Rental Agreement: House Rent Agreement Sample Format and Terms
Rental Agreement
A rental agreement must be signed between the tenant and the property owner if you wish to rent out a house or other piece of property. An official contract signed by the property owner and tenant is known as a rental agreement. A tenant is a person who pays the rental fee in order to temporarily occupy the owner’s property. During the duration specified in the rental agreement, the renter is permitted to occupy or use the owner’s property.
A rental agreement, sometimes known as a rent deed or lease deed, includes the following essential information: the residential property’s address, the owner of the property, the renter (also known as the tenant), the length of the rental period, and the monthly rent payment for that duration.
On stamp paper, the rental agreement or contract is written.
Commonly Used Rental Agreement Types
In India, there are two kinds of rental agreements:
Rent Agreement: A rent agreement, often known as a tenancy, is a fundamental lease that allows a landlord and tenant to occupy a piece of property temporarily.
Period: Normally 11 months, renewable at the conclusion of the term (registration is mandatory if the duration exceeds 11 months).
Important points: It includes information on names, the description of the property, the rent amount, late fees, the grace period, the security deposit, parking, facilities, repairs, insurance, and so on.
Simple and straightforward.
If the tenure is for less than eleven months, registration is not required.
Lease Agreement: A longer-term rental agreement, typically spanning more than a year, is a more formal contract. The state’s rent control regulations apply to it.
Time: usually longer than a year.
Important points
gives rise to an interest in the property, giving the renter rights such as the ability to use it for the duration of the lease (even if it is sold).
Can be for long times—up to 99 years!).
both inheritable and transferable.
binds the parties to the term that was agreed upon.
For registration to be legally enforceable, it must be mandatory.
Leave and License Agreement: This agreement is permission to occupy a property, not a tenancy agreement.
Duration: Flexible.
Key points:
It differs from lease agreements as it doesn’t create an interest in the property.
Revocable by the owner at any time.
Not transferable.
Grants “permission” to occupy, not rights.
No landlord-tenant relationship; easier evictions.
Contents of a rental agreement
The contents of a rental agreement vary from place to place. However, the usual contents of a rental agreement include:
Names of the landlord, tenant, and/or their agents.
Description (address) of the property.
Amount of rent and due dates for payment, grace period, and late charges.
The person responsible for the payment of any other amount such as property tax, TDS (if applicable), property repair changes, society/flat maintenance changes, water bill, electricity bill, etc.
Method of payment for rent.
Procedures for ending the contract before its expiration date and any associated fees.
The security deposit’s amount and the account that holds it.
utilities provided by the landlord, as well as the methodology used to calculate any fees the landlord may impose.
Tenants are allowed to use all on-site amenities, including the security system and swimming pool.
laws and guidelines, including those pertaining to pets, noise, and the consequences of breaking them.
Indicate the availability of parking, including any designated spots, if any.
How tenant repair requests are handled and procedures for emergency requests.
Terms commonly included in a rent agreement
Duration: period for which the rental agreement will be in effect.
Rent: The consideration amount or payment made by the tenant to the landlord in exchange for the property rented out.
Deposits: the amount of deposit required (if any), the purpose of each deposit, and conditions for return or adjustment of deposit at the end of the rent period.
Terms of use: the purpose for which the property is to be used and terms and conditions regarding the usage of the property.
Utilities: Which utilities are included in the rent, and which utilities is the tenant responsible for?
Insurance: Whether the tenant is required to insure the property—this is most often used in commercial rental agreements.
Repairs and maintenance: The party responsible for repairs and maintenance of the property is the landlord or tenant.
Termination: the period when the rental agreement ends. It may end due to notice by one party to the other ending the rental period or due to the end of the duration of the contract. When the agreement ends or terminates, the rent period also ends, and the final settlement of dues between the parties regarding the property, such as the return of the advance amount, payment for damages, etc., will be made.
Security deposits
In India, a security deposit or advance is also paid by the tenant to the landlord, which is to be repaid at the time of cancellation of the rental contract. Usually, it is calculated anywhere from 2 or 3 months to up to 10 months of the rent.
Security deposits are given at the time of signing the contract. A part of the security deposit can be used by the landlord towards any damages caused to the furniture, appliances, electrical, or property itself by the tenant.
After deducting the security deposit towards damages and painting of the property, the landlord must return the remainder of the deposit to the tenant at the time of cancellation or termination of the contract.
Procedures for Making a Rental Agreement
Below is the process for making a rental agreement:
Step 1: Draft the rental agreement and review the agreement by both parties, i.e., the owner and tenant.
Step 2: Finalize the draft rental agreement and print it on stamp paper obtained from a sub-registrar’s office.
Step 3: Ensure the owner, tenant, and two witnesses sign the rental agreement.
Step 4: Get the agreement registered at the Sub-Registrar’s office if the duration of the rental period is more than 11 months.
Step 5: Make a photocopy of the signed (in case of 11 months rent) or registered (in case of more than 11 months rent) rental agreement and give a Xerox copy of the agreement to the tenant.
How can I sign a legally binding rental agreement?
A rent agreement must be registered if it is for a period of time longer than 12 months, as per the Registration Act of 1908. On the other hand, the rental agreement need not be registered if it is for a period of 11 months or less. Drafting and signing the agreement on stamp paper will be legally acceptable in such a situation.
