7 Factors to Look for in a Rental Agreement
A rental agreement or lease contract is necessary for those contemplating renting and those trying to put their residences out for rent. This perfectly suits today’s fast-paced real estate scenario, purchasing a new home no longer appears to be a cost-effective alternative. Instead, renting seems to be the only sensible alternative until you have already saved enough money during your lifespan to purchase a new home.
When someone rents a house without going through the correct legal channels, it can be a frustrating experience. As a result, the connection between the landlord and the tenant may be strained. Furthermore, these circumstances can lead to complex court action. Fortunately, this may be prevented by adequately structuring a rent agreement. This agreement is equally essential for both parties involved since it gives covered entities to the landowner and protects the renter from any illegal demands made by the homeowner.
Below are a few of the items you should make sure are included in your rental agreement:
- Tenants’ Information and Tenancy Timeframe:
The essential thing to have in any rental agreement is the names and addresses of everyone who will be living there. It is done while considering all of the legalities of renting a home. It also serves as a proof of obligation in accepting property ownership.
The tenancy term in the agreement ensures that the renter vacates the residence at the time specified in the agreement. As a result, the landlord has a legal assurance that the renter will not unlawfully seize ownership of the site.
- Amount of Rent and Cost of Related Services:
The lease liability you must pay to the owner regularly is also included in the rent agreement. It also indicates the date upon which the tenant must pay the amount each month and any other fees related to the payments.
The rent agreement specifies maintenance expenditures and other applicable fees. The agreement also sets who is liable for the property’s maintenance and servicing costs; typically, the property owner is accountable for these costs. It also includes information regarding who is responsible for damages or the expense of small and large repairs. Finally, it eliminates any potential for misunderstanding or controversy during the tenancy.
- General Guidelines to Follow
The rent contract also includes the property owner’s general regulations that the tenant must observe. These regulations cover the upkeep of the home and the nearby areas. These restrictions usually include stipulations about subletting, alterations, and property management, among other things.
- Refundable deposit
The security deposit is yet another item addressed in any rental agreement. The security deposit is the sum of money paid by the tenant to the landlord before leasing. The amount is specified in the rental agreement, and both stakeholders sign it as a token of acceptance. It gives the tenants assurance that they will be protected from the landlord’s illegal cash demands. In addition, if a renter vacates the property without leasing, the landlord receives a specific degree of security in terms of a down payment.
- Period of Renewal
The rental contract also specifies when the agreement will be renewed. In addition, it sets that if the renter wishes to stay more than the agreement’s stated period, they must re-sign the contract.
- List of fittings, fixtures
The agreement should also have the description of the house you are taking on rent such as the floor or apartment number, area of the house, number of rooms, bathrooms, living area, kitchen and so on. If it is a furnished house, make sure there is a list of all the fixtures and fittings like beds, sofas, tables, chairs, wardrobes, number of fans, air conditioners, lights and so on.
- Clause of Exit:
This chapter is about the homeowner’s leave process during said tenancy period specified in the contract. If the renter decides to leave the place before the scheduled departure date, they must follow the exit clause’s regulations.
According to Model Tenancy Act 2021, the rental agreement should be finalized between the landlord and the tenant, signed and registered with the Rent Authority within two months of the rental deal. In case of any dispute arising between the two parties, they can approach the Rent Authority and the rental agreement signed between them will be referred to for arriving at a solution to the dispute. The Model Tenancy Act 2021 will not only minimise the points of friction between the landlord and the tenant by way of properly registered rental agreement but will also unlock the potential of the rental property armlet in India.
