Fundamentals to Include in a Tenancy Agreement
Renting your property in India is a nice source of income but can create a chaos if you are not aware of the requisites needed before renting your property. It is very important that you find a good tenant while renting it out. Having a well drafted rental agreement with better explanations will reduce your chances of creating a dispute amongst both the parties.
A lease or the rental agreement should cover all the rights and obligations of both the owner and the tenant. The owner can either own the property or can have the POA (power of attorney). A rental/lease agreement is a legal document stating that owner and the tenant agree to follow the rental rules and the deal. The documents include various aspects like the amount of time a tenant can reside in the given property, the amount to be paid and the basic terms of tenancy. Following are the few points which need to be considered before signing a rental agreement;
People involved: The people involved while signing a rental agreement can be owner and the tenant. Part from these two; there can be a presence of the guarantor who assures that the rent will be paid on time even if the tenant fails to pay.
Names of all the people renting: It is very important that the owner has to ensure the registration of all the members staying in the rented home. It can be a child, a bachelor, a spinster and so on. Any member staying under the rented roof will be considered as a tenant at the time of signing an agreement.
Doing this will divide the responsibility of all the tenants and in the proper usage of the property. It is a legal procedure that every individual staying as a tenant is liable to pay the rent in case the actual tenant fails to pay the rent. Also the owner can terminate the tenancy in case of any violations as per the rental agreement.
Occupying limit: The agreement which is signed by both the parties should clearly specify that the selected area can be occupied only by the people who are registered as tenants. This gives the owner the complete authority to imply rules on the tenants and also to limit the tenants. In case if there is an additional member residing on your property without your consent, he/she can be evicted from the home.
Tenancy term: Before you sign an agreement, you should make sure that you clearly tell the tenant about the number of years he/she will be residing in your home. Both the tenant and the owner have to agree on this. Also every document which is signed should state if the agreement is rental or a fixed one. Rental agreements are based on every month and can be self-renewed unless the tenant evicts the person. A leased property is based on years considering the prolonged stay and the suppleness of the agreement.
The rent payment procedure: The rental agreement signed between both the parties has to clearly mention the amount the tenant will be paying. Also the due date and the payment procedures like; online, in account or in hand has to be mentioned. Furthermore in order to avoid confusions, explain the details like an acceptable payment method, the due date followed by a penalty, grace time to pay the rent and penalties in case of a check bounce.
Security deposits: In various situations, the amount of security deposits is a cause for frequent arguments between the owner and the tenant. In order to avoid such issues you should clearly mention about the amount to be paid as security deposit, the usage of the deposit, the date of returning the deposit, deductions out of it, for the usage of non-returnable fee and the place where the security deposit is held with or without interest.
Maintenance: This is one of the perfect mediums through which an owner can defend himself by withholding the tenant’s amount. The rental agreement signed by both the parties should clearly divide the maintenance and repairing duties. It includes the tenant’s duty to keep the rented area clean and tidy without causing any damage. And in case any damage is caused, the tenant has to pay for the damage done. The tenant can further alert the owner for any damaged conditions, repair requests can be done. Also the owner has to clearly mention in the agreement about the restrictions against the re modelling or adding embellishments in your home without your knowledge.
Decorum for the tenant: Every owner has certain restrictions which are to be followed by the tenants. The agreement should clearly mention the prohibited activities, the property damage and measures to be taken for complaints from the neighbours. Any illegal activity or excessive noise or usage of resources without considering other’s needs should not be carried out.
Restricted entry: These days there are increased chances of the tenants illegally evading the property of others. To avoid such situations, you should precisely mention in your rental agreement about the entry restrictions and violation rules.
Keeping pets or any other restrictions: There are various factors which can trouble an owner; in such cases it is always better that you mention each point clearly in your rental agreement in order to avoid hostile issues.
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