This type of lease is ideal for individuals in a few years of employment contracts in a new country or city. They could sign a lease for the number of years their contract covers. Because of the short-term duration of a rental agreement, they allow much more flexibility in rent increases. Technically, the rent can be revised each month with a rental agreement in order to remain in compliance with the current fair market rent, provided that the rent increases are in accordance with local law and the termination rules that govern the monthly rent. With a rental agreement, landlords can declare that they rent a room as opposed to an entire unit. With a room rental agreement, landlords can be assured that tenants understand their rights and obligations, including rent, when due, the parts of the property they can access and much more. A tenancy agreement is a document that acts as a contract between you and your tenant and defines the terms of the tenancy agreement. You can have it written in a way that is favorable to you, because you can decide what goes into the agreement. The type of property leased should be clearly stated in the form of the contract. This should include a brief description of the property, its location and the specific part of the property that is leased to the tenant. The deposit is often treated as a fiduciary deposit belonging to the tenant, but held by the landlord until the premises are restored to good condition (except for normal wear and tear). In some countries, the landlord must make the name and account number of the bank where the deposit is deposited available to the tenant and pay annual interest to the tenant.

Other rules may require the lessor to submit a list of existing damages to the property or to pay the deposit immediately (because it is not possible to determine whether a previous tenant was responsible). Before entering into a tenancy agreement, the tenant will generally consult the space and deem it acceptable for their standard of living and make an oral offer to the real estate agent, trustee or landlord.