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5 clauses you must have in your rent agreement written by Ashwini Kumar Sharma, published in Live Mint. September 9, 2018

Many people leave their home towns and move to different cities to study, for work, for business or for better lifestyle. The first thing they need in the new city is a place to stay. Given that it&rsquos not easy to buy a home to live in as soon as you move to a new city, especially in metros, most people tend to take a flat on rent. But before you take a property on rent, it is prudent to know the terms and conditions and execute a rent agreement.

 

A rent agreement ensures you have legal recourse later in case there is a problem between you and your landlord, which is why it&rsquos important to be careful about the clauses included in the agreement. Here are a few must-have clauses for the rent agreement.

 

Amount of rent, security deposit, other payments

 

The agreement should clearly mention the amount of rent that you have to pay each month and the due date by which it has to be paid.

 

In most cases, landlords ask for a security deposit which is usually equal to one or two months&rsquo rent amount. Mention the security amount in the agreement and when it will get refunded.

 

Also, ensure that the agreement clearly states what else you&rsquoll have to pay for like electricity, water, PNG, maintenance, and so on. Also, it should be clearly mentioned if there is a separate meter for utility connections based on which you have to pay bills or you got to pay a fixed amount every month.

 

Duration of agreement and renewal criteria

 

Typically, rent agreements are executed for a tenure of 11 months. However, you can enter into an agreement for a longer period as well. Make sure the tenure is clearly mentioned.

 

Also, clarify about the lock-in period, during which neither the tenant nor the landlord can terminate the agreement, and ensure it&rsquos mentioned in the agreement as well. &ldquoThe agreement should clearly mention the consequences of terminating it by either party before the end of the lock-in period,&rdquo said Rajat Malhotra, partner, Laware Associates, a Delhi-based law firm. Typically, when the tenant has to vacate the house before the end of the lock-in period, the security deposit gets forfeited by the landlord. Similarly, if the landlord wants the house vacated before the end of the lock-in period, she has to compensate the tenant by paying an amount equal to the security deposit, in addition to the actual security deposit refund.

 

Note that the lock-in period is not the same as the notice period, which typically lasts one or two months. If the notice period is two months, you will have to give a two-month notice to your landlord in case you plan to vacate the house. However, the notice period is typically not valid during the lock-in period for either party.

 

When and how the agreement can be renewed, by how much will the rent go up at the time of renewal, whether or not there are provisions for re-negotiation of rent and so on should be mentioned. Also, in cities like Mumbai, in the initial agreement, real estate agents put in clauses related to payment of brokerage at the time of renewal. Discuss this clause, and get to know in advance what the amount of brokerage for renewal will be and who will pay it.

 

List of fittings, fixtures

 

The agreement should also have the deion of the house you are taking on rent such as the floor or apartment number, area of the house, number of rooms, bathrooms, living area, kitchen and so on. If it is a furnished house, make sure there is a list of all the fixtures and fittings like beds, sofas, tables, chairs, wardrobes, number of fans, air conditioners, lights and so on.

 

Registration of agreement

 

&ldquoIdeally, one should register the rent agreement,&rdquo said Malhotra. In case of disputes, unregistered rent agreements are not considered as primary evidence by the court and you may have to provide other supporting documents to prove your stand, he added.

 

To register a rent agreement you would have to pay charges such as stamp duty and registration fee. The charges are typically shared by the tenants and the landlords but mention that in the agreement. Also, there should be clarity on who will pay charges like legal fee, if any, or brokerage to agents.

 

Restrictions

 

Many landlords do not allow tenants to keep pets. If you have a pet, discuss the issue before finalising a house on rent. A few also have issues with non-vegetarian tenants. Other issues to clarify include whether you can use the terrace, parking space, garden or any other amenities in the society.

 

Landlords typically keeps the original copy of the rent agreement, but you should always keep a copy of the same.