A rent agreement is a legal document which binds the landlord and the tenant to comply with the mutually-agreed conditions. It is the most crucial document in case of a dispute between the two. Therefore, utmost care should be taken in drafting the document.
It should state all terms and conditions clearly to avoid any dispute in future. “Take the help of a legal expert to draft the lease agreement. Try doing a reference check and, most important, ensure that a police verification done. Its is in the best interest of all stakeholders” says Ashok Mohanani, CMD, EKTA World. These are the points one must consider while finalising the agreement.
1) Name, address, father’s name of both the tenant and the landlord should be clearly mentioned.
2) It should be verified that the lessor is the legal owner of the property or a person duly authorised by him or a person authorised by a court to enter into such a contract.
3) The rent should be clearly mentioned (also whether it includes maintenance fee). The quantum of increase in rent and from which date should also be made clear. The mode of payment, whether in cheque or cash, plus the date of payment, is also important. Any interest to be paid in case of delayed payment should also be stated clearly.
4) The period of tenancy should be clearly mentioned. The security amount and the lock-in period are also important. How the amount will be refunded or whether it will be adjusted in the advance rent should also be clearly mentioned.
5) Who will pay water, electricity and maintenance charges is also important.
6) In case the flat is furnished, a list of fittings and fixtures should be made and penalty for damage decided in advance. The landlord should also check plumbing, electrical, sanitary fittings, etc, and mention their condition in the agreement. Details of the condition of walls, ceilings and roof top should also be mentioned so that there is no dispute over damage to the house, if there is any.
7) The purpose of tenancy should be clearly written- whether it will be used for commercial or residential purpose.
8) The process for premature termination of the lease.
9) The agreement must specify the passage, roof, park, swimming pool, car parking, library, club, gymnasium, etc, besides the demarcated property, and charges payable, if any, for these. This list is not exhaustive. The landlord and the tenant can add as many conditions as they want.