Important Clauses to look out in your Tenancy Agreement (Part 2)

Tenancy Agreement: The Complete Guide to Salient Terms & Tenant’s Perspective

What are the Salient Terms in Tenancy Agreement?

1. Quiet Enjoyment- To make it clear that the Tenant is allowed to peaceably hold and enjoy the demised premises without any interruption from the landlord or any persons rightfully claiming through under or in trust for him so long as the Tenant is complying with its obligations contained in the Tenancy Agreement.
2. The Timing to Refund Deposits- The Tenancy Agreement shall make it clear the timing of which the deposits have to be refunded to the Tenant, i.e., within 30 days from the date of expiration or earlier termination of the tenancy by the Landlord. The deposits are usually to be refunded to the Tenant after deducting all costs, expenses and charges liable to be paid by the Tenant under the Tenancy Agreement upon expiration or earlier termination of the tenancy provided that the Tenant has complied with all its obligations contained in the Tenancy Agreement.
3. Insurance of Demised Premises- Landlord has the duty to maintain insurance over the demised premises, furnishings, fixtures and fittings belonging to the landlord against loss or damaged by fire, storm or any act of God etc – to ensure Landlord has the means of reinstating the building.
4. Consequences of damage/destruction of the Demised Premise- To clearly set out the Landlord’s obligation and timeline in rectifying or reinstating the demised premises in the event of damage by fire, storm or any act of God etc. Suspension/reduction in rental and right of Tenant to terminate if demised premises is not reinstated within specified period and all deposits to be returned to the Tenant.
5. Payment of Quit Rent and Assessment- Payment of Quit Rent and Assessment shall be borne by the Landlord.
6. Diplomatic Clause- This allows the Tenant to end a tenancy before the agreed period in the event the Tenant is relocated by its company to another state or country.
7. Options to Renew- This allows the Tenant to extend its rental for another term upon the expiry of the first term without worrying the Landlord refusing to rent to the Tenant for another term. Usually, the Tenant is given the first option to renew the tenancy of which the Tenant must give notice of such intention two or three months before the expiry of the tenancy so long as the Tenant complies with all its obligations contained in the Tenancy Agreement.
8. Right of First Refusal- To set out the mechanism of how Tenant can secure the right of refusal, i.e., if the Landlord wants to sell the property, the Landlord has to make an offer to the Tenant first. If the Tenant reject the offer, a right of first refusal would typically guarantee that the property would be sold to the third party subject to the Tenant’s tenancy.

Summary

In summary, Tenancy Agreement is basically a contract between Landlords and Tenant which highlight their duties and responsibilities towards each other. Without a Tenancy agreement, a Landlord could evade taking care of a problem, or a Tenant could run off after damaging the property. Hence, in order to avoid issues like these, it’s best to have a Tenancy Agreement in place. Please contact us for more information.