Rental agreement: what you must include

A rental agreement has to name the parties, the property, the rent and the term. The other clauses protect you only if you can later prove they were kept or broken. That proof comes from the documents both sides sign when the home is handed over, and by the records the landlord keeps after that.

What must a rental agreement contain?

Every rental agreement should name the parties and their details, the specific property, the rent with its amount, due date and payment method, the term, and the date the home is handed over. Put it in writing even for a short let: everything else in this article relies on a signed text.

Describe each party by full name, identity document details and permanent address. When a party is a company, give its name, company registration number (EIK) and the name of the person signing on its behalf. If the property is co-owned, get the signature of every owner or a written power of attorney from the others. Ask a lawyer what happens if one of the co-owners does not agree to the letting. Before you copy the tenant's ID card, check the guidance of the Commission for Personal Data Protection on which details you may record and keep.

For the property, give the address, floor, apartment number and the cadastral identifier from the title deed. List every extra space included in the let as well: a storage room, a parking space, a garage. If the agreement just says "the apartment", it stays unclear who uses the storage room and the parking space.

State the rent in EUR together with the day of the month by which it is due and the bank account it is paid into. "Monthly" without a specific day is the most common gap in templates downloaded from the internet: without a date, late payment cannot be established.

Choose between a fixed and an indefinite term. A fixed term gives predictability, but early departure then depends entirely on the termination clause. An indefinite term is more flexible for both sides, at the cost of less certainty. Record the handover date separately from the signing date, because rent and bills start running from the handover, and the condition report refers to it too.

On the day you sign, attach the title deed with the property identifier and any written powers of attorney from co-owners. These are the first two pages of the property's file.

How should you set up the deposit so you can make deductions from it?

The deposit clause in a rental agreement should state the amount, what it secures, which deductions are allowed, how damage is established, and when and how the balance is returned. Before you write in the amount and the return period, check with a lawyer whether the law limits them.

Decide what the deposit covers. If it secures damage only, you cannot keep unpaid rent from it, or the last electricity bill that arrives after the tenant has left. If it covers rent and final bills as well, say so explicitly. The return period needs to be long enough for the final bills to arrive, and the tenant will wait longer for the balance.

Deductions are measured against the handover report, not against "normal wear and tear". Wording such as "excluding normal wear and tear", with nothing to compare against, is behind most deposit disputes. Write instead that the condition at move-out is compared with the condition in the report and that only differences going beyond ordinary use are deducted. Back every deduction with photos and a quote or invoice for the repair.

Specify whether the tenant may offset the last month's rent against the deposit. If the agreement is silent, tenants often stop paying for the last month, and the landlord is left with a deposit that no longer covers any damage. State how the deposit is returned, too: by transfer to an account named in the agreement, so the return itself leaves a trail.

The deposit file consists of four documents: the transfer by which the tenant paid it, the transfer by which you returned it, the move-out comparison, and the invoice for each deduction. Keep all four with the agreement.

Which documents should you sign when you hand over the home?

At handover, the landlord and the tenant sign a handover report with an inventory of the furnishings, the meter readings, the number of keys and dated photos. The agreement refers to the report, and both sides sign it.

Take the furniture inventory room by room. Record each item and its condition in plain words, such as "scratch on the left wardrobe door" or "kitchen tap drips". Where an appliance's model is visible, record that too. An inventory that just says "furnished" gives neither side anything to compare against at move-out.

Read every meter: electricity, water, the heat meter or heat cost allocators where there are any, and gas. Photograph each meter so the reading is visible. These readings set where the tenant's consumption starts, and without them the first bill becomes a dispute.

Count the keys, remotes and access cards and write the number down. If a key is not returned, a counted set is grounds for deducting the cost of changing the lock, and an uncounted one is not.

Photograph every room: walls, floors, windows, bathroom. The photos should be dated and both sides should get a copy. It makes the handover longer, but without photos, a year later the condition of the property will be reconstructed from memory.

Add a sentence to the agreement saying that the report dated on the handover day forms an integral part of it, and have both sides sign every page. The full procedure is in the article on the move-in inspection.

Who pays the bills, fees and repairs during the tenancy?

Bills, fees and repairs are paid by whichever side the rental agreement names for each of them. Every running cost should be named explicitly in the agreement: electricity, water, heating, building maintenance fees and internet. Here is what to write for each, and what happens if you leave it out:

• Electricity, water, heating and gas. Record who pays, and whether the accounts stay in the landlord's name with the tenant reimbursing the amounts on the bills. Without such a clause, unpaid bills pile up on the landlord's account.
• Building maintenance fees. Record who pays the fees for the common areas. Otherwise the landlord hears about the arrears from the building manager.
• Internet and TV. Record whose name the provider contract is in and who cancels it at move-out. Otherwise the tenant leaves and the subscription keeps running.
• Minor repairs. Record that the tenant takes care of small things such as light bulbs, seals and blocked drains. Otherwise every small fault becomes a request to the landlord.
• Major repairs. Record that the landlord covers the structure, the installations and faults in appliances that the tenant did not cause. Otherwise every emergency is argued over only after it has happened.

