Rent Agreement
A Rent Agreement is a legal document signed between a landlord and a tenant to rent a property. The person who owns the property is known as the landlord and the person who takes the property on rent is known as the tenant. A rental agreement is very important as it contains all the terms and conditions related to renting a particular property in written form. Renting a property without a written contract is very dangerous as it can lead to legal problems in the future. An oral rent agreement is not legally permissible so if there is an oral agreement between landlord and tenant either party can repudiate the agreement in such case the other party has to prove the content of the agreement which is quite impossible.
A rent agreement is usually drafted by the lawyer with the mutual consent of the tenant and landlord, but it must be drawn up with the mutual consent of both parties and signed by both parties in the presence of two witnesses. A written rental agreement serves as evidence of a mutual agreement between the parties and is admissible as evidence in court and the terms of this agreement cannot be changed without the consent of both parties.
TYPES OF RENT AGREEMENT
A rent agreement is generally of three types namely rent agreement, lease agreement, leave and license agreement. Among the three types of a rental agreement, whichever type of contract is entered into, both parties are bound to comply with its terms and conditions. If the terms of the rental agreement are violated, the other party can go to court to recover its due rights. However, the three types of rental agreements are discussed below;
• Rent agreement: A rent agreement is a conditional legal contract between the landlord and the tenant. It is a mutual agreement between the landlord and tenant that allows for a hassle-free settlement between the parties in the future. The registration of a rent agreement is not compulsory but needs to be attested by a notary public if not registered but after a certain tenancy period, it has to be registered.
• Lease agreement: A lease deed is a type of legal document that transfers ownership of a property for a specified period of time in consideration of a promised price. A lease agreement is usually made for the long-term rental of a property.
• Leave and license agreement: A leave and license agreement is a legal document in which a property owner allows a person to use his property for a specific period of time in exchange for a specified license fee, it does not transfer the ownership of the property. A leave and license agreement between landlord and tenant is commonly used to rent a residential property.
BENEFITS OF RENT AGREEMENT
The benefits of a written rent agreement are as follows:
• A written rent agreement is made with the consent of the tenant and the landlord.
• The terms and conditions of a rent agreement are set upon the consent of both parties.
• It protects the rights of both parties and also protects them from future disputes.
• It provides security to the landlord's property and protects tenants from illegal claims by landlords.
• It is admissible as evidence in court.
IMPORTANT CLAUSES OF THE RENT AGREEMENT
A rent agreement is prepared with the consent of both parties. However, the clauses that must be included in a rental agreement are mentioned below.
• Details of parties: This is the first clause of a rental agreement. This clause identifies the parties to the agreement. In order to identify the parties to the rent agreement it is essential to mention their name, age, religion, occupation, address, etc. in the agreement. If one of the parties to a rental agreement is an organization, the name and address of that organization must be included in the agreement and also the name, age, father's name, profession, address, and designation of the person representing the organization should be mentioned.
• Description of rented property: A thorough description of the property in respect of which a rental agreement is being prepared must be mentioned. It is also very important to mention that this property is furnished or unfurnished, if furnished then what furniture is in the property must be mentioned. If a rent agreement does not provide a thorough description of the property, there remains a high possibility of future disputes.
• Tenure of agreement: The tenure of a rental agreement depends on both parties. The tenure of the tenancy agreement is not fixed, it can never be said that the tenancy of a residential property does not exceed 11 months. However, when preparing a rental agreement, it is very important to specify its duration and also the start and end dates of the agreement.
• Purpose of rent: It is important to mention the purpose for which a tenant is renting the property and also it is very important to mention that no anti-social activities can be done on the property. If the purpose of the rent is not specified, the tenant will do as he pleases in the property and the landlord may face problems in the future.
• Rent and security deposit: The monthly rent of the property and the security deposit are a part of the rental agreement which must be clearly mentioned and it is also important to mention the specific date on which the rent will be paid every month. If there is any condition of increase in rent after a specified period then it must be mentioned.
• Maintenance cost: Nowadays, the trend of living in flats has increased but the owner has to pay monthly maintenance charges to maintain the common area of the flat. Maintenance costs must be paid for living in a flat, so the tenancy agreement must specify who will pay the maintenance costs between the owner and the tenant.
• Lock-in period: If there is a condition that the tenant cannot leave the house for a certain period or the landlord does not ask the tenant to vacate the house then this lock-in period must be specified in the agreement.
• Duties and obligations: The duties and obligations of both parties must be clearly stated in a rental agreement. Both parties will be bound to abide by the terms and conditions mentioned in the agreement. The duty of the tenant is to pay rent on time, take care of the property and maintain peace and order. On the other hand, the duty of the landlord is to keep the house in a rentable condition and maintain the water and electricity supply on time.
• Renewal, termination, and notice period: A provision for an extension of the rent agreement must be included in the agreement. The agreement should specify whether the tenant can renew the agreement at the end of the term.
The agreement should contain an option that the tenant can terminate the rental agreement before the end of the term and it can also state that the landlord can ask the tenant to cancel the agreement before the end of the term and vacate the premises if the landlord needs the property. In this case, the parties shall notify each other with a maximum of two months' written notice. Both parties may mutually decide on an extension, renewal or notice period before the agreement is prepared.
• Dispute resolution: One of the most important parts of the agreement is the way to resolve the problem. Disputes can arise between landlords and tenants at any time, so it is important to specify in the agreement how disputes can be resolved. The court, arbitration, and conciliation are the most common ways to resolve disputes between landlords and tenants.
• Signature and date: The rent agreement should be signed and dated by both parties after careful review and understanding.
