Rent Agreements are the legal understanding between the owner of a land and its renter. It falls within the gambit of residential or commercial property laws of India. When it pertains to establishing a tenancy, a lease arrangement is the most important legal file. To make a rent agreement legitimate under Indian laws, signature by both the celebrations, i.e., the property owner and renter is a must. An ideal offline or online rent arrangement format must contain all the details and conditions of the particular occupancy. These days, it is really simple to access online lease contract drafts in India. However, you constantly need to make sure that all the stipulations and terms of the rent contract operate in favor of both celebrations. Through this post, you can comprehend all the basic terms that a valid authorized rent contract should have and the numerous types of rental arrangements in India.

As specified above, an arrangement gotten ready for the function of facilitating a tenancy is a rental contract. Generally, it is the proprietor who gets the lease agreement draft and then offers it to the tenant for review and signature process. However, the terms are not necessarily only in accordance with the proprietor's interest. A lease arrangement format is only legitimate when there is mutual approval of both celebrations on all the terms and clauses. Further, the celebrations can likewise equally make modifications to any rental contract.

Rent arrangement stipulations

It does not matter if you are a landlord or the renter, it is equally essential for both parties to the lease agreement to have a clear understanding of the provisions and terms set in the agreement. The factor behind this is the truth that any uncertainty in the rent arrangement draft can turn out to be devastating in case of any future issues. Now that we understand precisely what a lease arrangement is, we will talk about one of the most fundamental and crucial provisions of a lease contract.

Details of the celebrations

The most standard requirement of a legitimate rent arrangement is the information of both the parties, i.e., occupant and landlord. Further, the renter likewise needs to guarantee that they provide the exact name and variety of the other occupants with him, as a part of that specific tenancy. The information consist of the name, permanent address, age, and occupation/profession of the parties.

Description of the rental residential or commercial property

The rental residential or commercial property doesn't need to constantly be a housing residential or commercial property. Hence, whenever you enter into a rental agreement, the arrangement should have a total description of the residential or commercial property in question. Together with its address, the list of other facilities and assets of the residential or commercial property, such as the tube lights, fans, A/C, list of any other furniture, and so on must be a part of the rental agreement. This helps avoid future clashes concerning possessions of the residential or commercial property.

Term of occupancy

In all legal arrangements, this is one of the many fundamental terms. In a lease contract, the termination clause will define the duration of the occupancy. It will likewise provide the terms for renewal of the lease contract format in between the parties.

Rent and deposit

The most essential element of any tenancy is the rent and the deposit quantity. Hence, it ought to be pointed out in the draft of the rent contract. It guarantees that both the celebrations are offered for the expenses involved. Further, ideal rent and deposit stipulations will also include the effects of failure to payment of any quantity in due time by both celebrations.

Maintenance and damages to residential or commercial property of rent arrangement

All terms connected to the upkeep and the expense and liability in case of damages to the residential or commercial property need to belong of the offline or online rent agreement.

Rules of the occupancy

This clause has the most effect on the tenant. In this provision, all the rules of the residential or commercial property should be discussed, such as:

- Whether animals are permitted or not;
- No. of residents permitted;
- Whether the landlord enables industrial transactions through their residential or commercial property or not; and so on.

Apart from these rules, the effects of not following them are also a part of this provision. These repercussions may consist of financial charges or might even result in the termination of the agreement.

Lock-in period of lease agreement

This is a stipulation that locks both parties to the contract for a certain period after its execution. Since renting a residential or commercial property is an uphill struggle, the lock-in period usually protects the interest of both celebrations. The general lock-in period in all online rent contracts is 3 months. This helps both parties in settling down.

Termination and notice of termination

Even after the end of the lock-in period, no rental arrangement can be terminated suddenly. Hence, this clause is put in location. When either celebration does anything to breach the contract, they can end the contract based upon the regards to this provision. The notification period for a rent agreement might last from one month to 3 months, depending on the mutual choice of the parties.

Police confirmation of renter

This clause safeguards the interests of the property owner. All tenants should get an authorities confirmation before performing the rent contract. This guarantees the reliability of the renter and helps in constructing trust in between the company and worker.

Types of lease contracts

When you think of types of rent contracts, one of the most basic are home lease arrangements and commercial lease deeds. However, even these fall under the following 2 subcategories of rent arrangements in India:

- Lease Agreement: the minimum period of a lease agreement or a lease deed is 12 months. People normally decide for business lease deed drafts in India. Especially since the longer period of the lease makes it simpler for service owners. With that stated, these lease contracts are governed by each state individually based upon their Rent control laws. Lastly, a fascinating element is that the lease contract typically likewise transfers the interest in the residential or commercial property to the occupant.
- Leave and License Agreement: generally, a leave and license contract exists for 11 months. This is the major distinction in between both agreements. As a result, the leave and license contracts are majorly utilized for your house rent arrangement format. Lastly, the leave and license agreement is not governed by the lease control laws of various states.

How to carry out a rent agreement in India?

The requirements for executing a rent contract in India depend upon the period of your rental contract. Based upon the duration of your contract, you can determine whether it needs registration or not. According to the Registration Act 1908, it is not obligatory to sign up a lease arrangement, if the period is for less than 12 months. If your home rent arrangement is in a leave and license format, you will not require registration to execute it.

- When Registration is not mandatory

In this scenario, when the lease arrangement is prepared, all you require to do is, print it on stamp paper (as appropriate to stamp task). Then, get a signature of both parties and 2 witnesses.

- When Registration is obligatory

In this situation, the celebrations need to sign the duly notarised rent contract on the stamp paper before the registrar. This procedure too, requires two witness signatures. Below is the list of files required for registering a rental contract:

1. Proof of ownership of the residential or commercial property;
2. Tax Receipt;
3. Passport-sized pictures of both parties & witnesses;
4. Address evidence; and
5. Route map of the residential or commercial property.

You can discover hundreds of rental agreement prepares online. However, the most crucial aspect of any legal contract is your specific requirement. Experts at LegalWiz.in will ensure that all your rights are safeguarded at all expenses. Get on a call with our specialists today. Contact us now!

Frequently Asked Questions

No, it is not mandatory to register rental arrangements in India. The obsession depends upon the duration of your rental arrangement.

This is something that both parties can choose equally. However, most of the times, the tenant bears the expenses related to rental contract registration.