A house rent agreement document is a legal contract between the landlord and tenant for a fixed amount of time. It has a list of terms and conditions, which are agreed to and need to be followed by both parties. The rent agreement is renewable according to the timeframe mentioned in the contract. Most of the time, it is seen that the landlord and tenant relationship is a complex one, and conflicts arising between them are very common in India. Having a rent agreement is important to resolve any such issues. Before we look at the house rent agreement format and the procedure for online rent agreement registration, let us understand the rights of the landlord and tenants in India.
Landlord rights in India
Landlord rights are protected by the rental laws prevalent in India. The landlord can evict the tenant under certain situations like a breach of the rental agreement, not paying rent on time, misuse of the property, conducting any illegal activities, or subletting the whole or part of the rented property without the consent of the landlord. The landlord also has the right to increase the rent and can take temporary possession of the property in case any repairs or refurbishing needs to be done.
Both the landlord and tenant should have a copy of the rent agreement document all the time. The landlord can come to the house only with prior intimation to the tenant and they cannot invade the latter’s privacy. The tenant should be aware of the terms and conditions of the contract and should reach an agreement with the landlord before signing it. The landlord needs to return the deposit amount to the tenant after the lease term is over.
Let us look at some of the common issues that can sometimes turn into legal troubles in the future:
· Unjustified increase in rent by the landlord
· If there is no proper understanding of major and minor maintenance charges between the landlord and tenant
· Frequent visits or inspections by the landlord can annoy the tenant
· Tenants are creating a nuisance in the premises and causing disturbance to the neighbors
· The rent has not been paid on time by the tenant
· More people are staying in the rented premises than the agreed number
· The tenant is not vacating the premises even after the lease period is over
· If the landlord is not paying property taxes, loan EMIs, etc. on time, then the tenant gets all the notifications from municipal corporations and banks, etc.
· Wrong information was given by the landlord about facilities available (e.g. parking)
· The tenant carries out commercial or illegal activities from the premises
Why is a legal rent agreement document important?
Disputes can have an impact on the relationship between two parties, which is why having a rent agreement will make everything easier to manage. It will protect the rights of both the parties involved. A rent agreement document is an important document that must be read carefully by both parties before signing. It is important to have a rent agreement to take care of any conflicts that may arise between landlord and tenant, due to a variety of reasons, like:
· The tenant is subletting the property without the notice of the landlord
· The landlord has increased the rent without prior notice
· Tenant is setting up and conducting business from within the premises
· The security deposit has not been given back by the landlord
· The tenant has damaged the property
Types of Rent Agreement
There are two types of rental agreement documents in India. The first one is a rent agreement that will last for a minimum of 12 months. This agreement comes under the Rent Control Laws stated by the state government. The second type is a rent and license agreement that can go up to 11 months. This agreement does not come under the Rent Control Laws.
When should you get a registered rent agreement?
According to the Registration Act 1908, a registered rent agreement will include all immovable properties, whether residential or commercial, inherited land, and all other land-related benefits. If these properties are being given on lease to the tenants for more than 11 months, they need to be registered. For a period of less than one-year leases, registration is not required. However, it is recommended. In case there is no registered rent agreement, resolving any disputes arising in the future can become an issue.
Clauses that need to be included in the rent agreement format:
· Lock-in period: This is the period during which the landlord or the tenant can terminate the lease agreement.
· Late payment fees: In case the tenant is not able to pay the rent on the agreed date, the landlord may ask for a small fine.
· Any painting, maintenance, and repairs that are to be done have to be included in the house rent agreement format. The clause should specify the duties of the landlord and the tenant.
· Other points to be considered – The landlord should clearly mention any preferences regarding pets in the house or cooking non-vegetarian food, etc. Many landlords do not prefer the tenants to have pets. Hence, If the tenant has a pet, it is better to discuss it with the landlord before finalizing a house for rent. Many landlords also have problems if their tenants cook non-vegetarian food in the house, so it is better to clarify. The tenants should also clarify whether they are allowed to use the terrace, parking, or any other amenities within the complex.
