Analyzing vital ingredients of Rent Agreements in India
A rental agreement between the tenant and the landlord is a rental agreement specifying the terms of the rental property. Apply today through NyayaSevak
The term Rent Agreement comprises of majorly two terms:
Rent as per Taxation Laws Amendment Act, 2016 is defined as “Any payment, by whatever name referred to under any contract, sub-lease, rental or other agreements or provisions for the use of any land or building (including factory construction), with furniture, fittings and the land to which it belongs, whether the payee owns or does not own such a building”
Agreement as per the Indian Contract Act is defined as “Each promise and commitments is an arrangement that takes into account for each other”
When reading them together, it becomes evident that this Agreement, despite the residential use of the land or any premises, when ratified between the two parties, the right to occupy such property shall be accorded to both parties for a specified time period.
However, this agreement does not relocate or transfer the ownership of the property but it merely transfers the possession of property This occupier shall prevent abuse of the owner's property and, ultimately protect the owner's rights over his property The owner of the property and the occupant are thus the landlord, i.e. In this case, the occupier shall eventually be bound by the Agreement and this legal arrangement shall be further maintained by several Indian laws:
Accordingly, every Rent Agreement is incomplete unless it does not include:
- Description of the property:
The property whose ownership is passed by the landlord to the tenant for a specific period of time, including the address, number of rooms, bathrooms, etc., must be clearly identified here. In short, the property must be described as a whole.
- Names of the landlord and tenant and/or their agents:
There must be clearly mentioned the names of the Parties who sign the Rental Agreement and, after acceptance and signature, both the landlord and the tenant shall make that Rental Agreement binding.
- Utilities offered by the landlord, if the landlord pays for such utilities then how the cost will be calculated:
The landlords also provide well designed premises to tenants and bill for their maintenance. The Owner himself shall however bear the money demanded by the Apartment Association, etc. The owner himself shall bear the burden.
- Rules and regulations, including pet rules, laws on noise and violation penalties:
The Landlord imposes essentially a residual clause, the specified rules and restrictions on the tenants to ensure proper behavior during their stay at the premises. The said clauses are needed to protect the said premises and to ensure that such usage does not affect neighbors.
Amount of rent and due dates for payment, grace period, late charges:
1. The rent sum to be paid and the dates on which these payments are to be deposited to the landlord by the tenant (preferably and as in practice, every month) shall be clearly stipulated therein.
2. During the course of the said rent agreement, the said agreement must clearly state who will pay the energy dues etc.
3. Notably, any payment made voluntarily by the tenant in respect of the rent arrears cannot be liable, assignable or creditable, in respect of future rent. Actually, it shall be considered as a deposit by the tenant for that purpose and for no other reason.
- Mode of rent payment:
Ideally, landlords prefer payments made in cash for rental agreements, particularly when landlords and tenants occupy certain premises or staying nearby.
In addition to the gap between the owner and his property being leased, however, with changing times and increasing feasible technology, both the landlord and the tenant prefer digital payments on the agreed date.
The payment method herein could be either prepaid, i.e. one made in advance or postpaid, i.e. one made after use of the premises – usually collected monthly by the Landlord.
- Procedures for terminating the Agreement before the expiry date and penalties if any:
Which consist primarily of the grounds for evicting tenants if they engage in the execution of certain illegal activates during the rental agreement, i.e. during their stay at the Owner' s property.
- Security deposit number and the account where it is held:
It is another collection of amounts apart from the amount to be paid for the use of the said property, thus obtained from the landlord and kept with the landlord as a reserve to ensure that the tenant does not leave the deposit at his convenience. It also puts upon the occupant a great responsibility for the organized use of the premises.
The Landlord, however, must bear in mind Nimauthulla V. Rajan's decision, whereby seeking a security deposit of more than Rs. 1 Lakhs in the country is illegal.
- Systems on property that the occupant has the right to use, such as swimming pool, security systems, etc.
The rental agreement must stipulate correctly the list of all the services that the landlord offers either to the tenant or to those that the tenant is permitted to use.
How to apply for a rent contract? In order to prepare the Rent agreement, you can log on to our website www.nyayasevak.com or download our app for free from Google Play store and/or Apple IOS store.