Set out the procedure for faults in the agreement as well. The tenant reports in writing, the landlord responds within a set time, and in an emergency such as a leak the tenant may take steps to limit the damage and is reimbursed against an invoice.

If the accounts stay in your name, note every month the bill and the date the tenant reimbursed it. Otherwise arrears on your account come to light only when the provider chases them.

What protects you if the tenant stops paying?

Four clauses in a rental agreement protect the landlord against non-payment: payment by bank transfer, a defined consequence for late payment, a right to terminate after a set number of unpaid months, and a written notice procedure.

Require the rent to be paid by bank transfer, with the month in the payment reference. Each such transfer proves both the payment and the period it covers. If you accept cash, issue a signed, numbered receipt every time.

Decide what follows late payment. If you choose a contractual penalty or late-payment interest, state the amount and the day it starts to run, and ask a lawyer how high it may go before you write it in. If you do not want one, at least state the grace period after the due date.

Record after how many unpaid months the landlord may terminate the agreement. A short threshold protects the rental income but leaves no slack for a tenant who is one month late. A long threshold does the opposite. The number itself matters less than having it written down.

Agree which channels count as valid notice, for example a letter to the address in the agreement or an email to named addresses. Messages sent through a channel nobody agreed on are hard to rely on. Do not include clauses that let the landlord change the locks or cut off electricity and water. If the tenant neither pays nor leaves, discuss the next steps with a lawyer.

Keep a monthly record of the rent due and the rent received, with the date of each payment. The number of unpaid months that triggers the right to terminate can then be shown, not just claimed.

How is a rental agreement terminated early?

Early termination of a rental agreement is governed by four clauses: the grounds on which each side may terminate, the notice period for each, the written form of the notice, and how the deposit and prepaid rent are settled.

List the grounds for each side. For the landlord these are usually non-payment, as described in the previous section, serious damage, subletting without consent, and using the property for something other than living in it. For the tenant they are major repairs the landlord has not carried out, or a home that has become unfit to live in.

State the notice period for each side in days or months. The periods can be the same, or the tenant can have a shorter one if you accept less certainty. Ask a lawyer which period applies if the agreement does not set one.

Require notice to be in writing and delivered through one of the channels agreed in the contract. A verbal "we're moving out next month" leaves the date of notice unprovable. Keep a copy of every notice with proof and date of delivery, because the period runs from a date that has to be proven.

For a fixed term, decide what the tenant owes if they leave early without grounds: rent for the notice period or a set amount of compensation. Discuss the amount of compensation with a lawyer before you write it in. At move-out, repeat the handover in reverse: a full inspection against the report, final meter readings, return of the keys, and settlement of the deposit under the agreed clause.

How do you check the agreement before signing it?

Checking a rental agreement before signing takes seven steps, from the parties to the attachments. A free template is an acceptable starting point only once each step below holds your own decision rather than generic text.

1. Check the parties: full names, identity details and the signature or power of attorney of every owner.
2. Check the property: address, apartment number, identifier and every extra space.
3. Check the rent: amount in EUR, due date, bank account and the consequence of late payment.
4. Check the term: fixed or indefinite, with a handover date separate from the signing date.
5. Check the deposit: amount, what it secures, a deduction rule tied to the handover report, return period and method, and whether it can be offset against the last month.
6. Check costs and termination: every bill and fee with who pays it, the split of repairs, the fault procedure, the grounds and notice for each side, and the valid notice channels.
7. Check the attachments: handover report, furniture inventory, meter readings, number of keys and dated photos, referred to in the agreement and signed on every page.

What should you document while the property is let?

While the property is let, record every change to the rent, the occupants or the term in a signed, dated addendum, accept every payment in a traceable way, and keep every repair request and notice in writing together with the agreement.

Make an addendum for every change: a rent reduction during repairs, an extension, a new payment account, permission for a pet. The most common gap here is a verbal agreement to lower the rent for two months. At move-out the tenant claims the reduction was permanent, and nothing proves otherwise.

The payment record you keep under the rent clause is also what you need when you declare your rental income. Ask an accountant what to declare and by when.

For each repair request, note the date it was reported, the date of the response and the invoice. Keep every notice with its proof of delivery.

Keep everything in one file per property: agreement, report, addenda, payment record and correspondence. Agencies that manage properties on behalf of owners do well to keep the same file for every property they manage, so the owner sees the records without having to ask. Rental agreement management in Smarter Facility stores the agreements in one place, tracks each agreement's start date, end date and terms, and sends a reminder before an agreement expires or is due for renewal.