Contract of Lease | Lease | Condominium

How to safely lease out your property using a Contract of Lease

A Contract of Lease is an agreement where an owner (i.e. the lessor) allows another person (i.e. the lessee) to rent his / her property for a period of time and for a fee.

1. What is a Contract of Lease? 

A Contract of Lease is an agreement where an owner (i.e. the lessor) allows another person (i.e. the lessee) to rent his / her property for a period of time and for a fee.

A Contract of Lease states the terms of the lease and the rights and obligations of the parties. The lease contract contains terms such as the amount of rent, and the term of the lease. It may even include terms such as security deposit and advance rentals.


2. When do you need a Contract of Lease?

A Contract of Lease is needed if you want to rent out your property to another person. As the property owner you need a lease contract to states the terms the lessee should follow. It is hard to rely on a verbal agreement  because this is difficult to prove in court and people can easily forget details that both parties have agreed upon. With a written lease contract both parties can refer to the contract to settle any confusion or dispute regarding the lease.


3. How can a Contract of Lease protect you?

The Contract of Lease can protect the lessor if the lessee:

  1. Fails or refuses to pay rent;
  2. Damages the property being leased or is using the property for illegal activities;
  3. Overstays or fails to return the property; and
  4. Violates the terms of the lease (i.e. no pets allowed, no smoking policy)

In the cases above the lessor may invoke the Contract of Lease to demand that the lessee comply with the terms of the lease. If the lessee still refuses to comply the lessor may file a complaint in court to either compel the lessee to comply, or cancel the lease and even claim damages.

For the lessee, the Contract of Lease puts in writing his rights and obligations under the lease and what is expected of him (i.e. how much rent he has to pay). The Contract of Lease also acts as a restriction on the lessor because the lessor cannot unilaterally change the terms of the lease without the lessee’s consent. For example, once the parties agree on the amount of rent the lessor cannot unilaterally increase the rent without the lessee’s consent.


4. What information do you need to create the Contract of Lease?

To create your Contract of Lease you’ll need the following information:

  1. The type of lessor (i.e. individual or business) as well as name and details (i.e. nationality and address)
  2. The type of lessee (i.e. individual or business) as well as name and details (i.e. nationality and address)
  3. The type of property to be leased and its description (i.e. address and size)
  4. Basic terms of the lease (i.e. amount of rent, term of lease)

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