Reasons to Create a Rental Agreement

For those trying to rent their assets, those considering renting a property, and of course, those seeking a means of habitation in a large metropolis, a rental agreement is essential. Read to know the reasons to create a rental agreement.

A written or verbal contract known as a rental agreement is what a landlord uses to grant a temporary tenant use and occupancy of their property. A rental agreement typically has a monthly period since the parties must renew it each month after it expires. The tenant grants the landlord the agreed-upon rent as consideration for the tenancy. 

A rent agreement is a binding legal contract created between the homeowner of the property and the prospective tenant. Oddly, one of the legal papers we should pay more attention to is one we don’t. The agreement, which is an essential legal document/contract, contains all the details, terms, conditions, and clauses related to renting out a property. It includes items like your monthly rent, security deposits, and details on the property, including size, address, type, and the course length of the contract. It is crucial that you carefully study the rent agreement’s terms and conditions before signing it.

Process of Registration of the Rental Agreement

The discussion of essential provisions that must be included is the first step in creating a rental agreement. The clauses in the lease are negotiable between the landlord and the tenant. A deed is prepared and verified by both parties after the clauses are settled. Remember that certain essential provisions shouldn’t be left out, such as the deposit, monthly rent, lock-in time, maintenance fees, and numerous others.

The prepared document would then be printed on stamp paper that has been advised for purchase at the following stage. Then, in the presence of two spectators who also sign the deed, the renter and landlord must affix their signatures where specified in the contract. Next, the contract is recorded with the neighborhood sub-registrar’s office. 

Why Does One Require a Rental Agreement?

Let’s examine a few of the frequent problems that could occasionally result in future legal issues:

  • Landlord’s unreasonable rent hike
  • If the landlord and renter do not have a clear knowledge of high and minor maintenance costs
  • Tenant annoyance might result from frequent visits or inspections by the landlord
  • Tenants are disturbing the neighbors and making the property a nuisance
  • The tenant has not made timely rent payments
  • There are more occupants than anticipated in the rented space
  • Even after the lease’s end, the tenant hasn’t left the property
  • The tenant receives all notices from municipal corporations, banks, etc., if the landlord does not make timely payments of loans, property taxes, EMIs, etc.
  • The landlord provided incorrect information on the facilities available
  • The property is used by the tenant for illicit or commercial purposes.

Advantages of Creating a Rental Agreement 

Have you ever considered the benefits of having a rental agreement for your home? It is more than just a contract between you and the owner of your home. The use of a leasing agreement is widespread and advantageous. 

  • Reduces Disputes Between Tenants and Landlord

Make sure to request a rental agreement if you are renting a house or an apartment. Let’s say you paid the down payment, but unfortunately for you, your owner claims you didn’t, in which case the rental agreement will protect you. Avoid paying the rent with cash because there will be no record of the transaction.

  • Prevents You From Having to Pay for Any Home Damages

If there were any previous damages when you moved into your new house, make sure to notify the owner and note it on the agreement. A rental agreement will prevent you from being responsible for home damage in this manner.

  • Rental Agreements Provide Evidence of Addresses

Your presence in the city is confirmed by the rental agreement, which also serves as address verification for a variety of financial operations.

  • Serves as Evidence for Bank Loans

An address proof will be required of you if you are requesting a bank loan. The rental agreement will save you in this situation and serves as a more reliable address proof than other documents.

  • Aids in Loan and Investment

Consider the possibility that you may require a rental agreement as one of the proofs if you were lending someone money or investing in real estate. This guarantees that the lessee is bound by the law.

  • Registration for Vehicles

A rental agreement duly registered is required for new car registration, per RTO regulations. About crime and illicit activity, it is made necessary.

  • Rental Agreements Serve as Identification Documents

Identity evidence will be required everywhere to prepare the documents, such as affidavits, college identification cards, pan cards, and passports. A rental agreement will be added to the list of documents along with other ones like a driver’s license and an Aadhar card as identification evidence.

  • BMTC Requests a Yearly Pass in the Rental Agreement

A registered rental agreement must be certified by a government representative if you desire a yearly bus pass. The rental agreement is not required for the monthly or daily pass.

A registered rental agreement will cover all immovable properties, whether commercial or residential, inherited property, and any other land-related benefits, according to the Registration Act of 1908. These properties must be registered if they are leased to tenants for a period longer than 11 months. Registration is not necessary for leases lasting less than a year. Nevertheless, it is advised. If there is no formal rent agreement, it may be difficult to settle any future disagreements. 

The following clauses must be present in the format of the rental agreement:

  • The lock-in period is the time frame in which either the tenant or the landlord may end the lease
  • If the tenant is unable to make the agreed-upon rent payment, the landlord may impose a minor punishment
  • The house rental agreement type must specify any painting, upkeep, and repairs that must be done. The obligations of the owner and renter should be clearly stated in the clause.


To avoid any future legal issues of any type and to provide maximum transparency, the tenant and the landlord write a rent agreement document. Making a document of the agreement with a recognized government agency is the procedure of registration. This procedure is crucial since only the registered rent agreement is accepted as evidence before a court of law: in the event of any disagreement. Obtaining a recorded rent agreement from the authorized registrar is crucial. 

Read More :


Back to top button


Remove Adblocker Extension