Room Rental Agreement

Real estate and property markets have a growing trend, which is termed as the room rental. Agreement for such a rental can be always rather difficult to draft owing to the fact that you are renting out a part of your property.
Penlighten Staff
Last Updated: Apr 28, 2018
A primary fact about real estate that almost every person tends to forget is that the availability of land is always limited, and unlike other resources, it cannot be increased or expanded. On the other hand, human existence and population is substantially increasing, leading to an increase in the demand for property. In such a case, the resulting factor is that the demand for property causes a drastic inflation in the property prices. This phenomenon was experienced in the sub-prime crisis and real estate bubble that took place in United States, which eventually led to a period of economic recession.

In such a situation, many people prefer to rent out a single room to tenants, instead of following the conventional apartment rental. The advantage is that an empty room churns out a good rent. Not just this, but the tenant gets a good lodging for a cheaper price. The advantage is thus two-way and is a good deal for the economy itself. This phenomenon is in some cases also known as a paying guest arrangement. The big difficulty however is drafting an agreement, which can be quite a tricky proposition.

The reason that it is difficult to draft is because an agreement is a bit different from the normal ones. In the conventional lease agreements, an entire property is being rented out for a certain rent for a certain time period. However, when you plan to rent out a single room, you lease out a part of the property.

Basic Terminology

A lease is essentially defined as a transaction where the property or asset is rented out against a specified monetary consideration which is deemed as rent. The legal effect is that your lease agreement for renting a room becomes a legally enforceable contract that has a legal standing in the court of law, and violation of such a contract can invite penalties and other consequences. Some consequences are mentioned in the agreement and the remaining are governed by the local law. A very important aspect of such a contract are found in rental agreement forms, which have to be filled and submitted to your local governing body and in some cases the legal enforcement wing of your locality.

Room Rental Agreement Sample

The following is a sample agreement, which you can also modify and use as a template.

This document is a legally binding contract between Mr. A and Mr. B. Mr. A of ___________ (address of residence), henceforth in this document will be called the landlord and Mr B of (address of current/native/permanent residence) the tenement. The property on which the room is situated is the one on address, will henceforth be referred to as the room.
  1. The tenant will occupy a furnished room of 150 square feet on the aforementioned property. The room will be furnished with one cupboard, a table, chair, and one bed and will also have an external entrance which and only which will be used by the tenement.
  2. Against the permit to use the room, the tenant must pay the landlord $____ before the 10th day of every month.
  3. The landlord cannot question the tenant's hours of work, or income, personal life and also cannot demand rent before 10th of the month. The landlord does not have any right of ownership over any of the tenant's assets.
This agreement is legally binding and will also have legal effects as a result of breach. This agreement for renting a room shall be governed by all the laws of the land and any decision by the court shall be enforced upon the transaction and any person, entity, or party to the contract.

Signatures:

There are several other facts that can be included in the agreement, for which you can refer to the rental agreement sample. Apart from getting the agreement properly drafted, you can also consult your attorney and lawyer for further advise and recommendation. If you're thinking about renting out a room, then you will have to get a landlord liability insurance or a renters insurance. You will need to register the contract with the help of a stamp paper and an appropriate signatory.