What is a rent agreement? As per Wikipedia, ‘A rental agreement is a contract, usually written, between the owner of a property and a renter who desires to have temporary possession of the property’. Rental agreement should be framed with the aim of creating a mutually beneficial relationship and avoiding disputes between the tenant and the landlord.

The agreement should also specify the notice period and penalty for cancelling the agreement without completing the specified period.

Let us look at the important clauses that such agreements should cover.

Dos and don’ts for a Tenant

• Rent agreements in the country are often made on notarised stamp papers. For the document to be legal the agreement has to be registered at the local sub-registrar’s office.
• A tenant should verify whether the owner has included a rent escalation clause in the agreement, which could be used to increase the rent after a couple of months and the percentage of increase.
• Provisions relating to your tenure of stay.
• Frequency and date of rent payments. If the tenant fails to pay the rent before the predetermined period, the penal charges that he would be liable to pay.
• The time of renewal of your lease
• It is advisable to take the property on rent, after all repairs and maintenance. This way, the tenant will safeguard himself from unnecessary expenses that may crop up in future.
• The rent agreement could clearly mention the facilities, such as parking space or the usage of society’s gym, included with the property.
• It is also important to check on pending dues, such as electricity and development charges of the society. In general, the development charges are paid by the tenant.
• Rental agreements should also clearly state the booking amount (or security deposit) and as advance, in the agreement.
• It is best if the additional charges like maintenance and club charges for using these facilities are clearly spelt out, along with the person who is supposed to bear them.
• You should also make sure that there is a clause on the sale of the house. If the owner decides to sell the house during the term of the rent agreement, you should know how many months you will get to search for another suitable accommodation
• 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 concern is that his property may 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.
• Landlords can also ask for a copy of employment letter from the tenants’ employer.
• Landlords should insist on police verification.

The rent agreement, if formalised properly, helps the landlord and the tenant, and results in a good healthy relationship between the two.  Ensure you have a hassle-free stay.