Common Mistakes to Avoid in an Agreement for Lease

A well drafted Agreement for Lease is very important when you are renting out a property because you want to have a smooth and stress free renting out experience. This legal document makes it clear what the rights and responsibilities are to the landlord and to the tenant in order to stay out of trouble and to maintain transparency. So, whether you are managing a Holiday Rental or a property for long term lease, the agreement is structured properly, in their favour as well as protecting you from misunderstandings, excess costs and legal recourse issues.

But many people commit blunders in making or signing a lease agreement and can end up in a dispute and financial handicap. These are some errors from unclear terms to missing legal clauses that can make your life a misery into the future. So even before you land in Kuala Lumpur, we have prepared a few common mistakes everyone makes in the Agreement for Lease that you need to avoid in order to rent your home on assurance.

Here are Common Mistakes to Avoid in an Agreement for Lease

1. Not Defining Key Terms Clearly

The lease agreement should be detailed and precise so that there is no room for confusion. Often, ambiguity or obfuscation over carrier, fee, or other terms; lease duration, including renewal and termination, lease conditions; or security deposit type, amount, and return are the basis for rental disputes. Let’s say rent is not provided in the lease as to when and how it should be paid, this can result in undue stress between the landlord and the tenant. Also, terms that pertain to the usage of property, subletting and utility payments must be clearly stated. This is in order to define everything in black and white so that both parties can have a mutual understanding and no conflict. The time up front to clarify key terms saves the time and money.

2. Ignoring Responsibilities of Each Party

Not specifying who is responsible for what is the biggest mistake when making a lease agreement. Landlords have to state what their obligations are in respect of maintenance, structural repairs and insurance. However, tenants should also know what their duties are, for example, keeping the property clean, paying rent on time and reporting necessary repairs. There will be disagreements with respect to maintenance and unplanned costs without guidelines. A great deal needs to be covered in a well drafted lease agreement in order to reduce confusion. This is a good way to establish a good and professional rental relationship and to avoid future disputes by having both parties understand and confirm their responsibilities.

3. Overlooking Termination Clauses

Life is unpredictable, some tenants and landlords will have to end the lease before the agreed period. When the exit terms from the lease agreement are not clear, disputes may rise. For instance, in this case a tenant may consider that he can quit anytime he pleases with one month notice. In contrast, the landlord wishes for a longer notice period or the early termination compensation. It should mention clearly the notice period that is needed, the penalties for breaking the lease, and what constitutes sufficient grounds for terminating the agreement. Termination clauses should have been well defined for both parties involved and is good and smooth process.

4. Failing to Conduct a Thorough Property Inspection

Both landlords and tenants should inspect the property before signing a lease agreement. If not documented at the beginning of the lease, disputes over damages can arise when the property is time to move out. To avoid misunderstandings, you can take photos and make detailed notes about any wear and tear that already exists. Tenants should also report any issues as soon as possible when moving in so that they are not blamed later. A property inspection is a simple but effective way to protect both parties and to document who is responsible for damage and repair from the very start.

5. Not Including a Clause for Rent Increases

Landlords are usually raising the rent for long term lease agreements because of inflation or market conditions. But, if this is not mentioned in the lease agreement, disputes can occur. The agreement should be well structured to mention how often rent can be increased, the percentage limit and how much notice the tenant will be given. Without this clause landlords may have trouble enforcing rent hikes and tenants may have reason to complain that their rent increase came from left field. The rules of rent adjustment should be clear, so that there is no dispute between two parties about the unexpected change in rental rate.

6. Missing Compliance with Local Laws

So every region has its own leasing regulations and failing to comply with them will end in serious legal consequences. In order for these lease agreements to be applicable, it will be necessary for them to comply with all local laws regarding the rights of tenants, eviction policies, caps on rental and security deposit handling. For instance, landlords must deposit some deposits in certain accounts or give some notice before raising the rent. Failure to adhere to these will result in landlords getting fined or may be sued legally. They should also know their rights so as not to be taken advantage of by the landlords. You can avoid risking full compliance and legal protection by consulting with a legal professional or researching on the local law.

7. Neglecting Insurance and Liability Coverage

When a lease agreement is signed, many landlords and tenants ignore insurance. Without insurance, both parties would lose money if accidents, property damage or any other unforeseen disasters ever happened. Landlords also need to know if they have property insurance and whether tenants need renters’ insurance to cover personal belongings. Liability insurance is also important to protect both parties in case of injury or accident on the property. If included in the lease agreement, it helps to avoid disputes and protect the parties that are financially involved in case of risks and liabilities.

8. Not Skipping the Review by a Legal Professional

Not having a lease agreement legally reviewed is the biggest mistake in a lease agreement. The majority of people believe they know all the words and then later discover that the clauses are unclear or worse, legally invalid. The disadvantage is that a lawyer will be able to identify any potential problems, suggest any necessary changes and make sure that the agreement is in the landlord and tenant’s interests, but the advantage is that anyone can draft one. While it may seem like another expense to hire a lawyer, it will prevent both parties from spending an excessive amount of money down the line in disputes. Much of this is a function of hiring a legal expert to examine the lease and it is important to ensure that everything involved in the agreement is legal and gives benefit to all those involved.

Conclusion

The Agreement for Lease is what makes renting easy and smooth. The landlord and the tenant will protect their rights and prevent many disputes between them if the two follow the common mistakes, such as unclear terms, missing responsibilities, or overlooking legal compliance. If you are in charge of Holiday Rental Management or long-term leasing, it will take a lot of time in writing a detailed and clear agreement between the two parties to build a good relationship. All of these documentation, property inspection and termination clauses have to be fair and professional and documented.

So always read the agreement very carefully and if needed get advice from professionals to make the endeavour stress free. A legally sound contract not only shifts the risk to the contract but it keeps the tenant and landlord in a proper communication and on the same route. If you need to have expert assistance in drafting or even reviewing of the lease agreement to be sure that you have a safe and fair rental agreement, then our leasing services can help you. These precautions will help you take care of these things and will give you peace of mind while your leasing is successful and smooth.