The Pearl of the East and a city deemed as one of the most popular tourist locations for foreign travellers, Goa is a fine reflection of India’s early history. From awe inspiring cathedrals to pristine beaches and of course the relaxed VAT on alcohol, Goa is every traveller’s dream.
Apart from being a dream holiday destination, this state is also a very popular choice for real estate investment what with all the demand for tourist accommodation. Being a state that is much visited even during the monsoons, rental properties are in demand all around the year. So, here are some pointers to keep in mind while renting property in Goa.
How To Make Rental Agreement In Goa
List all the clauses to be included in the rental agreement and create a rough draft
Print the document on stamp paper of appropriate value
Place signatures of tenant, landlord and that of two witnesses
Register the rental agreement at local Sub-Registrar office
Preparing The Agreement
The conventional way to prepare rental agreements would be for the tenant and landlord to discuss the clauses they need with each other and putting them into a draft. A lawyer would then be required to verify the contents of the draft and then get it printed on stamp paper of due value. You can also prepare a rental agreement online now
Stamp Duty Requirements
Stamp Duty is essentially a certain amount of money which is tax levied for making any document legally valid. In the state of Goa, stamp duty for leases are charged at 7% of annual rent+deposit.
e-Stamping is still not widely prevalent in Goa, although the Government is working hard to implement it in near future. As of now, the traditional stamp paper is to be used for all intents and purposes.
Registration Of Rental Agreement
The process of registration was introduced with the idea to deter frauds and forgeries. If a document is registered it means that the parties mentioned in the deed are indeed the ones who signed the deed and that the document has not been forged in their names. It is also a method to disclose details about feuds/ existing cases on the property being discussed. In Goa, registration charges for leases are 1% of annual rent+deposit.
Types Of Rental Agreements
Following are the common types of rental agreements prevalent in use-
11-month rental agreement: Perhaps one of the most commonly used formats for rental agreements throughout India, this lease lasts for a duration of 11 months and has a clause for renewal. Most people skip registration for such agreements as the term is less than a year. However, it is not wise to pay incorrect Stamp Duty for any legal documents.
Commercial lease: Commercial leases are signed exclusively for business deals and most often involve large sums of money. Hence, registration and Stamp Duty payments are rarely overlooked. Such leases are typically signed between businesses or between an individual and a business and seeks use of a particular property as a place to conduct business. Commercial leases rarely stick to a standard format as the lease needs to be flexed based on the needs of the business.
Long term lease: Such leases are signed for terms that last years. Large sums are sometimes paid upfront and no monthly rent is paid. However, utility bills are paid by the tenant every month. When the term comes to an end, the upfront payment is returned to the tenant by the landlord.
Important Clauses To Include In Your Rental Agreement
Although most rental agreements follow more or less a pretty standard format, there are some clauses that you just cannot ignore. So make sure that the following clauses are not left out from your rental agreement –
Payments & receipts: Charges for monthly rent, security deposit and other maintenance charges must be clearly spelled out in the contract.
Pets: If the landlord has an issue with animals being kept in his property, he is expected to make the same clear by writing it down in the rental agreement.
Food habits: If the landlord does not wish to entertain non-vegetarian food within his property, he will have to spell that out clearly in the contract.
Late payment penalty: The landlord is free is to charge a fixed penalty for all late rent payment provided the details of the penalty shall be clearly mentioned in the contact.
Consequences of overstay: If the tenant continues to occupy the premises even after the term of the lease is up, the penalty that the landlord wishes to impose shall be added to the contract.
Lock-in period: Considered as a safety clause, the lock-in period refers to the minimum duration of time during which neither party can terminate the contract. Duration of the lock-in period must be compulsorily included in the contract.
Things To Keep In Mind While Renting
People who are first timers in rental transactions and people from different cities need to be even more careful than others when it comes to this. There are some factors which when overlooked, lead to dire consequences. Even if both parties seem nice, keep the following in mind –
Owner’s authenticity: Never trust a person’s spoken word claiming to be the property’s owner. Ask for documents or utility bills that prove it.
Payment receipts: Collect acknowledgement for every payment you make. Be it the monthly rent, security deposit or even maintenance charges, never make a payment without collecting a receipt.
Deductions: When the lease expires, the security deposit is often paid back to the tenant after deducting charges for painting and other valid damages. Always discuss with the landlord and ask an explanation for every deduction made from the security deposit.
Registration & notarization: Registration is often skipped by many people, however, in the event of a feud, an unregistered document will only serve as collateral evidence. As is the case with notarization. Notarization is a fraud-deterrent method, so if your document is notarized, it is solid evidence right there that the document is not fake.
Security deposit is often a few months worth of rent collected in advance as a cautionary step to prevent losses to the landlord should the tenant damage the property or stop paying rent. This is a refundable amount and is paid back without any interest at the time of contract termination. In Goa, 2-3 months worth of rent is typically collected as security deposit.
Often paid even before the contract is drawn up, the token advance is a small sum of money that serves the purpose of blocking the property for an interested tenant. Once this payment is made, the landlord is expected to discourage other potential tenants from developing an interest in the property and also that the deal is sealed. Should either party back out, he/she will be responsible for compensating for the losses incurred by the other party.