The residential rental agreement is usually defined as a written document that exists between the owner of a property and a renter who desires to own temporary possession of the property of the landlord.
It sets out the foundations between landlords and tenants who conform to follow in their rental relationship. It's a legal contract that is choked with crucial business details, like how long the tenant will reside within the property and also the amount of rent due every month.
Types of Rental Agreement
The agreement entered between landlord and tenant is of 2 types depending on the laws to abide by:
1. 11 months Rental agreement
One of the foremost common options which deal with getting into a property rental deal is that the prevalence of the eleven-month rental agreements. This kind of agreement is most preferable by landlord because of the laws which more in his favour. It is a comprehensive agreement, protecting the rights of each landlord. 11 months agreement is just like a license for the tenant to occupy the premises for a short duration. It provides the flexibility to landlord to take more measures to take in case of eviction of tenant from the property
2. Over 11 months Rental Agreement
Rental Agreement that is over twelve months has to be compelled to abide by strict rent management laws that are largely favorable to the tenants, which is the reason due to which this type of agreement is not much preferable by landlord. Also, the right to ownership of the property gets transferred from the landlords to the tenants for an indefinite period which is why most of the tenants refuses to vacate and it becomes difficult for landlord to evict the tenant.
However, at the expiration of the above agreement there is an option for both landlord and tenant to renew the agreement.
What are the documents required for Residential Rental Agreement?
Mainly Aadhar card and PAN card being valid proof shall be required of all parties (Landlord, Tenant and a pair of witnesses) for cross verification.
What should a Rental Agreement contain?
A rental agreement shall include the terms and conditions on which the property is rented.
1. TENURE OF PROPERTY: The tenure of the property for which it is made between landlord and tenant should be clearly specified
2. RENT VALUE AND DATE OF DEPOSIT: The amount which a tenant has agreed to pay to landlord every month should be clearly specified. Also the date upto which rent value should be deposited should be mentioned along with the penal charges, if not paid within term defined
3. SECURITY AMOUNT: Upon execution of the agreement, Tenant deposits with Landlord a security deposit which is refundable at the expiration of term.
4. REFRESHMENTS: The rent agreement could also mention the facilities, such as parking space or the usage of society’s gym, or other refreshments included in the rent.
5. MAINTENANCE CHARGE: There are additional monthly charges paid for the maintenance. A tenant should be well aware of the same.
6. NOTICE PERIOD: The agreement should also specify the notice period and penalty for cancelling the agreement without completing the specified period.
7. RENT ESCLATION CLAUSE: This clause should be checked by the tenant that landlord might increase the rent because of the increase in the rentals and at what certain percentage it would be increased.
8. SALE OF HOUSE: The agreement should also specify the clause for sale If the owner decides to sell the house during the term of the rent agreement. 9. ACCESS TO PROPERTY TAX: Tenant has a right to access the documents which state the property tax has been paid by the landlord. 10. NUMBER OF OCCUPANTS: This clause should specify in order to avoid the Tenant agrees that the House shall be occupied by no more than
11. UTILITIES: Tenant shall be responsible for paying for all minor repair work for installed electrical appliances required on the premises.
12. GOVERNING LAW: It is to be agreed by both the party that this agreement shall be governed by, construed, and enforced in accordance with the laws of the [State of Governing Law].
The above list is not exhaustive. The terms of Rental Agreement varies.
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