Are you looking for a place to take on rent or have zeroed in on one? Are you about to sign an agreement to take place on rent, be it for residential or commercial purposes? Read on to know more about ‘things to know before signing a rental agreement.’
What is a Rental Agreement?
A rental agreement is a legal document that is entered between a landlord and a tenant. It states the terms and conditions that the two parties come into an understanding about when the landlord rents out space to the tenant.
It has certain features, like the details about the location of the property, the details of the Patta Chitta, the details of the tenant, the rent amount, the rent period, and so on. Police verification on behalf of both parties is an essential aspect of this process. As there is a huge demand for rented properties, an agreement of this kind ensures that the interest of both the tenant and landlord is taken care of.
Who Can Be a Witness in a Rent Agreement?
Besides the parties directly involved, this agreement is signed by two witnesses. These are people who are not directly a party to the contract. They could be someone you trust, like a close friend. Often, the real estate agent doubles up as a witness. The signatures of the witnesses give validity to the document.
Who Creates the Rent Agreement?
Usually, the real estate agent, the person who brings together the landlord and tenant, frames the Rental agreement online. It is immaterial whether an agreement is related to a property for a residential purpose or a commercial purpose. The value of the stamp paper is calculated as 1% of the monthly rental plus annual deposit or ₹500, whatever is lower. In case the rent agreement is for a period of 11 months, then registering the same is not mandatory, but it is advisable all the same. It is always better to be over-cautious and extra safe than be sorry later.
What Does the Rent Agreement State?
The rent agreement states the rental rules and deals that the tenant and landlord agree upon. It includes the names of the two parties and the address of the property being put on rent. It also states the period for which the land is being given on rent on Property Consultancy Services. This is usually for a period of 11 months. If the same needs to be renewed at the end of the period, then what would the subsequent terms and conditions be? It should also be stated clearly.
The rent amount should be stated in the agreement. In case there are any additional charges that the tenant has to take care of, besides the monthly rent, like maintenance, electricity bill, gas bill, parking charges, security, and water charges, then all these should be mentioned in the rent agreement. In case the landlord is going to take care of it, that, too, should be stated in the agreement.
The security amount that the tenant gives in advance is to be mentioned in the agreement. This is like a security deposit with the landlord and is usually used for any repair work that might be required after the tenant vacates the rented accommodation.
The date by which each month the tenant will pay the rent is stated in the agreement and also the penalty in case he fails to do so. If the landlord wants to increase the rent after a certain period of time, then the rent acceleration clause should be clearly mentioned. The period post which the rent would be increased should be clearly mentioned, if not the exact date. The facilities that are available for the tenant are clearly stated in the rent agreement. Also, the process of bbmp property tax rate Bangalore is simplified by our experts.
There should be an accountability clause in case either party is not able to continue with the agreed terms and conditions of the contract. A notice period, usually 1 month, is served by the landlord to the tenant in case he wants the premises vacated and vice versa. If either party cannot stick to this one-month notice period, then he/she is liable for a penalty, and the other party can take legal action about this. This, too, is mentioned in the agreement.
The agreement is framed on stamped paper, the cost of which is borne by the landlord.
What Aspects Should a Tenant Be Considering Before Taking a Place on Rent?
The tenant has full rights and should go through the agreement in detail. He should clarify any doubts he has. He should also see all last paid bills related to maintenance, gas, electricity, water, and so on. He should make sure that the property he is renting belongs to the landlord. He can take a copy of the agreement, go through it thoroughly, and sign it when he is in full agreement with what it states.
Paying a Visit to the Property
Before signing the rental agreement, the tenant must visit the place to check out certain things there. He should check if all the basic connections, like electricity and water, and their meters, are in good condition. The appliances there should be in good working conditions. Also, all the doors and windows should open and close properly. The walls ought to be in sound and strong condition. In case something is dysfunctional, it should be conveyed to the agent and corrected. The house or property is supposed to be handed over in proper working condition. That’s the reason why the tenant should never feel embarrassed about speaking up about anything that is not in place or not functional.
Broadly speaking, check out that the following are definitely mentioned in the rental agreement and that they are as per the agreement between you and the landlord.
- Details of landlord
- Details of tenant
- Details of property
- Rent tenure
- Rent amount
- Deposit amount
- Rent payment date
- Penalty due to late rent payment
- Additional cost
- Notice period and penalty
- Facilities for tenant
- Rent escalation clause
- Renewal terms after contract expiry
A clear and well-worded rent agreement should focus on keeping the best interests of both the landlord and the tenant.
Conclusion
A rental agreement is a legal document that outlines the terms and conditions of a rental property. It usually includes information about the renter, the landlord and the property. The Rental agreement is an important document because it can help both parties understand their rights and responsibilities. The agreement should be signed by both parties to confirm that they have read through it and agree to its terms.
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