10 Highlighting Points Of Rent Agreement In India [Update 2019]
Rent Agreement also knows as a Rental Agreement or Leave and License Agreement both are a common term. Due to increasing property prices and floating population for there jobs, there is always a huge demand for Rental Property. The rental agreement is singed by the owner and talent which are also known as Licensee and Licensor. A rental agreement can singed on a regular stamp paper 100/200.
The Leave and License agreement are ensured certain rights if arise any obligation on you and property owner. Without any contract to decide what happens when any rights breached or obligation not performed, problems are likely ensured. The Leave and License agreement should address all the key issue and state what the consequences will be in case of a dispute.
Rental Agreement is a mutual contract between the licensor and licensee and parties can add terms and conditions which best suit their mutual agreement. There is no fixed format for this following those basic clauses which should be mentioned in the agreement.
- Start and End date: All the parties to the agreement should mention the start and end date to fix the duration of the Agreement.
- Security Deposit: For the different cities value of security deposit is different. This security deposit is refundable but I observed that in some case there was a dispute on the same. In the agreement, it was not clear whether the security deposit is refundable or non-refundable. You should mention that “Security Deposit is Refundable”.
- Duration Of Agreement: As per the Indian Law a Leave and License Agreement can be done up to 5 years. Avoid choosing 11 Months there is no logic to choosing that if your agreement is going to be registered. If the Licensee is intending to stay longer duration and the licensor does not have any obligation on Licensee, Longer duration agreement can help both the parties to the agreement.
- Mode Of Payment: The Rental Agreement should mention the amount to be paid when the amount needs to be paid, make all the payments via cheque or online transaction so that you can track your all payment the owner cannot allege nonpayment or late payment.
- No Terency : This No Terency clause restricts to the Licensee to transfer, assign, and sublet or grant any license or sub-license, raise a loan against the property or mortgage the property.
- Maintenance Charge: This charges in another points of dispute, it should be clearly mentioned on the rental agreement that who will bear the maintenance charges and whether it included in the rent or not. Its beneficial for the owner keep the maintenance charge serapate from the rent as it will help in taxation purpose.
- Inspection: That parties licensor and licensee can mention owners or representative rights to inspect the property.
- List of Fittings and Fixtures: As a tenant, you should always include the fittings and fixtures are provided by the owners in working conditions. For example No of fans, Tubelights, Geysers, AC’s, CFL’s etc. The Tenant should handover those mentions fittings and fixtures to the owner as a working condition, all the details should be included in the rental agreement.
- Notice Period: If Landlord or the tenant wants to terminate the agreement a notice period, usually of one month needs to served to the party of the contract. Some agreement, may mention on a longer time period. At the time of sending notice always send your notice in written communication, with the date mentioned clearly.
- Terms For Renewal: To avoid any disputes in the future there should be mention points of agreement renewal if both the parties to the agreement are mutually agreed. This clause includes % increase in rent, deposit etc.
- Brokerage: It is last but not on the least, it is not beneficial for brokers or real estate agents if tenant stays for a longer period. You should discuss brokerage with the owner and include a clause in the Rent Agreement that brokerage is one time. At the time of renewal of the agreement, there will not be any payout to broker. The landlord may pay to maintain his relationship with the broker.
Hope This Post will help you for next to your rental agreement. If I missed any important point, you may add to the following comments section, for more information regarding property visit www.zamindari.in where you can get 24X7 Live advisor, they will help you out.