Rental Agreement Format - House Rent Agreement Sample and Terms

A rent agreement or house rental agreement is essential for both tenants and owners. This agreement contains all the terms of the rent. House owners who let out their property to tenants and tenants staying on a property must follow the terms laid down in the rental agreement. This article provides the house rent agreement format, types of rental agreements, execution of the rent agreement, and much more.

Rental Agreement

Anyone who wants to stay in a house on rent or get a property on rent, should enter into a rental agreement with the owner of the house/property. The rental agreement is an official agreement entered between the tenant and owner of a property. Tenant is the person who wishes to take temporary possession of the owner's property by paying the rental amount. The tenant can stay/use the property of the owner for the time mentioned in the rental agreement. 

A rental agreement, also called a rent deed and lease deed, 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 period, and the amount of the rent for the said term. 

The rental or rent agreement is drafted on a stamp paper. 

Types of Rental Agreements Commonly Used

There are 3 types of rental agreements in India: 

1. Rent Agreement: Tenancy or rent agreement is a basic contract between landlord and tenant for temporary possession of a property.
   Duration: Typically 11 months and can be renewed at the end of the period (If more than 11 months, registration is mandatorily required).
   Key points:
   1. Covers details like names, property description, rent amount, late fees, grace period, security deposit, facilities, parking, repairs, insurance, etc.
   2. Concise and hassle-free.
   3. Registration is optional if tenure is less than 11 months
       
2. Lease Agreement: Lease agreement is a more formal contract for longer occupancy (usually over 12 months). It is governed by the State's Rent Control Laws.
   Duration: Typically more than 12 months.
   Key points:
   1. Creates an interest in the property, meaning the tenant has certain rights like using it for the agreed period (even if sold).
   2. Can be for extended periods.
   3. Binds both parties for the agreed term.
   4. Mandatory registration: required for legal enforceability.
       
3. Leave and License Agreement: This agreement is a permission to occupy a property, not a tenancy agreement.
   Duration: Flexible.
   Key points:
   1. Differs from lease agreements as it doesn't create an interest in the property.
   2. Revocable by the owner anytime.
   3. Grants "permission" to occupy, not rights.
   4. No landlord-tenant relationship; easier evictions.

Rent Agreement Format

Contents of a rental agreement

The contents of a rental agreement varies from place to place. However, the usual contents of a rental agreement include:

• Names of the landlord and tenant and/or their agents.
• Description (Address) of the property.
• Amount of rent and due dates for payment, grace period, late charges.
• The person responsible for the payment of any other amount such as property tax, TDS (if applicable), property repair changes, society/flat maintenance changes, water bill, electricity bill, etc.
• 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 amount 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.
• Terms of use: The purpose for which the property is to be used and terms and conditions regarding the usage of the property.
• 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.
• Termination: The period when the rental agreement ends. It may end due to notice by one party to the other for ending the rental period or due to the end of the duration of the contract. When the agreement ends or terminates, the rent period also ends, and the final settlement of dues between the parties regarding the property, such as the return of advance amount, payment for damages, etc., will be made. 

Security deposits

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 rental 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 and painting of the property, the landlord must return the remainder of deposit to the tenant, at the time of cancellation or termination of the contract.

Procedure to Make Rental Agreement

Below is the process for making a rental agreement:

Step 1: Draft the rental agreement and review of the agreement by both parties, i.e. owner and tenant.
Step 2: Finalise the draft rental agreement and print it on stamp paper obtained from a Sub-Registrar's office.
Step 3: Ensure the owner, tenant, and two witnesses sign the rental agreement.
Step 4: Get the agreement registered at the Sub-Registrar's office if the duration of the rental period is more than 11 months.
Step 5: Make a photocopy of the signed (in case of 11 months rent) or registered (in case of more than 11 months rent) rental agreement and give a Xerox copy of the agreement to the tenant.

Documents Required for Registration of Rental Agreement 

The general documents that must be submitted by the landlord, tenant and witnesses for registration of the rental agreement are as follows:

• The proof or evidence of ownership of the rented property (title deeds of the property having the name of the landlord)
• Property documents such as tax receipt of the property to be rented out
• Passport-sized photographs of each of the parties and the witnesses 
• Address proof of both parties and witnesses (Passport, Aadhaar card, ration card, bank passbook or driving license) 
• Route map of the property to be rented out, if required
• Any other document specified by the Sub-Registrar's office.

How to Execute a Valid Rental Agreement?

According to the Registration Act of 1908, the registration of a rent agreement is mandatory if the duration of the rental agreement is 12 months or more. However, if the duration of the rental agreement is 11 months or less, there is no requirement to register the agreement. In such a case, drafting and signing the agreement on the stamp paper will be valid as per law.

In case the agreement duration is 11 months or less, the rental agreement needs to be printed on a stamp paper obtained from the Sub-Registrar office of the place where the property is situated. After the rental agreement is printed on the stamp paper, each page of the stamp paper must be signed at the bottom by both the owner and tenant. Two witnesses must also sign the agreement along with their names and addresses to make the agreement valid.

In case the agreement duration is 12 months or more, the rental agreement needs to be printed on stamp paper and it needs to be registered with the Sub-Registrar’s office of the area where the rented property is situated. The landlord and tenant must be present at the Sub-Registrar’s office to execute the agreement. They must sign at the bottom of each page of the stamp paper on which the agreement is printed in the presence of the Registrar. Two witnesses must also sign the stamp paper and it should be registered after paying the required fees.

Rental Agreement Sample

Below is an example of a rental agreement executed on e-stamp paper:

E-Stamping of Rental Agreement 

In some states, the e-stamping facility for rental agreements is available. Where the e-stamping facility is available, the parties need not buy the stamp paper from the Sub-Registrar office to print the rental agreement. Instead, they can log on to the Stock Holding Corporation of India Ltd (SHCIL) website and check if the state where they reside offers this facility.

Presently, Assam, Himachal Pradesh, Gujarat, Karnataka, Delhi-NCR, Maharashtra, Uttarakhand, Tamil Nadu and Uttar Pradesh allow e-stamping of rental agreements. However, e-stamp paper cannot be directly purchased from the SHCIL website.

If the state where the parties reside offer e-stamp paper, they need to purchase the e-stamp paper from the allotted centres in their respective cities. After purchasing the e-stamp paper, the rental agreement must be printed on it. When the duration of the agreement is 11 months or less, the signature of the parties and the witnesses on the e-stamp paper on which the rental agreement is printed will make the rent contract valid and binding on the parties.

When the duration of the rental agreement is 12 months or more, the parties must print the rental agreement on the e-stamp paper, go to the Sub-Registrar’s office, put their signatures and get it registered for the agreement to be valid and binding on them.

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