What is a Condo Rental Contract?
What is a condo rental contract? If you’re renting your apartment in a condominium, you should have some sort of written tenancy contract with your landlord. The contract is usually called a lease or an apartment lease agreement, but the term "condo rental contract" may be used to refer specifically to this kind of contract.
A condo rental contract is simply a written agreement in which you as the tenant agree to pay rent to your landlord in return for permission to occupy the space for a specified period . A smaller landlord that isn’t managing a large property sometimes avoids using a written contract because it’s easier to simply shake hands and say that both parties are in agreement. However, oral contracts like this can cause problems down the road and they often do.
The legal purpose of a contract is to protect all parties from the other parties to the contract. In the case of a lease, a condo rental contract protects both landlords and tenants. Since tenants live in condos that are owned by other people, a contract gives them full legal rights to occupy the unit without fear that the landlord will end the tenancy arbitrarily.
Key Features of a Condo Rental Contract
A well-crafted condo rental contract is essential to ensuring that both the lessor and lessee of a condo unit financially and legally protect themselves. Therefore, it is not important whether you are the unit owner or the renter; it is worth your time to have as much information on the contract as you can so that you fully understand what is being legally required of you. The lease duration. While some condo owners will rent their units in an open-ended fashion, a formal lease term is more common. This is usually for a period of 12 months. Be sure to read this closely as many units will automatically renew after the lease term unless you or the owner give notice. Payment of rent. It would be surprising if you were renting a condo without knowing where you were to pay your rent but it is vitally important to know. For example, many leases state that checks presented to a condo’s management company will not be accepted in \(insert location\). On rare occasions, the unit owner may insist that payment be made directly to them. Whichever it is, know that it is your duty to pay. It should be noted that payment of rent is rarely made directly to the condo apartments for rent. Owners will want to have a centralized fund to which they can have tenants pay. Most owners will give you specific instructions for this. As soon as you understand who you are to pay, get it in writing to be certain. Security deposit. There will almost certainly be a security deposit associated with your condo rental. Commonly, a single month’s rent is secured in a trust account. This ensures that the renter receives their full money back after completing the duration of the lease. However, the owner may keep a portion for normal wear and tear, unit cleaning, or simply because that is what the lease requires. If you intend to fight this clause, make certain that you have it re-written in your favor by the unit owner before you take possession of the residence. Maintenance and repairs. This is one of the most critical elements of any lease. You must know who is responsible for taking care of the unit. Typically, the unit owner is responsible for appliances and structural damages but be absolutely certain before you move in.
Rent Payment Guidelines Explained
It is very important that a renter understands exactly when and how much they are required to pay in rent each month. Many leases require a set amount on a set schedule, such as the first of every month at a designated time. In some cases, the homeowner may allow for a grace period or a sliding scale of late payment fees depending on how much money is past due.
Respected real estate websites, such as Zillow, report that many leases are set up to require a check or money order in the amount of the monthly rent. Personal checks may not be accepted due to concerns about whether it will bounce if the landlord does not have enough funds to cover his or her own obligations later in the month.
Commonly accepted payment methods can include cashier’s checks and money orders purchased through a bank or other money service company. Additionally, some property management companies and homeowners may have an electronic payment option similar to what is seen with common utility and cellphone services. Some may even offer to accept rent via a third party transaction service like PayPal. However, this is subject to both the homeowner’s and tenant’s agreement and consent.
Late payments often result in additional fees for the property owner or management company. Very commonly, a property owner will implement a late fee system akin to that which people see when they have credit cards or personal loans. There is usually a set fee for any balance owed after a specific date. If the rent is paid within a certain span of time (often 1-2 weeks), this may be waived. For instance, often a person who pays their first month’s rent a couple of days late may have the fee waived, while a person who pays their mortgage a couple of days late may still have to pay the fee.
Whether or not a person has to pay the fee and how much it will be are listed in the lease. It is very important to understand the full cost of paying rent on time and late. Often, people assume that these fees are static when they are really based on percentages of the overdue rent. In some cases, the late fees can exceed what a landlord might pay on his or her investment mortgage.
