A property owner must be aware of the rent agreement format before they can put the property in question on rent or letting out a property on lease. Why? What is the rent agreement? What is in the rent agreement that makes it so important?
If you are boggled in and around similar questions, then we can assure that that you have arrived at the right place. Let’s quickly head over to the article below and everything and all about a rent agreement and what it includes!
What Is A Rental Agreement?
According to the Registration Act, 1908, a property can be occupied on a lease if the rental period is more than 12 months.
A rent agreement is an important aspect that is also known as the lease agreement. It is a legal contract that is made between the landlord and the tenant, comprising all the terms and conditions related to letting out a property on rent.
A rent agreement includes the monthly rent, basic information like the size, type, address, and duration of the property, security deposit, etc. Here, the tenant and landlord are bound after signing, which is why we recommend scanning through the rent agreement before agreeing on it.
Why Is The Rent Agreement So Important?
In addition to the above-said details, a rent agreement helps to maintain the relationship between the landlord and tenant, avoiding any kind of friction throughout the period of the tenure. How? This agreement provides a safeguard of the property to the landlord, while, on the other hand, also the rentee is protected from facing any kind of unlawful demands by the landlord.
Plus, the rent agreement also anticipates the renter’s select ownership of the property for the term specified and in case there’s no demand of advance security deposit, for the renter to claim unlawful reimbursement.
What are the Factors Included in the Rental Agreement?
Listed below are the important factors that must be included in a rent agreement:
1) The Name of the Occupants
For obvious reasons, mentioning the name of the occupants in the rent agreement is a must for a better clarification about the individuals living as the tenant or also about visa-versa, also necessary in an emergency.
2) Tenancy Duration
Mentioning the tenancy duration is vital to make sure that the tenant vacates the place on time and/or prevents them from unlawfully possessing the property in question. On the other hand, as for the tenant, it helps safeguard their stay by preventing the landowner from unlawfully forcing the tenant to vacate, prior to the duration mentioned in the rental agreement.
3) Amount of the Rent
It is important for the tenant and the landlord to be clear on the rental amount, therefore, mentioning it in the rent agreement is a vital choice. Here, the sum gathered every month, the date of the lease payment, the punishment statement if there is a late installment, etc.
This prevents any unlawful money-related requests between the two parties and them from adhering to the stipulations expressed in the assertion.
4) Maintenance Cost
It is necessary for the tenant and the landlord to have the maintenance cost covered during the tenancy period. This is the cost that should be borne by either of them, including major or minor repairs.
No matter the place, there are some rules that must be looked into to help maintain the peaceful nature of the tenancy period. These rules could include, the treatment of the property and the surroundings, subleasing, restrictions, etc.
6) Security Deposit
If applicable, it is necessary for the amount to be mentioned in the rent agreement and signed by both parties. By doing so, the tenant can protect themselves from any unlawful financial demands, and the landlord can protect themselves from the tenant vacating the place without payment.
7) Notice Period and Renewal
The notice period and renewal must be mentioned in the rent agreement for the sake of prior knowledge. It is important that you also mention the date and get it signed by both the parties as a sign of agreement.
To be on the safer end of the relationship, it is better to mention all the amenities provided within the facility along with their latest condition. This will help avoid any damages or the financial settlement in case of any repairs.
9) Exit Clause
This section includes that clarity that must be resolved before the tenant vacates the said property.
10) Date and Signature
It is essential for the landlord and the tenant to both agree on the terms mentioned in the rent agreement. For which, the mentioning of the date and signature is important. Signing the agreement is similar to nodding on the mentioned clauses in the rental agreement, failing to which they could face legal penalties.
These were the 10 major clauses that must be included in every rent agreement in a basic format as in all rental agreements. The format of the rental agreement is of high significance and one must be aware of the same before signing one.
Also, remember to read all the clauses very carefully before you sign the rental agreement.
To Conclude: Why is the Police Verification So Important?
In addition to the factors mentioned above, Police verification is another major aspect of any rental agreement that must be adhered to. The verification by police of the tenant helps with a background check to prevent one with any unlawful activity and prohibiting them from using the property.
Also, it ensures the safety of the property, as well as the neighborhood. Note, police verification is not a choice but is mandatory, if not performed there can be a punishable offense taken under Section 188 of the Indian Penal Court.
FAQs: Everything You Need To Know About A Rent Agreement – Your Guide!
1) What are the things one needs to know or ask for before signing a tenancy agreement?
Here are a few things that one needs to know or ask for before signing a tenancy agreement:
- You must inspect the property in question
- If there are any damages, ask if they can be fixed
- Make sure to read the rent lease very carefully
- Know what all does the rent include
- Check if there are any alterations allowed in the property
- Are you allowed to sublet
- Make sure to ask if your pet will be welcomed
2) Who is responsible to register for the agreement?
Generally, it is the responsibility of the landlord to register the documents while the tenant takes care of the monetary front.
3) What happens if there is no rental agreement?
If there is no rental agreement, then the landlord can impose an increase of the rent amount in adherence to the Rent Control Act 1948. Also, if any damage is done to the property, the landlord cannot enforce any kind of payment from the tenant.
4) How long is the rental agreement valid?
The rental agreement is valid for up to 3 years.