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What is Rent Agreement?

To formalize the home renting process, a tenant and a landlord must put the terms and conditions of the verbal agreement in writing and get the document registered to provide it legal validity. This document is known as the rent agreement or the rental agreement. Note that verbal agreements between the landlord and the tenant have no legal backing. And, in case of any future disputes between the two parties, neither the tenant nor the landlord will be able to approach any legal authority to claim relief, if the rent agreement is not executed and duly registered. Under the recently passed Model Tenancy Act 2019, states could set up rent authorities in cities, where landlords and tenants would have to go to the rent agreement registered. A rent agreement typical takes about the specifics of the tenancy which includes names of the tenant and the landlord, their addresses, the duration of tenancy, the monthly rent, the responsibilities pertaining to property maintenance, penalties on default, etc. 

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Why is a Rent Agreement necessary?

It is important to have a rent agreement in place to take care of any disputes that may arise between landlord and tenant, due to varied reasons like:

• Tenant subletting the Property

• Landlord increasing rent without prior notice

• Tenant setting up business in the house premises

• Landlord denying returning the security deposit

• Tenant damaging the property

Apart from some of the pointers mentioned above, there are many such disagreements that might arise during tenants stay in the property. To take care of all such disputes well in advance, a proper govt-approved rental agreement needs to be in place. Rent agreement is a documented proof for the terms and conditions that have been agreed between the landlord and tenant while renting a property.

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What are the various details that are mentioned in a Rent Agreement?

The various details that are listed in a rent agreement are:

• Details of both the parties

• Terms of payment

• Notice period clause

• Lock in period duration

• Date of execution of agreement

• Purpose of lease: Whether for residential or business purpose

• Yearly increment terms

• Annexure: Which includes all the list of items in the house like light, bulb, bed, table, etc.