Rental Agreement
Rental Agreement
Rentals are common in every place these days. Even bikes, houses, cars, and all the accessories are subjected to the purview of rental basis. The main role of the rental agreement which protects the rental products and protects the owner from the losses. Basically it gives the protection to the original owner. In case you are doing a rental business of cars. If you give the car on base of rent without the rental agreement. But the person who takes the rental, made an accident. In this case you are liable for the accident. At that time if you have a proper rental agreement for renting your car. The whole liability applies to the person who caused the accident. It protects the owner and his business. So every rental business needs an authorized rental agreement for their business protections.
WHAT IS A RENTAL AGREEMENT:
Rental agreement registration refers to the process of officially recording a Rent or lease agreement with the applicable government authority. The purpose of registering a rental agreement is to produce a fairly binding document that outlines the terms and conditions of the rental arrangement between the landlord and the tenant.
Registration provides legal validity and protection to both parties involved in the agreement. The specifics of rental agreement enrollment can vary depending on the governance, as different countries or regions may have their own rules and regulations regarding the registration of similar agreements. In some places, it may be obligatory to register rental agreements, while in others, it may be voluntary. Generally, the registration process involves submitting the rental agreement along with the necessary attestation to a government office or applicable authority.
This attestation may include evidence of identity, property power, and other applicable details. Once registered, the agreement becomes a fairly honored document, and both the landlord and tenant can seek legal remedies in case of any controversies. It’s important for landlords and tenants to be apprehensive of the original laws and regulations regarding rental agreement registration in their specific area to insure compliance and legal protection. Failure to register a rental agreement where needed may lead to legal consequences or affect the enforceability of the agreement in case of controversies.
ADVANTAGES OF A RENTAL AGREEMENT:
Split the responsibility
When it comes to renting a property, many problems arise for both the owner and the tenant. To avoid this, both can share the responsibilities such as bearing the maintenance charges, repair charges, water bill etc.by the way of splitting the responsibilities with the help of rental agreement between both the landlord and tenants creates better understanding about their roles and responsibilities to reduce the misunderstanding and disputes.
Smooth Termination
Mostly the pre-termination is a big problem, however drafting the deed gives a smoother way of termination for both the owner and the tenant. Efficient conclusion within a rental agreement is described as a seamless termination, characterized by a smooth and trouble-free resolution of the contractual arrangement between the landlord and tenant. This involves following the specified termination procedures, resolving any pending obligations, and ensuring a collaborative transition that benefits both parties.
Minimizing the cost
If the owner and the tenant are willing to draft the lease, then only the owner can fix a reasonable and bearable rent for a tenant. This prevents the tenant from paying too much of rent and whereas The responsibility for maintaining the asset does not fall on the user; instead, it rests with the individual renting it, who must ensure its continued usability which minimizes the cost of the tenant.
PARTIES TO THE RENTAL AGREEMENT:
The parties involved in the rental agreement are owner of the property(landlord) and the tenant and property manager if applicable can be added as a party to the rental agreement.
Landlord:
- The person or company who rents the property to another party in order to earn money.
- Has the responsibility of maintaining the property handle with the repairs and other safeguarding work.
- The landlord need to maintain the terms and conditions agreed upon by both the parties
Tenant
- The person or company who rents the property from the owner for a specified period of time.
- Tenant is responsible to pay the rent or lease that is agreed upon the terms and conditions.
IS IT COMPULSORY TO REGISTER A RENTAL AGREEMENT?
Registration of rental agreement is not compulsory in many areas and the requirement of registration varies based upon the jurisdiction but registering a rental agreement guarantees legal benefit to the landlord and tenant.
Here are some of the reasons why we need to register a rental agreement.
- Legal Validity: Registration of rental agreement grants a legal validity and recognition to the terms and conditions incorporated in an agreement.
- Authentication of Terms and Conditions: An registered rental agreement acts as a proof to your terms and conditions implicated by both parties landlord and tenant this registered authentication of terms and conditions was helpful in the period of disputes
- Prevention from fraudulence: Registration Of rental agreement prevents both the landlord and tenants from the fraudulent activity.
It is necessary to check with the laws and specific regulations of the jurisdiction to understand whether the registration is mandatory in your jurisdiction or not. Even Though the registration of rental agreement is not mandatory some of the landlords and tenants choose to register the rental agreement because If you ask why we need to register a Rental Agreement, the answer is that registration provides security. The alteration in the provisions needs to be incorporated only through re-registration. It also creates transparency and trust. Registration gives security to both parties.
TYPES OF RENTAL AGREEMENTS FREQUENTLY USED IN TENANCY.
1. Rent Agreement:
The rental agreement contains the basic details contracts and terms and conditions agreed upon by both the parties landlord and tenant for the temporary occupancy of the property.
