Rent Agreement In India: Overview And Types
Rent Agreements are the legal understanding between the owner of a land and its tenant. It falls within the gambit of residential or commercial property laws of India. When it pertains to establishing an occupancy, a rent contract is the most vital legal document. To make a rent arrangement valid under Indian laws, signature by both the celebrations, i.e., the landlord and tenant is a must. A perfect offline or online rent agreement format should consist of all the details and conditions of the particular occupancy. These days, it is really simple to gain access to online lease arrangement drafts in India. However, you always need to guarantee that all the stipulations and regards to the lease arrangement work in favor of both parties. Through this short article, you can understand all the standard terms that a legitimate authorized lease agreement should have and the different kinds of rental contracts in India.
As mentioned above, a contract prepared for the function of assisting in an occupancy is a rental contract. Generally, it is the property owner who gets the rent arrangement draft and after that provides it to the tenant for review and signature process. However, the terms are not always only in accordance with the property owner's interest. A lease agreement format is only valid when there is shared permission of both parties on all the terms and clauses. Further, the celebrations can likewise equally make changes to any rental agreement.
Rent contract stipulations
It does not matter if you are a landlord or the renter, it is equally crucial for both parties to the lease contract to have a clear understanding of the stipulations and terms set in the arrangement. The reason behind this is the truth that any ambiguity in the lease agreement draft can turn out to be disastrous in case of any future issues. Now that we know exactly what a lease agreement is, we will discuss the many fundamental and essential clauses of a rent arrangement.
Details of the parties
The most basic requirement of a valid rent agreement is the details of both the parties, i.e., resident and proprietor. Further, the tenant likewise needs to make sure that they provide the specific name and number of the other residents with him, as a part of that specific occupancy. The details consist of the name, long-term address, age, and occupation/profession of the parties.
Description of the rental residential or commercial property
The rental residential or commercial property doesn't require to constantly be a housing residential or commercial property. Hence, whenever you get in into a rental agreement, the agreement must have a complete description of the residential or commercial property in concern. In addition to its address, the list of other features and properties of the residential or commercial property, such as television lights, fans, A/C, list of any other furniture, and so on need to belong of the rental arrangement. This helps avoid future clashes concerning assets of the residential or commercial property.
Regard to occupancy
In all legal contracts, this is one of one of the most standard terms. In a lease agreement, the termination stipulation will define the duration of the tenancy. It will likewise provide out the terms for renewal of the rent agreement format in between the parties.
Rent and deposit
The most important aspect of any occupancy is the rent and the deposit quantity. Hence, it should be pointed out in the draft of the lease agreement. It ensures that both the parties are available for the costs involved. Further, perfect rent and deposit provisions will also consist of the consequences of failure to payment of any amount in due time by both celebrations.
Maintenance and damages to residential or commercial property of lease agreement
All terms related to the maintenance and the cost and liability in case of damages to the residential or commercial property must belong of the offline or online rent arrangement.
Rules of the occupancy
This stipulation has the a lot of impact on the renter. In this clause, all the rules of the residential or commercial property must be pointed out, such as:
- Whether animals are permitted or not;
- No. of occupants allowed;
- Whether the property manager enables commercial deals through their residential or commercial property or not; and so on.
Apart from these guidelines, the consequences of not following them are likewise a part of this stipulation. These effects might consist of financial penalties or may even result in the termination of the contract.
Lock-in duration of rent arrangement
This is a provision that locks both celebrations to the agreement for a certain period after its execution. Since leasing a residential or commercial property is an uphill struggle, the lock-in duration usually secures the interest of both celebrations. The basic lock-in duration in all online rent contracts is 3 months. This helps both celebrations in calming down.
Termination and notice of termination
Even after completion of the lock-in period, no rental arrangement can be terminated abruptly. Hence, this provision is put in location. When either party does anything to breach the agreement, they can terminate the contract based upon the terms of this provision. The notification period for a rent arrangement may last from one month to 3 months, depending on the mutual decision of the celebrations.
Police confirmation of renter
This provision safeguards the interests of the property owner. All renters should get a cops verification before carrying out the rent agreement. This makes sure the reliability of the renter and assists in building trust between the company and staff member.
Types of lease contracts
When you consider kinds of lease agreements, the a lot of standard are home lease agreements and commercial lease deeds. However, even these fall under the following 2 subcategories of rent arrangements in India:
- Lease Agreement: the minimum period of a lease agreement or a lease deed is 12 months. People normally select industrial lease deed drafts in India. Especially since the longer period of the lease makes it much easier for company owner. With that said, these lease agreements are governed by each state separately based on their Rent control laws. Lastly, an interesting aspect is that the lease contract typically also moves the interest in the residential or commercial property to the renter.
- Leave and License Agreement: generally, a leave and license arrangement exists for 11 months. This is the major difference in between both agreements. As an outcome, the leave and license contracts are majorly used for your home rent arrangement format. Lastly, the leave and license arrangement is not governed by the rent control laws of various states.
How to carry out a lease arrangement in India?
The requirements for performing a in India depend on the period of your rental arrangement. Based upon the period of your agreement, you can find out whether it requires registration or not. According to the Registration Act 1908, it is not mandatory to register a lease agreement, if the period is for less than 12 months. If your house lease arrangement is in a leave and license format, you will not need registration to perform it.
- When Registration is not mandatory
In this scenario, as soon as the rent agreement is drafted, all you require to do is, print it on stamp paper (as relevant to mark responsibility). Then, get a signature of both celebrations and two witnesses.
- When Registration is mandatory
In this scenario, the parties require to sign the properly notarised rent contract on the stamp paper before the registrar. This process too, needs 2 witness signatures. Below is the list of documents required for signing up a rental agreement:
1. Proof of ownership of the residential or commercial property;
2. Tax Receipt;
3. Passport-sized photos of both celebrations & witnesses;
4. Address proof; and
5. Route map of the residential or commercial property.
You can find hundreds of rental arrangement prepares online. However, the most essential aspect of any legal arrangement is your particular requirement. Experts at LegalWiz.in will make sure that all your rights are protected at all expenses. Get on a call with our professionals today. Contact us now!
Frequently Asked Questions
No, it is not necessary to sign up rental agreements in India. The compulsion depends on the period of your rental agreement.
This is something that both celebrations can choose mutually. However, most of the times, the occupant bears the expenses associated with rental agreement registration.