1. What is a rental agreement?
A rent agreement is a legal or formal copy signed between a landlord and a tenant to initiate and rule an occupancy. The person who owns the property is called a landlord and the individual who is living on his property for a specific period of time is called a tenant. Rent agreements include every particular about the two parties, i.e., the landlord and the tenant, and the terms and conditions of the occupancy. It is very crucial that both parties follow the rules noted in the rent agreement.
2. Types of Rental Agreements
Commercial Rent Agreement - This type of Commercial rent agreement usually includes premises which are occupied by big organisations. The relationship between landlord and tenant would also exist for this type of agreement. However, there can be certain smaller properties colonised by corporations. Residential Rent Agreement - This agreement is between the property owner and the tenant occupying the affinity and the use of the possessions. Residential rent agreements would constantly be reconciled between the landlord and the tenant.
3. Elements to be considered In a Rent Agreement
When you get the rent agreement with your tenant or landlord, there are certain contents that must be checked in a rental agreement. The following are crucial elements mentioned in a rent agreement– Name of the Parties - This is the foremost thing to be mentioned in the rent agreement. The details of both parties ( The owner of the property and the tenant) must be mentioned in a rent agreement Occupancy - This is the area of occupancy of the building or place which must be mentioned in the rent agreement. Make you that there is a specific occupied area mentioned in the rental agreement. The rental agreement should define the restricted area of the premises as well as the accessible portions. Period - The period for the occupancy of the premises must be clearly mentioned in the rental agreement. In case there is any type of extension is pre-discussed between the tenant and the landlord. Premises - Full details of the premises must be provided to the tenant in the section of the premises. The detailed discourse of the premises must be noted in the rent agreement. The square grounds of the deductions will be contained here. Tenant's Duties - This class includes the responsibilities and duties of the tenants must be furnished. Landlord’s Duties - In this clause, the responsibilities and duties of the landlord must be furnished. The clause related to Sub-Letting - This clause is pertinent to the limitations on subletting the premises to other individuals/tenants. In case of breach of provisions must seduce the penalties such as banishing the tenants from their possessions. Maintenance and Repairs - In this clause, it is crucial to mention the maintenance and repair responsibilities that will be carried out by the landlord. It can be annual repairs or maintenance that have to be wrapped under this clause. Breach of Contract - This clause is to cover those circumstances which may lead to a violation of the rent agreement along with the remedies (that must be considered) mentioned in this clause.
4. Format of Rent Agreement
Rent Agreement - This rent agreement is made on __________________(date of rent agreement) by__________________________ (name of the landlord) S/o ____ (father's name of the landlord), Address: __________ (residential address of the landlord). Hereinafter called the Lessor/Owner, Party of the first part AND _____________________________ (Name of the proposed company), through its proposed director __________ (name of the director) called lessee/tenant, the party of the second part That the expression of the term, Lessor/Owner and the Lessee/Tenant shall mean and include their legal heir's successors, assigns, representatives etc. Whereas the Lessor/Owner is the owner and in possession of property No: _______________________________________________________________________________________________ (registered address of the company) and has consented to let out the one office room, and bathroom set on the declared property, to the Lessee/Residental and the Lessee/Residental has chosen to take the same on rent of Rs. ______/- (in written format) per month. Now this rent agreement witnesses As Under: That the Tenant/Lessee will be required to pay Rs. ______/- (in written format) as monthly rent, which includes electricity and water bills. That the Tenant/tenant shall not rent the property to a subtenant under any occurrence without the permission of the landlord/lessor. Renter/Lessee shall obey rules and regulations, set by the local administrations in respect of the rented premise and will not get engaged or do illegal exercises on the rented possessions This agreement is provided for the time of eleven months beginning from ___________ (date of rent commencing from) and this agreement can be expanded further with the mutual approval of both groups as per the current rental value in the market. That the Tenant/Lessee shall not be permitted to do construction in the rented premises. Besides, he/she could do the installation of momentary embellishments, wooden partitions/cabins, etc. without the consent of the landlord. That the Tenant/Lessee is not permitted to construct any type of alteration in the leased property without the consent of the landlord. That the Tenant/Lessee will have to allow the landlord or his authorised agent to enter into rented premises for its inspection or general checking for any repair work if needed. That the resident/tenant shall keep the premises clean and shall not involve in any activity that causes problems to neighbours. That the resident/tenant shall himself/herself endure the cost of regular minor restorations. That this agreement/contract could be repealed before the expiry of this residency duration by performing a one-month prior notice. That the Lessee/Tenant shall not involve in illegal activities and will not keep any offensive, dangerous or explosive articles on the premises. That the Tenant/Lessee shall pay one month's rent in advance to the landlord which would be further adjusted in the monthly rent. That both the parties, the landlord and the tenant, have read and understood this agreement and have agreed to sign the same without any pressure from any side. In WITNESS WHEREOF the lessor/landlord and the resident/renter have to this legal document subscribed their hand at ______ (place) on this the _____________ (date of rent agreement) year first above cited in the existence of the following witnesses. Witnesses: 1. 2. ___________ (name of the lessor/landlord) _________________ (name of the submitted company) Lessor Lessee
5. Relevant Documents
Following are the documents that need to be furnished by both parties tenant and landlord at the time of producing the rental agreement—- For Tenant Aadhaar card. Two passport-sized photos. Voter ID card. Passport for people from outside India. For Landlord Aadhaar card. Identity proof (driving licence, voter card or passport). Two passport-sized photos.
6. Requirements For Rent Agreement
Police Verification - This step is to understand the background of the tenant. The character and precursors would be specified through this process. The landlord who wants to carry out such a process will be required to register online for police verification. Tenant Negotiation - After the police confirmation is done then the next phase in the methodology would be to negotiate the terms and conditions with the tenant. The rates of rent would also be debated here. Drafting - After this, the owner goes ahead and designates a lawyer to draft the terms and conditions of the rent contract. Registration - If the rent contract is for a period of more than 11 months then the same must be documented under Section -17 of the Indian Registration Act. Stamp duty On Rent Agreement There is a stamping charge levied on individuals and you have to pay a stamp duty while dealing with a rent agreement. The charge fee on stamp duty varies depending on the city where it is documented. This charge is paid, by purchasing the stamp paper of value you owe to the government. The stamp duty (In Delhi) is payable at 2% of the average annual rent, in the case of lease agreements for up to five years.
Frequently Asked Questions
What is a rent agreement?
A rent agreement is a legal or formal copy signed between a landlord and a tenant to initiate and rule an occupancy.
What is a rent review?
Rent review is the technique in which the rent is inspected on an annual basis.
Is It essential to get a police verification?
Yes. Police verification is crucial thing for carrying out the complete background of the tenant.
What are the types of rent agreements?
They are two types of rent agreements- Residential Rent agreements and Commercial Rent Agreements.
Is a rent agreement necessary?
Yes. It is essential to have a rent agreement either registered or notarized (signed by a notary public in order to make it official or legal) if the lease is for more than eleven months.
Can a rent agreement be broken?
No. You have the right to take the lessor to court in case of violence or breach of agreement and protect yourself against an illegal banishment according to the Rent Control Act.
Where can I use a rental agreement?
When setting your property (house, apartment, flat or commercial property) for rent. To get the agreement documented with the local administrations. Ensure that your tenant or landlord follows the rules and regulations as defined in the rental agreement.