Rental agreements are more or less similar all over the country. It mentions various terms of the agreement,which include:
* Amount of rent to be paid every month
* The amount of safety deposit to be paid to the owner on a return basis
* Period of rental agreement
* Number of people occupying the property
* Type of lease residential or commercial
* Maintenance issues who will pay the monthly maintenance bills (in case of a property in a housing society),minor repair work charges,major repair work charges and so on
* Termination of lease rules
The rental agreement in India has been designed well to protect the rights of both the lessor and the lessee. Other clauses may be added in the agreement as per the discussions between the two parties.
Lease Agreements & Deposit
Apart from being drawn up for commercial and residential purposes,there are three types of rental agreements based on the duration of the lease:
* Week to week
* Month to month
* A fixed term,not be less than six months or more than 12 months.
The duration of the notice period prior to the termination of the lease depends on the period of the agreement. Once signed,the landlord needs to give the tenant a duplicate copy of the agreement within 10 days of signing or the tenant may withhold the rent till they receive the copy.
The safety deposit amount to be paid for the duration of the lease may be negotiated. Technically,the safety deposit amount is calculated as the first three months rent which is fully refundable subject after the amount of repair and maintenance deductions the landlord has to make. In practice,however,if the landlord is charging a higher amount of deposit,then the rent amount will be lower and vice versa. The deposit amount has to be refunded within a month or the tenant may charge an interest on the amount that is computed on a daily basis.
The Tenants Rights
The Indian rental agreement provides ample security to the tenants. Once the tenancy commences,the landlord is not allowed to infringe upon the tenants privacy. Although,periodic checks of the property are done to check on the maintenance,the landlord has to give prior information before coming or sending their representatives.
The tenant may also ask for repair work or some other changes to be made to the property if they feel it is absolutely necessary. For instance,a tenant may request installing a grill on the balcony or terrace for child proofing.
The Landlords Rights
The landlord holds the right to evict the tenants under strict circumstances if they violate any of the terms of the rental agreement. However,a prior notice of at least three weeks has to be served. Also,if the tenant terminates the lease agreement without prior intimation,the landlord has the right to withhold the full security deposit amount.
The rental agreement in India is drawn for a period of 11 months. If both the parties want to extend the lease,a new pact must be drawn a month prior to the expiry of the agreement. Further,the landlord is allowed to impose a 10 per cent raise in rent,which means:
* In accordance with the new rent amount,the security deposit amount may also be raised.
* The duration of the rental agreement may be revised.
The rest of the terms and condition will remain the same if both the parties are satisfied and a few additional clauses may be added as per their discussion.
If the agreement is not honoured by either party,they are free to take legal recourse. The rental agreement has been made flexible so that neither party may be tied down by pre-defined rules in case of exceptional circumstances. The Indian tenancy laws are strict; however,the legal procedure is long and time consuming.
A part of the problem in the system also arises from the subjectivity in the agreement that does not define the terms and conditions very clearly. When an agreement drawn concisely,the tenant and landlord benefit equally.
The author is CEO,BankBazaar.com