Deposit Rules
Most condo rental contracts stipulate a security deposit in an amount not more than one month’s rent. The security deposit is held by the condominium corporation itself or its property management (not the owner) until the end of the term of the lease. It is returned by the condominium corporation or its property manager after the tenant vacates the premises, unless there is a good reason for them to withhold the security deposit.
The security deposit is intended to be used by the condominium corporation to cover any amounts owing by the tenant to the corporation, or to cover damage to the common property and units, if the corporation cannot obtain payment for the damages from the tenant. For example, if the tenant owes common expenses, costs of repairs, utilities, legal fees, and/or special assessments (all arrears that are likely to exist) the condominium corporation can demand that the owner pay these amounts first, before it decides if it should release the security deposit.
If the security deposit is not enough to cover any amounts owed and there is substantial damage to the common property or units by the tenant, the condominium corporation can then sue the tenant for damages and to obtain a payment order against the tenant.
If the tenant has caused damage to the common property or to a unit that is owned by the owner (not the tenant) and the corporation has been unable to recover from the tenant, the corporation can pursue the owner for the damages. If the damages are very significant (i.e., water damage) the corporation can also sue the unit owner for costs of repairs, insurance deductibles, auditors’ fees, and for damage to the reputation of the corporation as an insurer may refuse to insure the damage for a period of time.
Repair and Maintenance Obligations
The typical condo rental contract will set out the maintenance and repair responsibilities for both the landlord and their tenant. In general terms, a landlord, for example, will be responsible for most large-scale items. These would include things who’s cost will be significant, such as major plumbing issues, structural problems, roof repairs and legal matters such as dealing with the condo board. As well , it’s generally understood that anything which is part of the structure belongs to the landlord and any damage to the unit that results from the failure of something in the structure is the landlord’s responsibility. So logically the landlord is responsible for things like building repairs but also responsible for things like balcony maintenance.
However, the lease will also specify that the tenant is responsible for day-to-day issues. These would include small repairs, maintenance, general cleaning and general upkeep. These areas would include things like changing light bulbs, cleaning the unit on a regular basis, cleaning light fixtures, replacing batteries in smoke alarms, replacing air or furnace filters, unplugging drains, and smoke detector issues.
Termination of the Lease
While the lease term is generally designated in a Calgary condo rental contract, you the renter still have obligations even in the event you no longer wish to continue with the rental. If you are set for a 3 or 6 month rent term but no longer want to continue with the term, or if you no longer want to continue renting at all, there are a few options at your disposal under the Residential Tenancies Act.
When Can a Lease be Terminated? In order to terminate your lease ahead of time or prior to the end of your rental term, you have a few options under the law. You can ask your landlord for permission to terminate your lease early, or you can apply to the Resident Tenancies Dispute Resolution Service to end the lease due to it being untenable. In certain cases you can also terminate your rental contract early if your landlord has breached the contract or other laws. A rental agreement claimer listing the reason to terminate your lease must go to the Landlord and Tenant Dispute Resolution Service.
Early Termination Penalties There are a number of penalties associated with terminating a lease early, primarily you being responsible for lost rent that results because you broke the lease early. You might also be responsible for any additional costs that result from your ending the lease early, such as legal fees or finding and screening a new tenant. Sometimes your rental contract will state that you are responsible for damages due to breaking the lease, and in such case you could potentially have to pay for damages to the property or other expenses. If you break your lease early, the landlord must try to re-rent the unit as soon as possible. If you fail to pay rent as outlined in your rental contract, the landlord can end the term or try to claim lost rent in civil court.
