit is not severable, if one person leaves that terminates the lease. Some leases, like Ontario’s new standard tenancy agreement, may use the phrase “joint and several liability” but do not clearly explain what that entails. A tenancy agreement is not intended to be legal jargon alone; to comply, the tenants must understand their responsibilities.

3. Residential use. Most leases contain a boilerplate phrase that limits the tenancy to residential only. But that phrase is taking on new meaning this year with the pandemic and related business closures. Now, it’s worth discussing with the tenant what non-residential uses they may have in mind. Commercial uses can increase the cost of utilities and spark complaints from neighbours, especially over parking, increased foot traffic, and other noises. The mixed use could impact insurance coverage, like increasing the risk of invitees being injured. A common commercial use today is subletting to overnight vacationers, which a landlord may want to limit. Most work-at-home situations will be perfectly acceptable, but other income-generating enterprises may not — like an indoor tilapia farm or taking in laundry.

4. Guests. It is important to know who is living in a unit. Landlords have a duty to other tenants and adjacent property owners to avoid foreseeable risks, like increasing the risk of crime or violating the quiet enjoyment of others. And it’s not easy to evict a person who is not on the lease, especially if you don’t know the person’s name.

A guest policy may span more than one paragraph in a tenancy agreement. For instance, tenants need to understand that guests must be supervised and must comply with the common rules. An overnight guest may one day become a permanent fixture. In that case, the landlord may wish to reserve the right to require a tenant background check to ascertain risks or eventually add the person to the lease. Provisions concerning subletting or assignment impact guests. With the continuing popularity of overnight vacation rentals, and the related risks, it is wise to lay the groundwork for how to handle such situations, or to avoid them altogether.

5. Lay out some rules. A lease that is all legal terms with no real guidance is a missed opportunity to streamline the management of the property. If tenants know what they can or cannot do, most will — or at least attempt to. But if the tenancy agreement skips over those parts, the tenant may assume that anything is fair game. The best advice for devising house rules is to consider the most common — and potentially explosive — disputes: noise, parking, and use of common areas. But with some simple language, the risk of facing these complaints diminishes. For instance, defining a noise curfew between normal sleeping hours like 10 pm to 6 am and requiring tenants to avoid any noise during that time that is likely to wake up the neighbours, providing assigned parking with consequences for violations, a no-barking mandate for pets, and a requirement that tenants oversee their laundry loads.

In single-family properties, spell out the tenants’ responsibilities, like shoveling snow from the walkway and other outdoor maintenance.

6. Include provisions for inspections. Many landlords are uncomfortable with conducting routine property inspections, but to allow a tenant to take the keys with a sense that no one will see what is going on is risky. The mere statement that routine property inspections are required prevents tenants from becoming territorial or apathetic and may prevent costly property damage.

Of course, it is best to make good on the promise and inspect the property at regular intervals that are appropriate for the property. This is a chance to connect with the tenant and to determine if the unit needs maintenance before little repairs grow into major headaches. Otherwise, longer-term tenants soon will realize there are no consequences for causing incremental property damage.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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