Residential Rental Agreement

Overview of Residential Rental Agreement

A Residential rental agreement is signed between the owner of a property and the tenant (an official contract) who desires to take short-term (for a said period) possession of the property. A Residential rental agreement contains necessary details of the residential property, which is also called a rent deed and lease deed. The features included are- renter (or tenant), owner of the property, the term of the rental, and amount of the rent for the said term.

When to Use a Residential Rental Agreement?

• When the owner (property manager) who wishes to rent or lease the property residential tenants;
• When the tenant will dwell in or maintain the property for a fixed term or periodic terms, such as Yearly, Monthly, Weekly, or tenancy.
• When you want an agreement option for co-signers, security deposits, standard fees, and severe accountabilities that protect your property from unconcerned tenants.

What do You Mean by Security Deposits?

The tenant also pays the Security deposit/advance to the landlord in India, who is to be repaid (refundable) at the time of cancellation of the contract. Commonly, Security deposit/advance, which is repaid (refundable), is calculated from 2/3 months to up to 10 months of the rent payable. The Security deposits must provide to the landlord at the time of the ratification of the contract.

Moreover, in the direction of any damages caused to the furniture, appliances, electrical, or the property itself by the tenant; the landlord can use a part of the security deposit. The landlord is to return the remainder of deposit to the tenant after deducting the security deposit towards damages, at the time of termination of the contract.

What are the Terms Commonly Included in a Rent Agreement?

There are few terms commonly included in a Rent agreement which are follows:-

Duration

Duration determines the period for which the Residential rental agreement will be in effect.

Rent

Rent is the consideration (payment) in exchange for the property rented out made to the landlord by the tenant.

Deposits

The amount of deposit required for determination of the conditions for return or adjustment of deposit and purpose of each deposit at the end of the rent dated.

Terms of Use

The term of use signifies the conditions concerning the use of the property and the purpose for which the property is to be used.

Utilities

Utilities included in the rent and responsibilities of tenants.

Insurance

Insurance signifies whether the tenant is obligatory to insure the property or not.

Repairs and Maintenance

It includes the Parties (landlord or tenant) responsible for 'repairs and maintenance' of the property.

What are the Advantages of Residential Rental Agreements?

There are some genuine advantages of Residential Rental agreements, which are as follows:-

Promotes Occupational Relationships

To protect the benefits of both the 'landlord and the tenant, a general Residential rental agreement is very significant to an excellent occupational relationship among the two parties (Landlord & Tenant).

Legal Security

In case any action of the opposing party denies its terms while a deal includes such a huge asset, it will need a Document in place that grants legal security.

Liquidity

In the direction to obtain cash without spending money on the asset, the lessee can use it in a rational manner (engagement of funds for capital needs).

Suitability

If designed for financing fixed ass vets, then it is known that Leasing is easier comparatively. Moreover, there is no mortgage or hypothecation is obligatory. Restrictions encompassed in long-term borrowings from financial organizations are escaped and mostly avoided. Leasing is much lesser than the loans from financial institutions, in which all the formalities are connected.

Immediate Affect

The rented asset is accessible for use straightway with no loss of time in applying for the mortgage/loan/credit, coming up for approval and authorization, etc.

Budget-Friendly

The lessee has a lesser obligation in bankruptcy than under 'debt investment' where Lease rentals are deductible from taxable income.

Safeguarding Unexpected Incidentals

A Residential rental agreement advantages for the tenant and landlord, by securing unpredicted expenses.

Respectable Relations

It develops a strong bond between the landlord and the tenant through the Residential rental agreement because all the pros & cons are streamlined and accurately defined.

What are the Documents Mandatory for a Residential Rental Agreement?

• Aadhar card or the receipt received, Any government-issued ID proof
• Submit the original passport, if not Indian
• Power of Attorney should be presented if ID is demonstrating another person for the registration
• Original copy of proof of ownership (landlord's property)
• Two in recent times taken passport size photographs.
• Get the Residential rental agreement printed on the stamp paper of the recommended value.

What are the Contents of a Residential Rental Agreement in India?

There are some standard contents of a Residential rental agreement which may include the following:-

• Names of all the tenants
• Limits of occupancy
• Terms of the tenancy
• Should specify the amount of rent
• Security deposits and fees
• Repairs and Maintenance
• Entry to rental or lease property
• Restrictions on tenant illegal activities
• Allowance of pets
• Other restrictions by the landlord

In detail:-

• Details including names of the landlord and Tenants and/or their mediators.
• Full description of the rented property.
• Due dates for payment, amount of rent and, late charges, grace period, etc.
• Acceptable mode of rent payment.
• Ways and means to terminate (with charges, if any) the agreement before the termination date.
• Sum amount of ‘security deposit’ and the Bank account.
• Conveniences/utilities furnished by the landlord
• Determined Landlord charges for such utilities
• Accommodations in the rented premises which the Tenant is permitted to use, such as security systems, swimming pool, playground, and kitchen stuff, etc.
• Detailed Rules and regulations such as noise rules, pet rules, and the fine for violation.
• Documentation of vacant parking facilities, including selected parking spaces, if delivered.
• Procedures for emergency requests and how tenant repair requests are handled.