The basic time period of rental agreement is 11 months tenancy agreement: This is the most common and widely used by many of us. This is a rental agreement for a period of 11 months. Usually, the landlord and the tenant renew the rental agreement at the end of the 11th month.
2. Lease Agreement:
Lease agreement is a widely used agreement compared to the rent agreement and the period of lease agreement is more than 12 months. And the governing law of lease agreement is state rent control laws.
Types of Lease Agreement:
- The commercial lease agreement: The CA which is similar to the commercial lease agreement is the one where the leasehold property is used for commercial purposes. The purpose of the use should not be domestic.
- Long-term leases agreement: A lease can also be long term. Here a lump sum of money is paid to the landlord and when the tenant vacates the premises, the same amount is returned by the landlord.
3.Leave and License Agreement:
Leave and license agreement grants another person the permission to use the property but which is not a tenancy agreement between both the parties and the period of duration is flexible for this agreement.
In this agreement the owner(licensor) grants the permission to use the property by another party (licensee) to occupy the property for a certain period of time. Like lease agreements this agreement does not grant interest of the property to the licensee. Instead of granting interest of the property the licensee merely provides the right to use property for a certain period.
IMPORTANT CLAUSES IN A RENTAL AGREEMENT IN INDIA:
- Name and Address of both parties: The agreement should contain the details of the parties such as name, address, contact details, bank account details, etc.
- Purpose of tenancy: The tenant should state the purpose of the property whether it is residential or commercial.
- Term of tenancy: The rental agreement should state the date and the end date of the tenancy.
- Deposits (advance): The terms of the return of the deposit should be mentioned in the agreement.
- Maintenance: Both parties should mention the responsibilities of the maintenance and repair service of the property to avoid disputes.
- Rules and Regulations:the rules or regulation during the tenancy period of the property need to be mentioned eg.like Restriction to pet alteration,loud noises etc.
- Contact details:the contact details of the landlord need to be specified in the rental agreement.
- Tenant Responsibility:the responsibility of the tenant to maintain the property and follow the rules of the community
- Notice period: This will help both parties to evacuate the property legally and smoothly.
The crucial step for both the tenant and landlord is to understand and review the rental agreement before signing the legal document. And it is better suggested to get legal advice before entering into an agreement to know with the legal compliance in the territory.
DIFFERENCE BETWEEN RENTAL DEED AND LEASE AGREEMENT:
Lease Agreement | Rent Agreement |
Term: The term period for lease agreement will be for a period of 12 months or more always for a longer period. | The term period of rental agreement will be very short i.e. say 11 months or less. |
Registration of the agreements: In the case of the lease, the registration is compulsory because it is a contract for a period of more than 12 months. | whereas the registration process is not required as in the case of a Rental Deed where the term of the agreement is below 12 months. |
The eviction process: The eviction process is complicated in the case of a lease | The eviction process is not complicated in the case of a rental |
Security Deposit: The security deposit is higher in the lease agreement | Whereas in rental agreement the security deposit is lesser compared to lease agreement. eg.Two or three months rent will be security deposit |
Parties: A lease agreement is entered between the lessee and lessor. | A rental agreement is entered between the landlord and tenant. |
Changes in Agreement: No changes cannot be made after the deed is signed. | Changes can be made at any time the landlord chooses. |
Maintenance Responsibility: The lessee is responsible for maintenance | The responsibility of maintenance lies with the tenant. |
FAQ
FAQ ON RENTAL AGREEMENT:
Whether A written agreement in rental deed is a good idea or not?
A rental agreement can be either written or verbal, but it is always safer for both the tenant and the landlord to have the agreement in writing. If there is a dispute between the tenant and the landlord, only this written agreement will be considered valid evidence in a court of law.
What is the Stamp duty on an 11 month Rental Agreement or Stamp Paper?
A tenancy agreement for a period of 11 months or less does not need to be registered. Therefore, it is sufficient if the said lease can be printed on stamp paper for Rs. 20 or above. For a registered lease for the company, the stamp duty is 1% of the rent plus a security deposit.
Can a landlord evict a tenant without cause?
Landlords are generally prohibited from evicting tenants without cause during the lease term in many jurisdictions. However, after the lease expires, some areas permit landlords to opt not to renew the lease without stating a specific reason. It's important to review local landlord-tenant laws for precise regulations in your area.
If disputes arise between the landlord and tenant, how can it be resolved?
Resolving landlord-tenant disputes necessitates open communication, mediation, lease scrutiny, legal counsel, engagement with housing authorities, utilization of small claims court, arbitration, collaboration with tenant rights organizations, and comprehensive documentation. A nuanced understanding of local laws is imperative for achieving an equitable resolution.
Related Videos
Previous
Next