Common Legal Issues
When entering into a rental contract, renters and landlords should be aware of a range of legal considerations that affect rights and obligations under the law, including in relation to tenant rights, eviction procedures, and dispute resolution mechanisms. For example, most landlords will be familiar with the considerations set out in the Residential Tenancies Act 2004 (as amended) (the RTA) such as periodic and fixed term tenancy agreements, rental increases, bond amounts, water charges and termination notices, which apply across New South Wales. The RTA is the primary piece of legislation governing the relationship between landlords, tenants and their respective agents in relation to residential tenancy agreements. It prescribes the minimum standards for all residential tenancy agreements, including information that must be included in the tenancy agreement. Under the RTA a written lease is not required, although a written lease agreement is good practice. Landlords are required to provide a disclosure statement to the tenant either 48 hours before or at the time of entering the lease agreement. This disclosure statement contains standard information about property including details of any initial rental bond, the rent payable per week/fortnight, whether rent is to be paid by direct debit or alternative payment methods, and the name and telephone number of the landlord or agent managing the property. The tenant may then ask for more detailed prescribed information from the landlord or agent.
Market Standard Lease Conditions Standard lease terms include obligations of the landlord to: Standard lease terms include obligations of the tenant to: Tenants also have certain rights under the RTA which include:
Termination of a Tenancy Agreement Under the RTA, landlords and tenants can only terminate a tenancy in accordance with the RTA. For example, if a tenant has a periodic agreement, the tenant may terminate the tenancy agreement without grounds at any time by giving notice in writing. In the case of a fixed term agreement, the tenant can only terminate the agreement at the end of the term by giving 14 days’ notice. The RTA sets out specific procedures for the termination of leases – including the amount of notice and form of termination notice required.
Procedures for Dispute Resolution The NSW Civil and Administrative Tribunal (NCAT) is the administrative tribunal created to perform the judicial function of determining minor civil and administrative disputes. It replaces a range of former tribunals, including the Consumer, Trader and Tenancy Tribunal which used to hear disputes relating to residential tenancies. NCAT provides free, fast and non-legal ways to help parties resolve their disputes. NCAT has a dedicated Consumer and Commercial Division which deals with all residential tenancy matters, and provides a tribunal option for dispute resolution as a free, faster, simpler and more informal way for people to resolve their tenancy disputes. NCAT may make orders to: it is important that prior to making an application to NCAT that you obtain independent legal advice with respect to the dispute, the potential remedies available at NCAT, and any other potential civil remedies that might be available to you outside of the provisions of the RTA or NCAT.
Negotiating a Condo Rental Contract
Until you sign a condo rental contract, you may be able to negotiate favorable lease terms and potentially the amount of rent, too. Here are a few tips to keep in mind:
Don’t be afraid to ask for flexibility in the rental term – Uncertainty in the economy and global events means many people are wary of committing to lease terms of a year or more. For example, you might request a 6-month rental contract, with the option to extend for another 6 months later. This also gives you the chance to review the landlord’s performance and decide if you want to stay longer. Of course, you need to make sure that an eventual extension would not violate the condo’s management agreement, if there is one.
Be aware that a monthly lease or renewing your contract every month still may not give you the flexibility you’re looking for. If the landlord decided to increase the rent without notice or has an emergency requiring him or her to find a new tenant, you may be forced to look for a new place to live on extremely short notice and at an inopportune time. This is especially true in competitive rental markets. It’s certainly worth trying to negotiate a shorter rental term, but you should not be surprised if your landlord rejects the request .
Ask for a rent reduction – A rental property in a condo complex can be a great deal for both the landlord and the tenant, as the landlord bears no responsibility for maintenance, repairs or renovations. The condo association covers these tasks. With less hassle and risk, the landlord is free to offer a reasonable rental rate and still make money. In fact, if the property is vacant for any period of time, they will make no money.
The second factor that works in the tenant’s favor is the strength of the property rights of the condo association. Your landlord may be unable to afford to do repairs requested by you. It may take your condo association weeks to send a maintenance worker out to fix something in your unit. These realities allow you to ask for a lower rental rate. If your request is reasonable and your landlord declines, remain polite and move on. If you persist, it may hurt your relationship with an otherwise good landlord.
Be careful not to push too hard for concessions on these points – You don’t’ want to scare the landlord into thinking you will be a stressful tenant or cause them to reconsider renting to you. The goal of negotiating a condo rental contract is to ensure that you get a favorable outcome while building a fruitful relationship with your landlord that will benefit you if you encounter any problems.