What are the Parameters to Consider While Registering a Residential Rental Agreement?

There are some critical Parameters you should consider while registering a Residential Rental Agreement, which is as follows:-

Police Verification

Let’s just be assured that the Tenant you are renting your property does not have any criminal upbringing before drawing up an agreement or renting it. With this, it will also help to ascertain the fact he shall be able to pay the rents on a timely basis. It an obligation for all the landlords to get the police verification done for the tenants following the Indian Penal Code-Section 188

You need to fill in the online form in the respective state online portals with the relevant Documents, which is really a simple procedure. After that, the police send the final report after processing the application. Moreover, the respective application has to be in a format following the format prescribed.

Discussion

There are a few queries you need to discuss with the Tenant when you rent a property. Those are as follows:-

• What is the amount of rent that needs to get paid?
• What would be the security deposit/advance amount that is needed to be paid by the Tenant?
• When amount is meant to pay the same?
• Is the rent amount rational and fair, and according to the state ‘Rent Control Act’?

He needs to pay the rent on which the date is to pay the rent. Regularly, rent is advised to be collected during the 1st week of the month, and Tenant pays the advance before occupying the property.

Determine Accessible Terms

You have the right to negotiate with the tenants on terms and conditions details regarding the furnishing of the property, repainting, regarding pets, etc. You can also discuss the time period in which you may visit the rented property for examination and customary inspection.

Drafting Residential Rental Agreement

The Residential rental agreement must be drafted very prudently comprising clauses like - the details of the property to be rented, the period of notice for renewal/quashing the Residential rental agreement, the time period of the rent, the amount of advance and security deposit to be paid, what is the rent amount, and when it must be paid.

It should include all the small details, including who must pay the gas, maintenance charges, water bills, electricity, etc. All the rights and duties of the landlord and Tenants have to be provided in the agreement.

Registration of Residential Rental Agreement

All Residential rental agreements beyond the period of 11 months must be registered mandatorily under Section 17 of the Indian Registration Act. However, every Residential rental agreement has to be registered accordingly in individual states. Hence the Residential rental agreements are to be registered by paying appropriate stamp duty and registration fees with the state registry.

CorpBiz Procedure for Residential Rental Agreement

CorpBiz recommends you that you should be in contact with an advisor to understand the requirement in detail. The elementary information would be mandatory from your end to start the process. The lawyers will begin working on your Document once all the information is provided, and the payment is received. Also, you will acquire the first draft of your authorized Document within a few business days. You can evaluate the Document, and intimate for the corrections in case of any modifications.

Why CorpBiz?

CorpBiz is one of the platforms which coordinate to fulfill all your legal requirements and connect you to consistent professionals. Yes, our Clients are pleased with our legal service! Because of our focus on simplifying legal requirements, they have consistently regarded us highly and providing regular updates.

Our clients can also track at all times the progress on our platform. If you have any questions about the Residential Rental Agreement for registration process, our experienced legal advisors are just a phone call away. CorpBiz will ensure that your communication with professionals is charming and seamless.

• Purchase a Plan for Expert Assistance
• Add queries regarding Simple Drafting or Litigation
• Provide Documents to CorpBiz Expert
• First draft ready within 2 days
• Dowload your Registered Residential Rental Agreement/Home Delivery

What are the Instructions to Prevent Real Estate Deceits/Tricks?

There are few instructions to prevent real estate deceits/tricks which are as follows:-

Cash Transferring

Cash transferring or by working in cash only is the most prevalent method of tricking people in a real estate business. The motive behind-why it is so dangerous for scammers because the cash handed in cash basically cannot be tracked to deal with any future agreement. Therefore, they have all the time to escape with your cash after cash is paid for a comfortable new house.

A landowner will consistently demand to pay money at hand, who expects to play the trick. In case you reject, he will fundamentally proceed onward to the following viewpoint. You should never forget, and Keep in mind that never include cash dealings or wire transfers, because such cash as a security deposit and paying the one-month advance trick. It is because they always turn out to be a rental hoax.

Visit the Actual Place

Ensure that you are communicating with the legitimate proprietor of the property or a setup property director before you stick your eyes at that house. You can begin with a simple Google search of the property address or go to the official website.

Sign Only Written Agreement

There is always a probability that you and your lodger might fall prey to some misinterpretation in the future and may have to proceeds for legal action. This is why it is imperative to sign a written agreement to solve real pain and challenging situations.

Comprise Name of the Landowner (Real)

To guarantee that the house is legally leased, the agreement should take account of the renter's actual name (Landlord).