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A rent agreement is an agreement, usually written, to govern the relationship between the owner of a property and the rentee who desires to have temporary possession or enjoyment of such property.
Rentor is either the owner of a property or anyone who has the legal right to rent out such property.
Rentee or tenant is someone who desires to have temporary possession or enjoyment of the rentor’s property. This can either be individual(s) or company(ies).
Essentials of a rent agreement
Registered and stamped
If your rental period exceeds one year then registration of the agreement becomes essential. Even otherwise, a registered and stamped agreement holds well in case of disputes. Your agreement needs to be on a stamp paper and it needs to be registered with the Registrar. The stamp duty varies from State to State.
Legal names of the parties and rental period
The rent agreement should clearly specify the rentor and rentee’s legal names and other identifying details like parent’s, guardian’s or spouse’s names, addresses, etc. It should also mention the rental period i.e., start date and end date of the agreement. It should include details of what happens after the rental period – whether the agreement can be mutually renewed or whether it would be self-renewed if neither parties opt-out, subject to legal compliances.
Rent amount and date of payment
It should include the agreed rent amount and the due date when it becomes payable. The rent amount for the rental period should be fixed and may include an option for modification at the time of renewal of the agreement.
It should clearly mention if the rent amount includes other utility charges like maintenance, water bill, etc. It should also lay down the fixed charges and details of who is responsible to pay which bill.
Security deposit details
It should include the security deposit amount to be paid by the rentee and details of probable deductions by the rentor. It should also lay down the refund mechanism to be followed by the rentor – amount, date, mode, etc.
Eviction and notice period
It should mention circumstances where the rentor or rentee can require eviction and the notice period that they’d need to provide the other party beforehand.
Are you one of these?
- An owner willing to rent out their property
- Any person authorized by the owner to rent out a property
- A person desiring to temporarily use, possess or enjoy a rental property
- A company or business looking to rent in a property
- A group of people, businesses or companies looking to jointly rent in a property
Then you definitely need a rent agreement
Why do you need a rent agreement?
- Right to receive regular rent
A rent agreement clearly places the responsibility upon the rentee to pay the agreed rent at regular, pre-decided intervals or dates.
- Guarantee of proper maintenance of your property by the rentee
It allows you to specifically mention the consequences of damage to your property caused by the rentee, like a deduction from the security deposit amount.
- Right to demand eviction
Based on the eviction clause and the agreed notice period, if any, you have the right to demand the rentee to evict your property without any repercussions.
- Right to live in, possess or enjoy the property
A rent agreement gives you the right to undisturbed possession and enjoyment of the rentor’s property according to the terms of this agreement.
- Guarantee of refund of security deposit
In most cases, the security deposit paid by you at the start of the rental period is relatively high. An agreement will ensure that there are no unreasonable deductions by the rentor and you get back the right amount, in totality.
- Clarity of your rights
Your enjoyment rights may include several rights like the right to keep pets, invite visitors, relatives, etc. and parking rights. An agreement will ensure that you are aware of all your rights and can avoid any future disputes with the rentor.
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