Rental Agreement

In today’s rapidly changing society, all property-related transactions must be secured by legally-binding documents in appropriate formats to ensure that the interests of all parties concerned are safeguarded. As a landlord or tenant — it’s crucial that a valid rental agreement exists as a reference for all parties.

A rental agreement is a comprehensive set of guidelines and penalties for various scenarios. This serves to protect the interests of both parties – the landlord and the tenant. In case of a dispute, this document is important as evidence.

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What are the Steps to Create a Rental Agreement

Step 1: Draft the Agreement with all relevant clauses

Step 2: Print on a Stamp Paper of the state prescribed value.

Step 3: Sign the document in the presence of witnesses.

What are the steps to create a rental agreement

Why Should I Create a Rental Agreement?

Advantages of renting with an Agreement

  • Have a legally binding and precisely written contract with your landlord/tenant.
  • Document all clauses for use of property — general (rent, due date, security deposit etc.) and specific (whether pets are allowed etc.).
  • Registering with local authorities.

Disadvantages of renting without an Agreement

  • As a Tenant, without a written agreement – a landlord may evict you from the property without giving any notice. They may also increase rent and other charges as per their own discretion.
  • As a Landlord, you cannot make the tenant pay for any damage to the property or the fixtures in the absence of a written agreement. Even in case of delayed payment of rent etc., no penalty will be paid by the tenant without a legal document enforcing it.

What Should a Valid Rental Agreement Contain?

Some vital things that a rental agreement must address

How Do I Make My Rental Agreement Legally enforceable?

Stamp Paper

The rent agreement should be printed on Stamp Paper of the state prescribed value.

Signatures

Landlord and tenant need to sign at the bottom of each page to signify they have understood and agree to all terms and conditions. Both parties also need to sign the final page in the designated place.

Witnesses

Witnesses need to sign with their name and address in the designated place.

Frequently Asked Questions (FAQs) about Rental Agreements

You can but without a legally valid documentation of the terms and conditions. However, legal complications may arise in the case of a dispute.

Yes, you can make the agreement after the tenant has moved in. However, you should try to get it signed at the earliest. It is very risky to continue for the term without an agreement.

Stamp duty is a legal tax payable in full which makes a rental agreement a legally valid document. The agreement must be printed on a stamp paper of suitable stamp value.

The amount of stamp duty to be paid is governed by the Stamp Act of the State in which the property exists.

No. In India, it is not mandatory to notarize a rent agreement.

As per the Registration Act of India, a rental agreement exceeding 11 months in tenure should be mandatorily registered to make it executable. To avoid this, rental agreements are usually made for 11 months and extended as per mutual consent of the parties involved.

Maintenance charges are charged by apartment associations for maintenance of common facilities – clubhouse, swimming pool, salaries for security and housekeeping staff etc. These terms must be explicitly covered by the agreement.

As such, the tenant is responsible for paying these charges as they would be utilizing the facilities. Sometimes, the landlord may pay the maintenance charges for the year lump sum and collect it from the tenant on a monthly basis.

Notice period is between 1-3 months to vacate the premises. These terms needs to be explicitly documented in the rental agreement with the consent of both parties.

No. The landlord or their representative may only visit the premises with the permission of the tenant. However they can visit after giving sufficient, prior notice (typically 24 hours) This clause should be covered by the agreement.

The tenant is not allowed to make modifications to the structure without prior, written approval from the landlord.

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