Tenancy transactions and Lease Transactions are similar with a few dissimilarities. However, both these transactions have a landlord and tenant who contract for the transfer of certain property rights in a rental property for monetary consideration known as rent to be paid on a periodic basis during the tenancy term. Both these transactions have agreements that regulate and record the relationship between the parties to the transaction.
The agreements need to be signed by the parties and witnesses and are legally binding on the parties. These agreements are carefully drafted in clear, unambiguous language and are registered for official recognition from Government authorities and for authenticity purposes.
Containing clauses, terms, and conditions that record the relationship of the parties in writing, the rent agreement and lease agreement are made in duplicate and some triplicate for good measure. They are prepared after incorporating terms that were mutually discussed and accepted by the parties. However, there are standardized forms of these contracts due to the generalized nature of the rental transaction. This article seeks to address certain questions on the rent and lease agreements and underline their importance.
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Can I write my own lease?
A lease agreement can be either verbal or in writing. Agreements on its own is not enforceable unless it is made a contract. Mutual assent is one of the mandatory requirements in a contract to be legally enforceable.
- It is in the best interests of the party to have a lease agreement in writing because it betters the chances of enforceability of agreements.
- A legal document also has greater evidentiary value than a verbal agreement because it is a written record.
- Usually, lease agreements are fairly standardized with generalized terms and conditions.
- You can use these standardized lease agreements with modifications or alterations that suit your needs and then along with the tenant sign the document.
- If you have drafted your lease or used a standardized template that you have altered to suit your needs, there may be a chance of you incorporating a condition that is invalid or illegal.
- To negate the effects of this condition, if any, it is best you include a clause which states that in light of the illegality or invalidity of the defective condition, the rest of the agreement is still in effect or effective.
- After you have drafted your lease agreement, it is best if you seek out a lawyer who can review your document for any patent or latent illegalities or unenforceable conditions.
Who keeps the original rent agreements in India?
In India, a rent agreement is made in duplicate or sometimes even triplicate for good measure. The reason is that, while the original is held by the landlord, the tenant is given an attested copy.
- The reason for this move is simple. A tenancy transaction involves the rental property that is owned by the landlord and some rights that lie therein which are temporarily transferred to the tenant for monthly rent to be paid by the tenant to the landlord.
- Thus, the terms and conditions of a rent agreement are mutually discussed between and agreed upon by the parties. While the original agreement is held onto by the landlord, a copy that is as good as the original is given to the tenant.
- Both the parties have knowledge of the terms and conditions and can accordingly take action during the tenancy period.
- A copy of the original document is admitted as evidence in a Court of Law under the Indian Evidence Act.
Who pays for rent agreements in India?
Usually in India, it is the tenant who bears the expenses related to the rent agreement. However, that may not always be the case. The tenant pays the registration fees and the stamp duty to have the document registered and thus legally acknowledged by the Governmental authorities.
- In a rent agreement, the parties can decide among themselves who has to bear the expenses and how these expenses should be apportioned.
- A decision needs to be made as to who will bear expenses like electricity and water, maintenance expenses, periodic repairs, property taxes, and so on or in how they should be allocated or divided among the parties to the transaction.
- Thus, the landlord and tenant can also decide among themselves as to who will bear the registration expenses.
- It can be such that the parties decide to share the burden of the registration fee, but this has to be explicitly mentioned in the rent agreement in clear, explicit terms.
What are the terms of lease agreements?
Some of the Mandatory terms of a lease agreement includes:
- Name of the tenant and the landlord
- Leasing or Rental Limits
- The terms of the tenancy
- Rent, deposit, and fees
- The Repair and Maintenance Charges
- Restrictions on the tenants, etc.
The Role of jurisdiction shall also be mentioned. In cases of any form of dispute that arises between the landlord and the tenant, the mode of resolving it shall also be mentioned within the agreement. The parties can decide and mention within the agreement if they wish to go for arbitration in case of any dispute as the court could be an expensive and time-consuming process. It is suggested that the role of the jurisdiction may be mentioned to avoid any conflicts in the future.
It is suggested that the parties enter into an agreement for 12 months in order to avoid stamp duty charges and other charges. It is mandated according to the Indian Registration Act that the agreement may be registered if the lease agreement extends for a period of more than 12 months.
A rent agreement is a legal document that contains the terms and conditions that regulate the relationship between the landlord and the tenant to whom the temporary possession of the rental property is transferred for the monthly rent as consideration. This agreement needs to be in writing and registered for ensuring legal effect and to be binding on the parties to the transaction. If you find yourself drafting or preparing a rent agreement, you can take a standardized template and modify it to suit your needs.
However, after having drafted it is best to seek legal guidance to detect and weed out illegal or unenforceable conditions. A rent agreement is made in duplicate and sometimes triplicate, where the original is usually kept with the landlord, and an officially attested copy is given to the tenant. This is for the benefit of both parties to have knowledge of the terms and conditions of the agreement.
When it comes to the terms and conditions of the agreement, they need to be carefully worded and record the decisions made by the parties after mutual discussion. This includes the decisions as to who bears the expenses arising during the tenancy period or how these expenses should be allocated between the parties.