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Terms & Conditions for Leasing out a Property Must be Crystal Clear :
Now it has become the matter of the past when all were living in joint families. Imagine of four brothers with their families living with their parents. A family used to be of about 30 to 40 members with one kitchen in the olden days.
The current trend, however, is of the nuclear families. The condition has worsened with the reason that nuclear families means more houses and more to that every person has one house to live in and other he purchases for investment purposes.
On the other hand, the people from rural areas are migrating to urban areas for job and study. Now the trend is that students also demand flats, rooms and serving class migrated from rural areas is also in need of accommodation.
So the investors are fulfilling their need by providing rental accommodation. It is more important for the owner, who is purchasing the house or a flat on loan and going to give on rent; should know the rent agreement clauses. Many-a-times, people purchase a flat or a house and to pay off the installments, give it on rent. But see to it that this plan does not become a problem for you.
Property may be commercial or residential, take some safety measures before giving it on rent so that in future you do not face a problem. The terms and conditions of both the parties should be included in the rent agreement. In this, the mode of payment, details of the facilities to be provided and the terms of renewal of the agreement should be included.
If you are going to give your property on rent, take some steps. Before giving the property on rent, you must know some important things. The experts say that for this either lease or rent agreement should be made. To be secure from any problem, all the terms and conditions should be clearly mentioned in the agreement. The experts say that the agreement should be done under the guidance of Legal Advisors.
Before giving or taking the property on rent try to gather all information about the owner of the property and why he wants to give it on rent. See to it that if the owner is not giving this property on rent and some Power of Attorney Bearer is giving on rent, then his Validity should be clear. The person (Power of Attorney) should have the legal rights to do it. Sometimes some people give the property on rent through illegal papers. In that condition, you may be forced to get yourself involved in legal implications.
Both the Parties Should Have Mutual Consent on the Agreement:
The terms and conditions of rent agreement should be discussed beforehand. Unwanted situations should not arise at the time of preparation of the agreement. Many-a-times people are seen fighting in the courts regarding the terms and conditions of the agreement. If you are owner of the property, it is for the safer side and is utmost important that both the parties sign on the agreement.
What Should be the Terms & Conditions:
- In the rent agreement the location of the property should be clearly mentioned.
- Moreover the addresses of both the parties should be clearly mentioned.
- This should also be clearly mentioned that who will pay the Service Tax, House Tax and how this payment will be made; because in the situation of non-payment of the tax, penalty will be imposed.
- The most important point is that the information regarding the tenant should be given to the concerned police station and get its receipt.
- If the property has been given on rent for more than one year then account registration is necessary. With this registration, you may come to know that for which purpose the property is being used. If this is for residential purpose then how many members will live, because in the house or a flat, the arrangements for daily needs are made according to that.
What Facilities will be Available:
The details of the facilities must also be given in the rented property. How the common area will be used must be mentioned. Moreover, the issue of who will pay the bills to the Municipal Corporation, Housing Society, Light, Water, Generator, Lift and AC should also be spelled out clearly. Which repairing charges will be borne by the tenant and what the owner has to pay, must be made clear in the rent agreement.
How the Rent will be Paid:
The clause of rent payment system must be crystal clear. How the rent will be paid, advance rent and monthly rent be specified clearly. How the advance rent will be adjusted should be explained in the agreement paper. After how much period the rent will be increased and how much? These terms should also be included. More to that, notice period should be mentioned very clearly. For example how many days before the tenant will inform of vacating the house? How many days before the owner will give the notice for vacating the house? Generally one months’ notice from both the sides is in practice.
Breach of Agreement:
The terms and conditions of Breach of agreement should also be clearly mentioned. Which terms and conditions both parties have to abide by? If any of the party breaks the agreement, what will be the penalty?
Condition for Renewwal:
When the renewal will be made and under which conditions? The information for this may be made available before hand. If the property has to be given on rent for more than one year, then it should be registered properly with the Registrar and necessary stamp duty has also to be paid for this.
It should also be kept it in mind that the witnesses should not be taken for granted in this regard. Any person of the lawyer or any unknown person should not be the witness. If there are two witnesses, make sure that one should be a close friend of yours or a responsible person. For the witness of other party should also be a responsible and good person; be sure of it.
This may be a hard exercise, but if you want to sleep peacefully, you should do this before handing over the property to the tenant. This will save you from all unfair and unwanted circumstances of future.