What information does the rent agreement document contain?
The various details that are listed in a rent agreement document include information of both the parties, details about the property, the mode of rent payment, the notice period and the lock-in period duration, all the things included in the house like lights, fans, geysers, etc.
Let us look at some of the common mistakes people tend to make in a house rent agreement format which can lead to many problems in the future:
· The terms which can lead to the eviction of the tenant are not specified.
· The lock-in period and termination are not mentioned. The lock-in period is the minimum period till which the tenant cannot vacate the property. The notice period before terminating the agreement also needs to be specified.
· Not mentioning the amount of rent to be paid, mode of payment, and any other charges.
· Clauses related to subletting of property and power of attorney are not mentioned.
A house rent agreement format
Most of the disputes that happen between a landlord and tenant can be easily managed by signing a rent agreement that is binding for both parties. A comprehensive rent agreement format is available for download on many websites free of cost.
What are the benefits of a registered rent agreement?
Registration is the process of making a record of the agreement with an authorized government body. This process is essential because, in case of any dispute, only the rent agreement which is registered is admissible as evidence in a court of law. It is important to get a registered rent agreement with the authorized registrar. There are many benefits of registering a rent agreement with the registrar.
Some of them are listed here-
· Nobody would want to get tangled in a legal problem. There is a need for a proper legal agreement before giving out a property for rent. If the rent agreement document is registered, you will save yourself a lot of legal trouble.
· One of the most important benefits of registering the rent agreement is that there is a piece of legal evidence about the same. If either party gets into any kind of legal dispute in the future, this registered rent agreement will be a vital document that can help them to get out of unwanted legal hassle.
· You cannot benefit from government laws if you do not have a rent agreement that is registered from an authorized government body.
Registration of rental agreement procedure
A draft of the rent agreement document needs to be made and it should include the following information:
Name and permanent residential address of both landlord and tenant, details of the property being given on rent, duration of the rental agreement, amount of monthly rent, and security deposit payable, and any other terms and conditions that the tenant or owner have agreed upon.
After verification by both landlord and tenant, the draft rent agreement document needs to be printed on a stamp paper of INR 100 or above. Both parties need to visit the Sub-Registrar’s Office under whose jurisdiction the property comes, for the registration of the agreement. After the payment of the stamp duty and registration charges at the office, the rent agreement is generated. Both the parties and witnesses will be asked to sign the document before the Sub-registrar.
Important documents that are required for rent agreement registration are a document mentioning the property details, proof of address of the property to be registered, photo ID of both the landlord and the tenant, demand draft of the stamp duty, and the registration amount. There need to be two witnesses who should also provide their photo ID proofs at the office.
Online rent agreement registration
It is easy to create a rent agreement online. You can get a rent agreement online instantly just by filling in the required details. After the online rental agreement is created, it will be sent via mail to both the landlord and tenant. Both parties are required to sign the same.
The online rental agreement procedure is not only convenient but also cost-effective. Many websites now provide rent agreements online, where both parties have the option to sign the contract digitally. The signature of both parties is required after the payment for the service has been made and the rent agreement has been created online. The parties can digitally sign the agreement, or it will be sent via mail to them.
After they sign the agreement, both parties will be able to download the online rental agreement. The rent agreement needs to be printed on stamp paper or have an e-stamp affixed on the front page. While both parties can take the registration appointment online, they need to be present physically at the Sub-Registrar of Assurances office for the registration procedure. An online registered rent agreement is a legal and valid document.
A rent agreement document is a legal contract that is created between the landlord and the tenant to avoid future legal hassles of any kind and maximum transparency. In this article, we saw that it is an essential document that will include all the necessary information, terms, and conditions, as well as the clauses that are important while renting out a property. We also understood how to register a rent agreement online and what is included in the house rent agreement format. It is extremely essential for both parties to understand and study the rental agreement before signing the contract.