Rent Agreement

Rent agreements are essential documents needed before hiring a property or space. Without these bonds, one cannot be assured of complete security and stability. These agreements help secure the owner's property and, at the same hour, give tenants a reliable stay. To know all details about rent agreements, read to the end. We have all insights to assist you perfectly.

Rent Agreement: What Is It?

This agreement is a document that is drafted or signed by the tenant and owner to initiate and secure a rental period. Rent agreements list all details about the parties, i.e., the owner, the tenant, and all the terms structured in the tenancy. The parties need to agree and sign this bond to commence further with the other procedures.

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Validity of the Agreement

To save owners, renters, and additional expenses, one must avoid making a verbal agreement. Such agreements are not considered valid and do not hold any proof. Some individuals also document and draft a rent agreement but fail to register. Again, along with a written document, registration is important.

Both parties are held accountable to bear a registration fee if a rent bond is drafted and registered. The owner must also record the rental income after the bond attains legal validity. But, drafting a rent agreement without registering it is not legal and can be highly risky for the business and the parties, specifically in case of disputes.

It does not acquire legal validity until a rent agreement is not registered with the sub-registrar's office. Both the parties need to agree to the terms listed in the agreement, and the bond should be favorable to them for it to get registered. After creating the agreement, the landlord must get a copy of the bond printed on stamp paper. After the owner and the renter have signed the bond with at least 2 witnesses, they must register the agreement and pay the necessary fees to proceed.

Lastly, the owner and renter must be present before the authorities when demanded to get their rental agreement registered successfully.

Key aspects of a rent agreement

• Details of owner and tenant: Name and Address.
• Signs of both parties.
• Rent amount.
• Deposit amount.
• Maintenance fees.
• Rent duration.
• Duties/rights of the owner.
• Duties/rights of the renter.

Vital terms to mention in the rent agreement

For renters

Token and deposit amount When the renter moves out, the bond must precisely list the security deposit and the terms related to the same. Must also list the token amount that the renter has given to the landlord.

Number of tenants All the occupants who reside on the property must be mentioned in the agreement. Also, the bond must list terms associated with adding new members.

Repairs One must also mention the party providing the repair and other relatable costs.

Maintenance The bond must properly state which party will be liable to bear the monthly maintenance.

Visitors Visiting timings and relatable clauses must also be listed in the document.

Pet terms Not all landlords permit pets, so listing terms related to this aspect is vital.

Rent receipt To benefit from tax and other components, one must submit their tax receipt to the employer. So, all renters must ensure that they take these receipts and submit them to the landlord after initiating the payment. One does not need to take these receipts every month. They can be collected on a quarterly, annual, or half-yearly basis.

For Owners

• Terms related to vacating the property.
• Visiting time.
• Property damage and its consequences on the renter.
• Terms related to subletting.

Rent hike As per the Draft Model Tenancy Act, 2019, owners do not have any authority to hike the rent for the entire rental period mentioned in the agreement. If the rent expires after a specific time, for instance, the owner cannot raise the rent each month or every 15 days. Only after the bond has expired and a new one is created can the owner demand an appraisal from the tenant. Usually, the amount does not exceed ten percent and must be increased within these limits. Further, the owner must extend three months to the tenant before hiking the rent as per the act.

Penalties for Delays in Rent Payments

The draft also clearly states that if a tenant exceeds their stay without a new registration, they will have to pay double their rent in the initial two months and 4 times more in the following months.

Benefits of Rent Agreements One must know the perks of using a rent agreement before drafting. Identifying these profits can assist you in making a suitable rent bond for your property.

1. Saves Damage Expenses 
   

   Along with communicating about damages, it is also necessary to list them in the agreement. A word with the landlord is good but mentioning it in the agreement leaves no space for confusion for both the parties.

2. Necessary for Bank Loans 
   

   If you wish to opt for bank loans, you necessitate a rent agreement. These documents are vital for submitting valid address proof.

3. Identity proofs 
   

   Most important documents demand an address proof for their completion. Without the rental agreement, you will not be able to issue a passport, license, and other important papers if you reside as a renter. So, acquiring this document is a must for apt use.

Rent agreements must be issued before moving into any property. These vital documents play a significant role in better security and reliability. Use these important papers to safeguard your stay and remove the hassle of other procedures.

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