12 Important Clauses Of A Rent Agreement In India

Published on 21 Jun 2018 by Shivi

Landlord-tenant relationship is as sacramental as a marriage made in heaven! Finding the perfect landlord or tenant is more tedious than finding the perfect groom or bride. However, even if you find the perfect landlord or tenant for you, it is always advised to give the relationship a legal backing and put down all the terms and conditions in a legal document. This legal document laying down the legal relationship between a landlord and tenant is the Rent Agreement.

What is a Rent Agreement?

A rent agreement or rental agreement is a written contract between the landlord and the tenant, laying down the rights and duties of the landlord and tenant, terms of possession, time period and other specifications of a landlord-tenant relationship.

Every legal document, including a rental agreement in India, must be carefully drafted and include provisions relating to the use of property according to the understanding between landlord and tenant. It is suggested to get the rent agreement drafted by a good documentation lawyer who can make sure that the document includes all the relevant provisions.

Important Clauses of a Rent Agreement

There are different provisions that must be included in every rent agreement in India. Here’s a brief look at all the provisions your documentation advocate must include in your rent agreement:

  1. Details of Tenant and Landlord: It is vital that the information of the landlord and tenant are included in the agreement. These details ensure that there is no issue in identifying the parties in case of serving of notice or any legal proceeding.

  2. Duration of Tenancy: The duration of the tenancy must be specific, particular and pre-determined. This secures rights of the owner as to the restoration of possession and enjoyment. It also secures the right of the tenant as to the time of eviction and to search a new place to reside or to request for renewal of rent agreement.

  3. Rent and Premium: The premium and rent amount need to be pre-determined to secure rights of the tenant.

  4. Maintenance Charges: Any property when used, requires maintenance and repairs. Since the property is owned by one person and possessed by another, the question as to who shall pay for such additional charges leads to clashes. It is better to pre-determine the allocation of such costs. 

  5. Payment of Bills and other Charges: Often, landlords put their property on rent without disclosing the existence of unpaid electricity bills or any such due charges on the property. This creates an additional burden on the tenant and in the absence of any agreement in this regard, it becomes difficult to prove the liability of the landlord. Thus, it should be pre-determined as to who is liable to pay those dues.

  6. Notice period: Though law stipulates notice period that ought to be served in different cases, it is advisable to specify the same in the agreement to protect the interests of the tenant.

    READ: How To Send A Reply To A Legal Notice In India

  7. Conditions terminating tenancy: In accordance with the provisions of Section 111 of the Transfer of Property Act, a rent arrangement can be terminated on various grounds, laid down between the tenant and landlord. The landlord is authorized to include conditions of termination in the agreement, on happening of these, the tenant can be evicted. .

  8. List of fixtures: Fixtures are attachments which have attained the nature of immovable property owing to their mode of attachment. The landlord may even restrict the tenant from using such fixtures and if the condition is violated it may entail legal consequences. An example of a fixture could be a dog house in the garden area.

  9. Limits on occupancy/sub-letting: Though the tenant in possession has a statutory right under the Transfer of Property Act to sub-let the property, it can be restricted or prohibited. Sub-letting the property is passing on of the rights of possession and enjoyment from the lessee/tenant to another person. This inherent right can be restricted or prohibited by any express clause in the agreement.

  10. Alteration of premises: A tenant generally has no right to alter the premises or boundaries of the rented property. He may be bestowed with certain rights in regards to the same at the will of the landlord.

  11. Illegal Activities prohibited: Illegal activities prohibited to be carried on in the rented property. If the condition is violated it may entail legal consequences.

  12. Signatures and registration: Lastly, the document needs to be attested, signed and registered. It is pertinent to note that the law mandates registration of rent agreement, the duration of which is more than 1 year or which is renewed yearly or for which the premium of 1 year is paid. If the rent agreement is not for a duration of 1 year or more, it is not mandatory to get it registered. It is advisable to get the agreement registered to be entitled to a legal remedy in case of any dispute. Registration creates a legally enforceable right.

When it comes to the registration of rent agreement, the stamp duty to be paid for rent agreement registration varies from State to State. Stamp duty on rent agreement in Delhi is payable at 2% of the average annual rent of the agreement is for a term for up to 5 years. If the agreement is for more than 5 years and up to 10 years, the stamp duty on rent agreement is 3%

The rent agreement between landlord and tenant summarises the caution and care required to be taken by both. The list is not exhaustive and may include additional clauses and grounds as mutually agreed by the parties. Since a rent agreement or tenancy benefits both the parties, it is imperative to secure the rights over property and a customised rent agreement is a perfect way to do so.

Nowadays, it has become very easy to get a rent agreement online in Delhi, Gurgaon, Noida, Bangalore and more than 300+ cities in India. Legistify offers you an online platform to get all your legal documents drafted and vetted from anywhere in India. 

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