A tenancy contract is an agreement which is formed between the property owner and the tenant. These are commonly used for real estates as well as for business purposes such as renting equipment for production. This implies that one’s property will be used for another and therefore, drawing a contract becomes necessary. This is a written contract which binds the two parties under the State Contract Law of the nation. This means, that all formulations of such contracts should be done under guidelines prescribed under law. The main objective is to ensure that all terms and conditions of occupancy are properly and legally adhered to. This is also constructed for a given period of time. Often tenancy contracts are distinguished on the basis of time frame:
- Rolling Tenancy Period: The contract is made with no such date mentioned but with the provision provided for either party to cancel the contract, if necessary.
- Fixed Tenancy Period: This contract is temporary in nature and is used by property holders for renting out on a yearly basis at the most.
The tenancy contract is used for goods and services as well. The contract emphasizes on the duties and functions to be provided for a certain amount of rent.
- This contract must address all the terms and conditions for renting for the tenant. This will include details about security deposit (if any), payment options etc.
- All additional expenses will also be borne by the tenant. In case damage done to the property, there will penalties and fines mentioned that the tenant must be liable to.
- The tenancy contract also emphasizes the obligations to be fulfilled by the owner to the tenant in terms of the quality of the property, good or service provided as well as other promises mentioned prior to the contract drawn.