If the rental agreement is for a period of 11 months or less, it must be printed on stamp paper that may be purchased at the sub-registrar office in the location of the property. The owner and renter must sign at the bottom of each page of the stamp paper once the rental agreement has been printed on it. For the agreement to be enforceable, the names and addresses of two witnesses must also be signed.
The rental agreement must be printed on stamp paper and filed with the Sub-Registrar’s office of the area where the rented property is located if the agreement’s duration is 12 months or more. To sign the agreement, both the renter and the landlord must be present in the sub-registrar’s office.
They must sign at the bottom of each page of the stamp paper on which the agreement is printed in the presence of the registrar. Two witnesses must also sign the stamp paper, and it should be registered after paying the required fees.
Documents Required for Registration of the Rental Agreement
The general documents that must be submitted by the landlord, tenant, and witnesses for registration of the rental agreement are as follows:
The proof or evidence of ownership of the rented property (title deeds of the property having the name of the landlord)
Property documents such as a tax receipt for the property to be rented out
Passport-sized photographs of each of the parties and the witnesses
Address proof of both parties and witnesses (passport, Aadhaar card, ration card, bank passbook, or driving license)
Route map of the property to be rented out, if required
Any other document specified by the subregistrar’s office.
E-Stamping of Rental Agreements
In some states, the e-stamping facility for rental agreements is available. Where the e-stamping facility is available, the parties need not buy the stamp paper from the sub-registrar office to print the rental agreement. Instead, they can log on to the Stock Holding Corporation of India Ltd. (SHCIL) website and check if the state where they reside offers this facility.
Presently, Assam, Himachal Pradesh, Gujarat, Karnataka, Delhi-NCR, Maharashtra, Uttarakhand, Tamil Nadu, and Uttar Pradesh allow e-stamping of rental agreements. However, e-stamp paper cannot be directly purchased from the SHCIL website.
If the state where the parties reside offers e-stamp paper, they need to purchase the e-stamp paper from the allotted centers in their respective cities. After purchasing the e-stamp paper, the rental agreement must be printed on it. When the duration of the agreement is 11 months or less, the signatures of the parties and the witnesses on the e-stamp paper on which the rental agreement is printed will make the rent contract valid and binding on the parties.
When the duration of the rental agreement is 12 months or more, the parties must print the rental agreement on e-stamp paper, go to the sub-registrar’s office, get their signatures, and get it registered for the agreement to be valid and binding on them.
Below is an example of a rental agreement executed on e-stamp paper:
Frequently Asked Questions
What is the stamp duty to be paid on the stamp paper?
The rental agreement should be printed on a stamp paper of a suitable stamp value according to the Stamp Act of the respective state to make it legally valid. Thus, the stamp duty varies from state to state.
Should the rental agreement be notarized?
No. In India, it is not mandatory to note the rental agreement. Registration of the rental agreement is sufficient for it to be valid and binding on the parties.
Who keeps the original rental agreement?
The landlord of the property keeps the original copy of the rental agreement. However, the tenant will have the xerox of the rental agreement copy, as it helps the tenant go through the agreement terms in case of disputes.
Is there any e-lease that can be executed between a distant landlord and tenant?
Usually, the lease agreements are for a period of more than 11 months. Lease agreements are made for a duration ranging from 3 to 10 years. Any lease agreement executed for more than 11 months has to be registered to be valid. For registration of the lease agreement, the landlord and the tenant have to be present in the sub-registrar’s office.
However, if the lease agreement period is for 11 months and e-stamp paper is available in the city where the property to be leased is located, then the lease agreement can be printed on the e-stamp paper, which can be sent to the distant landlord or tenant for his or her signature. The signatures of both parties will make the lease agreement valid for a period of 11 months.
Can I take a hotel room on the rental agreement?
In India, hotels like the Taj Group, Mariott, and Grand Hyatt offer rooms on rent for long stays ranging from a week to a year or more. It can be taken on rent or lease. Even Oyo offers rooms on a rental basis. You can rent a hotel room by executing a rental agreement between you and the hotel management. The rental price, duration, hotel services that they provide for your room, and amenities have to be discussed beforehand and clearly stated in the rental agreement.
Why is a rental agreement usually executed only for 11 months?
The rental agreement need not be registered when it is for a period of 11 months. Just putting the signatures of the landlord, tenant, and witnesses on the rented agreement printed on the stamp paper is sufficient to make it valid and binding on the parties. To avoid the formalities of registration, rental agreements are made for 11 months and extended after the expiration of 11 months for another term of 11 months.
Is it possible for the rental agreement to be terminated early with three months’ notice?
Yes, a rental arrangement can be terminated with one to three months’ notice. Any party may end the rental agreement, and after the notice period has passed, the renter may leave on their own volition or may be asked to leave. It is imperative to provide notice of termination in order to vacate the premises prior to the rental agreement’s expiration. When leaving the premises on the day the agreement expires, there is no need to give a notice of termination.
Can a rental agreement be made orally?
An oral leasing agreement is legitimate, yes. However, the rental agreement is generally in written form and drafted on stamp paper. It is essential that a rental agreement be written, as it helps to prevent conflict between the landlord and the tenant. It ensures the safety of the property for the landlord as well as protects the tenants from dealing with any illegitimate demands by the landlord.
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