What is rental agreement?

Renting out any property and other immovable assets is a major source of additional income for most of the people. With income in the form of rent, one can be assured of financial stability at all times.

Rental income in India arises out of an agreement between the parties knows as the Rent Agreement. However, to ensure a smooth and hassle-free rental income the rent agreement must be drafted carefully. The rent agreement has to be registered mandatorily for a valid and legal transaction.

What all to include in a rental agreement

Term and Rent Clause

This is the first and most important part of the document. The term and rent clause caters to how long the tenant has the permission to stay and what he must pay for that privilege.

 Have a lock-in period, makes sure that there is a firm commitment from the Tenant’s side. One should also ensure that there is an escalation of rent amounts for each year so that you can get the most out of your asset.

The agreement shall also contain clauses regarding penalty and interest rates in the event the tenant fails to make the payment on time. Other inclusion like a cut off period is also an important inclusion.

Security Deposit Clause

This clause provides for monetary security in case the tenant defaults or causes damage to the property. Make sure to mention whether it is refundable or nonrefundable.

Eviction Clause

This is one of the most important clauses of a rent agreement because, through this clause, the liability of a landlord is protected in the event the tenant indulges in illegal or criminal activities. In addition, if the tenant is in default of the agreement, this clause entitles the Landlord to start the eviction process and gives him a valid legal ground for the same. 

Any charges for maintenance or other expenses

Make it clear in the agreement, what charges each party is responsible for. While the Landlord must pay the property taxes, the tenant can pay for maintenance and for repairs. This is over and above the rent amount. 

Amenities and Fixtures

Another important aspect to include is the promised amenities and fixtures. By doing so, one can avoid the confusion and disputes that might arise later regard. Further, by mentioning the amenities and fixture one can be assured, that post-expiry of the tenure, the tenant return the asset in the same state and with the same amenities and fixtures as mentioned in the agreement.

A good and well-drafted rent agreement can lead to a hassle-free and dispute free rental experience. If you are in need of any help regarding your rental agreement, visit our website and get the assistance of highly trained and qualified lawyers with a click of a button.