The lease contract is a customary document whereby the owner leases a housing unit to the tenant to use it in exchange for a specific amount of money that is agreed upon in advance.
The lease contract has a specific and known period, the beginning and end of which are written down in the details of the contract.
In other simple words, the lease contract is the document that guarantees the right of both parties, “the tenant and the owner”, when renting an apartment or a real estate unit in a specific area in return for a specified amount of money and with an agreement in effect between the two parties for a certain time.
The Most Important Clauses of the Lease Contract
The Preamble
The preamble in the lease contract contains the authority and competence of the parties to the contract.
The First Clause: Information About the Unit and the Two Parties
The first clause contains the information about the housing unit to be leased, including the address, the area, and internal specifications, in addition to the name of the lessor and the tenant and their signatures or fingerprints. The first clause also states the capacity of each one of the two parties, their nationalities, and their place of residence.
The Second Clause: the Term of the Contract
The second clause contains the term of the lease contract. It must be clarified whether the period of the lease contract is open unlimited or fixed.
The Third Clause: the Rental Value
The contract includes the rental value, which is a known amount of money, and specified payment dates. The rent is paid with receipts, and the tenant shall make sure that the owner signs the receipt before him.
Fourth Clause: Conditions of Terminating the Lease Contract
Contracts shall contain conditions that, it took place, lead to the termination of the lease agreement of the apartment or the property. These conditions include demolishing a wall or changing the characteristics of the rented unit by the tenant without the permission of the owner.
Or to use the unit for a purpose other than the one mentioned in the contract. So, it is not permissible for a person who leases a unit for housing to change its use for the commercial or administrative activity.
Fifth Clause: Duties of the Tenant Towards the Owner
The tenant is obligated to preserve the leased property and take care of it as if it is owned by him, and he shall pay utility bills and the rent value on time.
Actions That Nullify the Lease Contract
When the lease contract is signed by another person who is not the owner
The leasing party of the housing unit shall be the main owner and he is the one who signs the lease contract. In case of breaching this rule, the contract will be void, i.e. no person may sign on behalf of the owner of the unit (such as the son, wife, or anyone else) when leasing the unit or signing instead of the original owner.
To be an undivided legacy for more than 3 Years
If the unit to be leased belongs to an undivided legacy, and one of the heirs leased it with a contract for more than 3 years. Then, in the event of filing a lawsuit, the court will define the period to 3 years only, until the legacy is divided, whatever the original period was in the lease agreement. So, you should ensure that the unit is exclusively owned by the owner.
Mistakes When Writing a Lease Contract
1. Signing the Contract by a Third Party
It must be ensured that the two original parties “the tenant and the owner” are the ones who themselves sign the contract. It is not permissible for a third party to sign the contract on behalf of any of them.
2. Not Specifying the Period of the Lease Contract
One of the most common mistakes that occur in the lease contract is that the period is not specified in the contract. So, the period of the lease should be specified, when it begins and ends, within the contract.
3. Not Specifying the Purpose of the Lease
Not specifying the purpose of renting the apartment or the property may cause other problems later on. So, the purpose of the lease must be determined in the contract, whether housing, commercial or administrative, to avoid using the unit for any other purpose.
How Do You Guarantee Your Right as a Property Owner When Leasing a unit?
1. Verify the Identity of the Tenant
The information and identity of the tenant should be reviewed and confirmed so that the owner is not deceived.
2. Ensure That the Signature is Correct
The owner shall make sure that the tenant’s signature on the contract is correct and make the tenant sign before him.
3. Collecting the Security Deposit
The owner shall collect a security deposit from the tenant to ensure his right in case of any damage to the unit, or any delay in paying the required rental value.
4. Taking the Action of the Executory Formula in the Real Estate Registry
This is by registering the contract in the real estate registry so that the owner guarantees his right if the tenant breaches any of the terms of the contract. It also facilitates the process of terminating the contract.
How Does the Tenant Guarantee His Right When Leasing a Housing Unit?
1. Ensure that All Facilities are Available and Sound
The tenant shall review the safety of all facilities, including water, electricity, and gas, within the housing unit before contracting.
2. Inspecting the Housing Unit and Recording the Damage
The tenant shall inspect the housing unit accompanied by the owner, and record the damages before receiving it. So, he would not be held accountable later or would be accused of causing such damages to the unit.
3. Receive the Monthly Receipt
The tenant shall receive a receipt that is monthly signed by the owner of the property when paying the rental value. So, he would not be exposed to any kind of fraud, he is not required to pay the rental value again or is accused of non-payment.