Tenancy agreement: Are you aware of the essentials?

An appropriate tenancy agreement is an important aspect while finding a new tenant. Having a good tenant is as having a good home. If you are planning to rent out your property in India, it is very important that you have a well drafted tenancy agreement. This will make the renting procedure between the owner and the tenant an easier one. Both the parties are equally responsible for having an appropriate tenancy agreement. A tenancy agreement is required in order to cover the rights and obligations of both the owner and the tenant.

This will be applied in case of a lessor and a lessee. The lessor can either be the owner of the property or have the POA (Power of Attorney). The lease agreement can be signed by the owner of the house or the POA holder.

A tenancy agreement has various principles and characteristics which should be included;

The basic information which has to be added in a tenancy agreement is the name and the address of both the owner and the tenant.

• The appropriate details of the property rented.
• The precise date of the rented property and its commencement.
• The agreement will have the duration of the lease or the tenancy.
• The rent amount which has to be paid by the tenant will be mentioned.
• The frequency and the dates of the payment.
• The security deposit and the advance rent.
• The grounds for termination
• The notice period in case of termination.
• The rent escalation clause
• The conditions for the renewal of the lease.

Terms you can include in your tenancy agreement

• The repairs and the maintenance: The rental agreement will have it clearly mentioned about the duties of the owner and the tenant on the sharing of the home maintenance and repairs.
• Charges incurred for the termination: Another important clause in the rental agreement will be the charges incurred at the time of termination of the lease. Apart from just the mandatory expenses the tenant has to pay the charges for the wear and tear of the home. Any damage done to the property should be paid by the tenant.
• The upgrades to be done by the tenant: Every rental agreement should have the specific fixtures and the fittings mentioned which are to be provided by the tenant. The decided parking space also should be specified in the agreement.
• Delayed rent fee: The agreement should include the amount of the late fee and the amount past due the rent. The landlord has every right to impose the penalty for the delayed rent.
• Number of occupants: The agreement has to include the number of people staying in the rented property. Most of the owners allow a certain number of people to stay in the rented property for a certain number of days, but if the person stays for more than what is mentioned in the agreement, he has to pay a penalty.
• The condition of the premises: The agreement will have a clause stating the condition of the premises at the beginning of the tenancy period as well as the tenant’s responsibility for the condition of the premises after the completion of the tenancy period.
• Alterations of the property: The rental agreement should clearly mention the alterations to be done and not to be done by the tenant.
• Right to entry and inspection: The agreement will have a clause stating that the owner has every right to enter and inspect the rented home while the tenant is residing by an advance notice.
• The decided rent amount: the owner should decide the rent amount based on the location, type of construction, accessibility and availability of various things.

Henceforth the above are the basic essential clauses which should be added while renting out a property.

Read More related articles:
Evicting a Tenant
Guidance For Renting-out Your Property
Buy Property to Rent-Out – A Good Investment