All About Rent Agreement

Introduction:

There are so many agreements that we have heard about in our life. And all of them are important for us one way or the other, they help us to deal with our day to day life problems. The agreement basically means by signing a piece of paper (an agreement paper) and for a period of time get rid of your problems related to that specific thing. One of them is a rental agreement. It basically deals with property issues in order to rent. This agreement (rental agreement) basically signed between two parties, which is landlord and tenant. So, here landlord means a person who rented out his property, land or accommodation, and tenant means a person who settles or occupy an area whether it’s a land or a property rented by a landlord.

 It is abiding by the contract and follows the rules, regulations, responsibilities and rights. Thus, it becomes a legally binding contract between the parties. This agreement is consist of all the details (includes the cost of the rent, amount of the security deposit, date of depositing the rent, and other conditions of using the premises) which has already mentioned by the landlord or the owner of the property in order to rent. And there are laws made on this agreement also. And also if someone violates the rules or the violation of the agreement happens in any case then the afflicted party has the right to apply in civil court for relief.

In India, the rental agreement laws are state laws in order to enact to govern the rental agreements in various aspects. It comes under the ambit of the Rent Control Act. Each state has its own Rent Control Act. In order to see that there are laws are like Rent Control Act (1999) Maharashtra, Tamil Nadu Buildings (Lease and Rent Control) Act (1960), Rent Control Act (1958) Delhi. These laws are made to solve disputes between the two parties (landlord and tenants) in their respective states. Rental laws provide landlords with their right or ability to evict (to remove the tenant by taking legal actions) and provide security for the tenants.

The main features regarding rental laws which are existing in India are as follows:

• There are so many laws imposed on a person in order to rent out a property for both residential and commercial use. The laws are imposed irrespective of price and size of the property being rented to help the potential of the tenants identify and secure good rental convenience.

• These laws are made to govern the rental laws or issues which are related to rates like fair rents are imposed within the standardized rental rates that may vary from one state to the other state. And the landlord is not allowed to charge tenants beyond these rates.

• These laws are also made to protect the tenants from unfair eviction by the landlord due to any kind of discrimination.

• The rental laws also define responsibilities of a landlord and his/her gratitude towards the tenant, it also includes conditions, terms and policies for the maintenance of the property which is owned by the landlord.

• It also defines the rights of the landlords that they can use in case if a tenant is not able to fulfil their gratitude on paying rents on time or misusing the property in any manner or harming the property. In this case, the landlord has the right to object or file a case or take any legal action against the use of his property as per mentioned in the agreement. 

The rental agreement is subject to the Transfer of Property Act (TPA). It handover the responsibilities of the landlord including disclosure of information regarding material defects in the property. The regulations of rental agreement in India on tenants and landlord are archaic.  The national government is hoping the local bodies to rest these laws in order to encourage investments in housing and construction.

Registration of Rental Agreement Online

• Firstly, you have to visit the authorized website of the government.

• Then you have to find online the option of rent agreement on the main page.

• After that you have to choose the jurisdiction from that list.

• Now you have to fill all your details and the details of the other party.

• The you need to fill the details of the tenant and landlord.

• After you are done with it, you have to the next step which is the information of rental agreement.

A Rental Agreement document consists of:

• The mode of payment either in cash, cheque or demand draft and the amount of the rent was decided by both the parties. And also, it must include the duration for which the rent has to be paid. Serviced apartments, paying guest, and other short- term accommodation required payment on a weekly or sometimes daily basis. And the long term payments are paid on monthly basis.

• In some cases, the landlords also include or add some lifestyle restriction also in the agreement. This is one way or the other unfair for the tenant. And this is very common and mostly followed in South India, where the landlords restrict and also mentioned in their rental agreement that the tenant is not allowed to prepare non-vegetarian food in the premises. And in Maharashtra, the tenants face problems related to the restrictions as marital status, gender etc.

• And some basic necessary utilities are there such as gas (exceptional), electricity (compulsory), phone (exceptional), television (exception), internet (exceptional), and water which is compulsory and it is also included in the rental agreement. And also the in the agreement it has also mentioned that either the rent has been paid collectively or paid separately.

There are some significant aspects which have to be mentioned in the format of the Rental Agreement:

• Clauses defining in the agreement if the expectations are not met on time.
• If the lease is terminated then deposits have to return.
• There will be clarity of costs such as society fees, municipal taxes and other charges.
• The consistency of the license fee should be paid in the entire period of time.

While preparing the rental agreement, all the clauses have to read deeply and properly. In order to make an agreement, this includes all the essential clauses and makes a valid and a strong rent agreement. And also there is an option of referring the sample lease agreements which is available online. In the agreement, there are instructions or directions which help to form an agreement protecting the interests of both the parties. The agreement is made on the basis of trust so that there is no chance of misunderstanding or disagreements in the future. The landlord has to provide a copy of the agreement to each of his tenant who signs it. The tenant can even as or request for a free replacement copy from the landlord. And after the agreement is done from both the sides/ parties then it can proceed for further registration of the same. And our government has provided the hassle-free e-registration process which is an easy and online process for a rental agreement for the convenient of the tenant and the landlord. And the agreement is approved by the government-approved doorstep service providers. And in few states of India, the process of rental agreement can be done through the online process also, like in Delhi and Mumbai. The basis required documents for the registration are Aadhar Card and Pan Card Number of the landlord, tenant and the other two as witnesses. And when the agreement is registered then registration fees has to be paid (this vary from state to state) and stamp duty also done.

Transfer of Property Act, 1882  vs  Rent Agreement

The Transfer of Property Act, 1882 of Section 5 defines that, the transfer of property from one living person to one or more person in present or in the future or to himself only.  There will no transfer of property takes place in the future. The transferee will not be a competent person like a transferor. And the transferee can be an insane or child in a mother’s womb or a minor also. There are five types of transfer :

• Mortgage: Transfer of a limited interest during the time of property.

• Sale: Its a process of selling out the property and the consideration is money.

• Lease: It means to give some rights to enjoy an immovable property for a period of time.

• Gift: It is basically gifting a piece of land, there is no consideration.

• Exchange: Its like sale. But differ in consideration. In this, there is an exchange of property. There is a consideration but not the money. 

But in the case of the rental agreement, there is no transfer of property. A person is giving his/ her property to another for a period of time on the name of renting out his property. This agreement can’t be done with the minor or any insane.

Conclusion

The rental agreement is an agreement between two parties (landlord and the tenant). The same has to be registered or submitted to the rental Authority (previously, the rental agreements were submitted to the sub-registrar’s office). And then the work of the authority is to copy that same data into the database, so that whenever they need any information regarding that agreement they can easily get it by visiting their website. The main duty of the landlord and the tenant is that within two months after the signing of the agreement it is compulsory that they have to inform the rent authority about the tenancy agreement. And then the work of the rent authority is that within seven days they will issue a unique identification number for both the parties.

References:

1. Property law in India- Real Estate Laws- Global Property Guide   www.globalpropertyguide.com
2. Rights of a tenant under the Indian law- Portiqo   www.portiqo.com
3. Legal Rights of a Landlord in India     www.makaan.com