But before you take a property on rent, it is very important to know the terms and conditions and execute a rent agreement.
A rent agreement is a legal agreement between the landlord and the tenant that ensures legal recourse later in case there is a problem between the parties, which is why it’s important to be careful about the clauses included in the agreement.
Here are a few must-have clauses for the rent agreement.
Monthly Rental, security deposit, other payments-
The rent agreement should have a clear mention that the amount of rent that one has to pay each month and the due date by which it should be paid.
In most cases, landlords ask for a security deposit which is usually equal to one- or two months’ rent amount. Mention the security amount in the agreement and when it will get refunded.
Also, the agreement ensures that what else one has to pay for like electricity, water, PNG, maintenance, and so on. Also, it should be clearly mentioned if there is a separate meter for utility connections based on which bills will be paid or there’s a fixed amount every month.
Duration of agreement and renewal criteria
Typically, the tenure for a rent agreement is 11 months as per the law. However, one can enter into an agreement for a longer period as well. But it is to be made sure that the tenure is clearly mentioned.
Also, the lock-in period needs to be clarified, during which neither the tenant nor the landlord can terminate the agreement, and ensure it’s mentioned in the agreement as well.
Typically, when the tenant vacates the house before the end of the lock-in period, the security deposit gets forfeited by the landlord. Similarly, if the landlord wants the house vacated before the end of the lock-in period, she has to compensate the tenant by paying an amount equal to the security deposit, in addition to the actual security deposit refund.
It is worth mentioning that the lock-in period is not the same as the notice period, which typically lasts one or two months. If the notice period is two months, one will have to give a two-month notice to the landlord in case of a plan to vacate the house. However, the notice period is typically not valid during the lock-in period for either party.
List of fittings, fixtures
The agreement should also have a mention of the house one is 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, it is to be made 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.
Registration of agreement
After the agreement is detailed and signed by both parties, it should be registered with the authorities. In case of disputes, unregistered rent agreements are not considered as primary evidence by the court and you may have to provide other supporting documents to prove stand.
To register a rent agreement, one must bear charges such as stamp duty and registration fee. The charges are typically shared by the tenants and the landlords but mention that in the agreement.
Restrictions
In many cases, landlords do not allow tenants to keep pets or park vehicles inside the premises. Things like this should be discussed before finalizing a house on rent. Other issues to clarify include whether one can use the terrace, parking space, garden, or any other amenities in the society.
Landlords typically keep the original copy of the rent agreement, but a copy of the agreement should also be the tenant.