Rent Agreement

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Is the lessor the actual owner?

Before you sign the agreement, be sure that the person you are transacting with is the actual owner of the property. Often, NRIs or investors hand over their property to caretakers, who may lease it to a third party without the knowledge of the owner.
So, you should verify the title documents, such as the sale deed and share certificate, besides obtaining a no-objection certificate (NOC) from the housing society where you want to lease the property. If the apartment is mortgaged, the original sale deed will be in the custody of the bank. In such a case, an NOC should be obtained from the bank. This will mention the rightful owner's name. THe tenants should be wary of arbitrary eviction if they deal with an unsolicited party. A case of trespassing can be filed against such a tenant if he refuses to vacate within a given time frame. The tenant cannot challenge eviction in this case.

What does the rent agreement contain?

A rent agreement includes the terms and conditions under which the property is given on rent. It specifies the rent value and the tenure for which the agreement is made, as well as the security amount that needs to be deposited with the landlord by the tenant. The agreement should also clearly mention the day before which the rent is expected to be paid. If the tenant fails to pay the rent before the predetermined period, the penal charges that he would be liable to pay should also be defined in the agreement. The rent agreement could also mention the facilities, such as parking space or the usage of society's gym, included with the property. There could also be additional monthly charges, such as the society maintenance charge and club fee. It's best if the additional charges for using such facilities are clearly spelt out, along with the person who is supposed to bear them.
The tenure of a rent agreement is usually 11 months, unless otherwise specified in the contract. If it's for more than a year, it's mandatory for the owner to get the document registered.

The agreement should also specify the notice period and penalty for cancelling the agreement without completing the specified period. Typically, a twomonth notice is served in case of high rental properties, while one month's notice is sufficient for low rental ones.

What should you check?

A tenant should verify whether the owner has included a rent escalation clause in the lease agreement, which could be used to increase the rent after a couple of months. The best way to safeguard yourself is to ensure that the agreement specifies the dates on which the rent escalation will be applicable and the percentage of increase.

You should also make sure that there is a clause on the sale of the house. If the owner decides to sell the house during the term of the rent agreement, you should know how many months you get to search for another accommodation.

It's also important to check that all the appliances and the connections in the house are working properly before you sign the agreement. Usually, minor repair work for installed electrical appliances is the responsibility of the tenant and he has to pay for them. However, if the property is damaged because of negligence on your part, the landlord can rightfully use the security money deposited with him for carrying out the necessary renovation.
You also have the right to see the documents that prove all previous bills related to the house have been paid, especially the electricity, water and gas bills. While you are at it, make sure to peruse the papers that state the property tax has been paid by the landlord.

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