A rental agreement is an official contract signed between the owner of a property and the tenant who wishes to take temporary possession of the property for a said period of time. Also called a rent deed and lease deed, a rental agreement contains basic details of the residential property, the owner of the property, the renter (or tenant, as he is also called), the term of the rental, and the amount of the rent for the said term.
The rental agreement or rental contract is drafted on a stamp paper. There are 2 types of rental contracts in India, one being a lease agreement that lasts for a minimum of 12 months. This is governed under Rent Control Laws put up by the State government. The other type is a lease and license agreement of up to 11 months which doesn’t fall under the Rent Control Laws.
Names of the landlord and tenant and/or their agents.
Description of the property.
Amount of rent and due dates for payment, grace period, late charges.
Mode of rent payment.
Methods to terminate the agreement prior to the expiration date and charges if any.
Amount of security deposit and the account where it is held.
Utilities furnished by the landlord and, if the landlord charges for such utilities, how the charge will be determined.
Facilities in the premises which the tenant is entitled to use such as swimming pool, security systems etc.
Rules and regulations such as pet rules, noise rules and the penalty for violation.
Identification of parking available, including designated parking spaces, if provided.
How tenant repair requests are handled and procedures for emergency requests.
Terms commonly included in a Rent agreement
Duration: Period for which the rental agreement will be in effect.
Rent: The consideration or payment made by the tenant to the landlord in exchange for the property Rented out.
Deposits: The amount of deposit required (if any), the purpose of each deposit, and conditions for return or adjustment of deposit at the end of the rent period.
Utilities: Which utilities are included in the rent, and which utilities the tenant is responsible for.
Insurance: Whether the tenant is required to insure the property – this is most often used in commercial rental agreements.
Repairs and Maintenance: Party responsible for repairs and maintenance of the property – landlord or tenant.
In India, security deposit or advance is also paid by the tenant to the landlord which is to be repaid at the time of cancellation of the contract. Usually, it is calculated anywhere from 2 or 3 months to up to 10 months of the rent. Security deposits are given at the time of signing the contract.
A part of the security deposit can be used by the landlord towards any damages caused to the furniture, appliances, electrical, or the property itself, by the tenant. After deducting the security deposit towards damages, the landlord is to return the remainder of deposit to the tenant, at the time of cancellation of the contract.
Last few days left to save
up to Rs 46,800 in taxes