What are Rental Agreements?

Rental agreements are nothing but a lease agreement between the owner of the house i.e. landlord and the person who is taking the house on rent i.e. tenant. This agreement mainly determines the manner in which the legal relationship between the landlord and the tenant would exist for a fixed period of time.

Typically, a rental agreement is prepared by anyone either by the landlord or the tenant. To consider the agreement as valid, both the landlord and the tenant have to sign on the rent agreement in the presence of two witnesses. Also, the agreement must be attested by the witnesses.

Content of Rental Agreement:

The content of the agreement can be based on the negotiations between the landlord and tenant. However, standard house rental agreement contains several terms in addition to the description of the property including terms relating to the payment of rent, conditions of using the house (for commercial or non-commercial purposes), mode of payment of rent, security deposit along with the conditions on which security deposit can be forfeited, duration of the agreement, terms of renewable etc.

Duration of Agreement:

House rental agreements can be executed for any fixed period of time and generally, they include terms of renewable of agreement. However, generally, such agreements are executed for 11 months or for a period less than that in order to get exempted from stamp duty and registration charges which need to be paid in the event of a lease agreement for a period of 12 months or more than that.

Important things to look for in Rental Agreements:

If you are looking for having the lease of the property, then following points need to be checked in your house rental agreement (if an agreement is not negotiated one i.e. it is standard agreement):

1) These agreements may have lock-in clause which may specify that tenant cannot leave the property before the specified time period. If you don’t want to stuck in the house, check such clause in the agreement. Generally, all such agreements have notice period clause regardless of the lock-in period, which specifies the time period in which tenant has to notify the landlord of his intention of leaving the house.

2) If you may want to further rent out your house, then you may need to check the sub-letting clause in the agreement as not all landlords allow the same.

3) Proper attention must be paid to the clause specifying the maintenance and other charges as the landlord may try to fool you later on and may demand unjust money in the name of maintenance.

4) Clauses relating to the mode of payment of money and the rate of increase in the rent should be read with caution as they are the most fundamental part of the agreement.

5) If you don’t want to spend your money in repair works, then clauses relating to repair work needs your proper attention.

What is a Rent escalation clause?

A tenant should verify whether the landlord has included a “rent escalation clause” in the agreement, which could be used to increase the rent after a certain period says after six months. Verify whether the agreement mentions the date after which rent charges would increase and the percentage of increase.

What are the ways to get the Rent agreement executed validly?

Following are the requirements that need to be fulfilled:

1. The documents must be printed on Stamp Paper of due value.

2. It is necessary to get the document signed by both the parties (landowner and tenant). 

3. The document must be attested by two witnesses along with their name and address.

4. If the term of the agreement exceeds 11 months then you have to register the rent agreement at the sub-Registrar office after paying the required registration fees.

The author of this blog is Adv. Shimpy Armaan Sharma having an experience of 16+ years in handling property and documentation related matters from her experience she wants to share this beneficial information for the individuals having any issues with respect to property and documentation related matters.