Why is RENTAL AGREEMENT required? Things to check for in Rental Agreement.

A Rental Agreement is a legal document covering the rules that tenant and landlords are required to follow in the course of their rental relationship. It sets out the period for which Rental Agreement is going to be applicable along with the rent payable each month.

Basic difference between a Rent Agreement and a lease Agreement: A Rental Agreement is one which provides the tenancy for a short term and the terms of the tenancy can be modified either in between or at the renewal of Rental Agreement period. On the other hand lease provides a tenancy for a set term which can stretch from 6 months to 99 years, being the longest. Long leases serve as a handicap for the lessor because they cannot alter the terms of the lease after the lessee enters into the lease Agreement.

Mentioning the duration of Rent Agreement: It is important to prevent future disputes between the parties pertaining to the absence of this term in the Rental Agreement. It is important to mention if it is a Rental Agreement or a fixed term lease because Rental Agreement usually runs on month to month basis unless terminated by landlord or tenant whereas the lease is entered for a year. It ultimately comes down to the choice of landlord as to how long he wants the tenant to stay.

Date, amount of rent and payment mode: The Rental Agreement should clearly set out the amount of rent along with date when it becomes payable. The penalty to be imposed on late payment of rent or grace period, if any, should be written in clear and unambiguous manner in order to avoid doubt in the mind of a tenant. The acceptable payment methods should be mentioned and the remedy if a rent cheque bounces when it is presented at a bank.

Complete understanding over security deposits: There should be an understanding regarding the security deposits such as limit, use and return of deposits by the landlords in order to prevent legal hassle on the future date. It should be explicitly mentioned in the Rental Agreement when and how the security deposits are going to be used for e.g. no adjustment of last month’s rent from security deposits, usage of deposits for damage repair, remedy available to the tenant in case the landlord confiscates the security deposits without any valid reason. At this point, the tenant should have an option to approach the court and undertake legal measures in order to take back the security deposit.

Responsibility of repairs and maintenance: It is a usual scenario that the landlords shoulder the burden of carrying out major repair work in the premises. However if there is an understanding about any addition, alteration or renovation in the premises, it needs to be mentioned in the Rental Agreement so that the construction or repair work is carried out effectively by either party on a future date. There could also be a restriction clause in the Agreement saying that the tenant cannot install for e.g. a burglar alarm system or paint the walls for that matter.

Occupying the premises: When a Rental Agreement is signed between a tenant and landlord, the landlord ensures the number of tenants who are going to occupy the premises. If there is a failure to pay rent by any tenant then the other occupying tenants can also be held responsible by the landlord. Each tenant becomes legally responsible for all the terms mentioned in the Rental Agreement. It is also applicable that the landlord has the right to evict a non-tenant to whom theproperty is sublet by the tenant without prior intimation to the landlord.

Right to enter the premises: Landlord’s right to enter the rented premises is justified only when it is absolutely necessary or major repair work is to be carried out as it will help in maintaining the privacy of the tenants and will avoid unnecessary inconvenience. Both tenant and landlord should ensure this and make room for this very important clause in the Rental Agreement.

Dates very important: It is foremost to ensure when the Rental Agreement starts and ends.There could also be understanding to extend the Rental Agreement further once it expires. Tenant must do the necessary negotiation regarding the increase in rent, if any, after the existing Rental Agreement comes to an end and it must all be put in writing at the start of rental period.

Conclusion: Making a Rental Agreement is important because it keeps one informed of all their rights both as a tenant and a landlord. At the same time, non-compliance of any of the terms of the Rental Agreement can lead to legal consequences.

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