Rental or lease agreements, should be framed with the aim of creating a mutually beneficial relationship and avoiding disputes between the tenant and the landlord. We look at the important clauses that such agreements should cover
Vasu Srivastava, an aspiring law student from east Uttar Pradesh, who recently shifted to Delhi for her higher studies, moved into a two-bedroom apartment in Dwarka, with her college friend. However, after two months of their stay, they started noticing problems with the plumbing and electrical wiring in the apartment.
When Srivastava raised the issues with her landlord, the landlord simply denied any help and asked her to pay for the plumbing and wiring repairs, from her own pocket. Srivastava had failed to read the fine print in the agreement which had a clause that was slightly tweaked to favour the landlord.
Important clauses for any rental agreement
Dos and don’ts while drafting a rental agreement
The rent agreement, a document that seals the arrangement between a landlord and the tenant, is a potent instrument that can be used and misused. Shyam Sunder, a Delhi-based lawyer dealing in property related cases, “The rent agreement, if formalised properly, helps the landlord and the tenant, and results in a good healthy relationship between the two. However, it should be formalised with all the provisions and necessary laws.”
Rent agreements in the country are often made on notarised stamp papers. While this document becomes a legal contract, there are chances of violation from either party. Thus, the lease agreement has to be registered at the local sub-registrar’s office. In the absence of registration, it can be misused by either side. Moreover, the lease agreement should have sound clauses and provisions that protect the interests of both parties.
Important clauses for tenants
Provisions relating to your tenure of stay (tenancy period), the frequency and date of rent payments, the time of renewal of your lease and the provisions for repair and maintenance, should be clearly mentioned in the agreement. In addition to these, the roles and responsibilities of the tenant and the landlord should be defined. “It is advisable to take the property on rent, after all repairs and maintenance. One should also check the wiring and plumbing, before occupying the flat. This way, the tenant will safeguard himself from unnecessary expenses that may crop up in future,” advises Ekank Mehra, a Delhi-based lawyer.
It is also important to check on pending dues, such as electricity and development charges of the society. For example, Tinu Sharma, an executive working in Gurgaon and living on rent, recently got a notice from the society’s residents’ welfare association (RWA) over pending dues for two years against development charges.
In general, the development charges are paid by the tenant. Sharma, after paying the current and pending dues, got the amount deducted from the rent.
Rental agreements should also clearly state the amount/consideration paid as booking amount (or security deposit) and as advance, in the agreement.
The mention of arbitration clause, is also equally important. If your landlord is providing a furnished flat, it is in your interest to list the items, furniture or goods in the house. Any loss or repair needed, can then be easily established towards the end of your tenancy.
Important clauses for landlords
A landlord’s biggest worry is that the property can be usurped or illegally occupied by an errant tenant. For this reason, the rent agreement should be registered.
It is also important to sign the agreement, in presence of two known witnesses. Due to worsening law and order situation in metros, the police often insist on verification of tenants. Landlords can also ask for a copy of employment letter from the tenants’ employer. However, this should not be a yardstick of anyone’s character. Landlords should insist on police verification, for tenants who are foreign nationals or those who are not natives of that city.
How can tenants and landlords frame the agreement?
In general, most lawyers who assist in framing the rent agreement, have a ready template. This doesn’t mean that you cannot change the provisions. You can also tailor the agreement to suit your needs, with clauses that are mutually acceptable to the tenant and the landlord. You can also use the proposed Draft Tenancy Act 2015 for a desired template.
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