An agreement is made between house owner and tenant when a home is given for lease for a fixed time. It is done in two ways called lease agreement or rental agreement and is executed for a time period. If it is a lease agreement, whole amount will be transferred at the time of execution of the agreement, and it may be written for some duration of time. When house owner returns the amount (without interest) tenant should hand over the house or flat to the owner. Till then he can stay there without paying monthly rent. An agreement is prepared with great care, and both the owner and tenant should know these points before signing the agreement.
How to write a lease or rental agreement for your rental home
1. For a rental home, an agreement can be done in two ways – as a licensed agreement or a rent agreement.
2. Most people prefer to write a license agreement and need 200 rupees (as per Indian laws) stamp paper to write the agreement for a duration of 11 months. 5% of the annual rental amount is to be given as stamp duty.
3. If the tenant wants to stay in the house after 11 months, he can renew the agreement. i.e. the agreement is to be rewritten. It’s up to the owner’s decision to renew or not.
4. Mainly, three things are to be included in the document: monthly rent, security deposit, and maintenance charge.
5. The security deposit is to be transferred to the house owner as soon as the rent agreement is executed. Tenant gets this amount back (without any interest) only when he leaves the house.
6. If the tenant brings any damage to the house or its properties, the house owner can levy the amount from the security deposit. This matter can also be included in the agreement.
7. Tenant may leave the house for personal reasons or a job transfer before the completion of the agreement period. To avoid the loss, the house owner can demand the tenant to give an early notice. The notice period can be fixed by the house owner and can be noted in the rent agreement.
8. For a healthy relationship between owner and tenant, it’s always wise to write everything in the rental agreement. A house owner can put restrictions on pets, cooking of non-vegetarian dishes, etc. But everything is to be written in the documents.
9. The signature of an eyewitness is also needed in the rent agreement.
10. It’s always a better decision to prepare the agreement, seeking the advice of a law expert. Both persons can approach the court if anything is done against the agreement.
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