Renting is a real estate transaction that most of us enter into at least once in our lifetimes. It is a fairly straightforward process, you ask someone if you can occupy their house, if they let you, you’ll prepare and sign agreements and you start living there, paying a fixed monthly fee.

While a majority of Indians know the basics of renting, most of us are unaware about the changes that have occurred in the real estate market. We’re sure that at least some of you were unaware that the lease you prepare changes with the type of property. Most people have the habit of reusing an agreement they prepared years back over and over again. Well, it’s time to change that.

In legal terms, a rental agreement is a contract signed between a landlord and a tenant through which the landlord bestows upon the tenant, the right to occupy the landlord’s residential property.

How to make house rental agreement

A rental agreement, a well drafted one at that, should be in place before any rental arrangements commence. If you are a landlord who is planning to give your property on rent, you will need to sign a rental agreement. And vice versa. In short, every rental transaction should begin with the drafting of a rental agreement.

Anybody wishing to take part in a rental transaction, be it landlord or tenant can use one. However, you must be over 18 years of age to be a participant in a deed. Rental documents can be used by-

Owner/ Lessor/ Landlord: The landlord or whoever is in charge of the property, could be an attorney or organization. The lessor is any individual who grants the permission to the tenant to occupy the premises mentioned in a rental agreement.

Lessee/ Tenant: Any individual who receives the permission to occupy premises discussed in the rental agreement.

Recently, real estate market saw a slight shift from the use of common rental agreements to the use of more liberal Leave and Licence agreement. The Leave and Licence agreement, often preferred by landlords, reduces strains between the parties involved. Another perk of this agreement is that it makes eviction easier. Thats probably why it’s a popular choice among landlords.

How to make it legally valid

Every rental agreement must have a few basic things in place. Without them, a rental agreement may be considered invalid. Let’s go through the basic requirements of a rental agreement.

1. Draft a deed and verify its contents.
2. Prepared document must be then printed on stamp paper of recommended value. Stamp duty charges vary by States and must be paid by the tenant.
3. Signatures of the landlord, tenant and witnesses must be placed in appropriate places.
4. For agreements lasting for a period of 11+ months, registration is compulsory in most states. Some states do require you to register the agreement even if it is less than 11 months.

What should be included in the lease?

A rental agreement with vague clauses is worse than no contract at all. Here’s a list of clauses that must never be excluded from any rental agreement.

• Rent, deposit and maintenance charges
• Utilities available in the premises
• Maintenance responsibilities of the tenant
• Permission to sublet
• Pets
• Tenant’s limits and rights
• Situations in which landlord can enter the premises
• Grounds for tenancy termination

Frequently asked questions

1. What happens if a rental agreement is not in place?

Not having a rental agreement in place is like leaving Pandora’s box open. Ok, that’s a little exaggerated although close. No rental agreement means that both tenant and landlord are left vulnerable if a legal battle happens in the future. Some commonly seen after effects of not having a rental agreement are –

• Tenants who refuse to leave
• Landlords who increase the rent as and how he pleases
• Landlord may not be able to recover money for damages caused to the property

The list goes on. Its best that you have a rental agreement in place if you wish to avoid all kinds of horrors.

2. What is the typical term for a rental agreement?

Eleven months typically. But you can extend or shorten the term as per your wish. The general advice is to create a deed with a term of eleven months and then extending it, if needed at the end of the term.

Create a house Rental Agreement now!

Worried that the rental agreement you create won’t cover you in all contingencies? Fret not! we’ve got pre-drafted ones. Just fill in your names, address and other relevant details and you’ll have a rental agreement prepared. We will even print it on stamp paper and deliver it (not available in all areas) to an address of your choice! Create a rental agreement with us now.