Rent Agreement Format in India – What all Points MUST be Included?

Renting an area is definitely easier on the short term than actually buying it. The median salary of a common man in India isn’t enough to buy him an apartment or even a small room for shop for that matter. However easier it might seem, the procedures behind actually renting an apartment tend to confound even the smartest of the men. If you are the owner of an apartment, the idea of writing according to the rent agreement format might perplex you. And if you’re on the other side, understanding the standard lease agreement would be a topic that scares you.

In this article, I plan on explaining the purpose and requirements of a standard rental agreement. The article also provides the link for a pdf download of some samples. As you reach the end of the document, the knowledge of the basic rental agreement will be on your fingertips. But before moving ahead, it is rudimentary to understand the types and meaning of a rent agreement.

What is a rent agreement?

A simple lease agreement is a document that mentions the duration of the lease along with the name of the lessor (the person owning the space) and the lessee (the person renting the space). It is a rental contract which is drafted by an expert professional on a stamp paper. The rent agreement format includes every condition and term that the landlord discusses with the tenant. Therefore, it is of prime significance that you read and understand the agreement before signing it. There have been many cases wherein the tenant signed on the agreement without reading it, only to later find out about the unacceptable conditions mentioned in the agreement. Don’t let that happen with you.

There are two basic types of a rent agreement – Lease Agreement and Lease and Licence Agreement. The latter is commonly used by landlords in India as it has the minimum duration of 11 months. A lease agreement comes with a minimum demarcation of 12 months and it follows the State Government’s laws of Rent Control. After the completion of the agreement period, the landlord can extend the duration of the agreement according to his will. This rental agreement is notarised, but this doesn’t make it legally binding. If the landlord wants a legally binding agreement, he has to pay the additional stamp duty and registry charges for the agreement.

What does a rent agreement format include?

Before learning about the contents in a rent agreement format, we must learn certain commonly used jargons.

Lessor: The owner of the property.
Tenant/Lessee: A tenant (or tenants) are the people living on the property of the lessor.
Term of tenancy: The duration for which the lessee(s) will stay on the leased property.
Limits on occupancy: This section speaks about the restrictions that the lessor wishes on to impose on the tenant(s) living in his property. During his ground visit, if he finds anyone staying in the property apart from the mentioned lessee(s) in the agreement, he is liable to take actions based on the details mentioned in the agreement.
Security Deposit: the Security deposit is an amount paid by the lessee to the lessor during the beginning of the rental agreement date. This amount is refundable subject to the terms and conditions as mentioned in the rental agreement.
Entry to the Lease Property: The privacy of the tenants is another important issue and to protect this, the lessor’s legal rights of entry are mentioned here.
Terms of Use: The lessor mentions the rules and regulations that the tenants must have to follow until the time they stay in the leased property. This section also reads the penalty that will be charged if the latter fails to comply with the mentioned regulations.
Utilities: Many landlords provide furnished apartments with extra furniture like the bed, wardrobe, and dinner table. If the lessor provides such extra facilities to the lessee(s), it should be mentioned in the agreement. The lessor can either charge for these utilities or provide them for free.
Insurance: The details about the insurance (if applicable) must be mentioned in this section if the lessee(s) is leasing commercial property.

Points Covered in the Format

A basic rent agreement format mentions the following points.

Name of the lessor and the lessee(s).
Duration of the rent agreement.
Details about the Lease property.
Due date of rent payment, grace period details, late charges, and the actual amount of rent.
Mode of Payment – Cash, Cheque, or bank transfer.
Charges if applicable and the way to terminate the rent agreement before its expiry date.
Details of the security deposit and the account in which the money is kept.
Rules and regulations. In this section the lessor must include the rules drawn by the society (if applicable), about pets, smoking, drinking, use of loudspeakers, and other unacceptable terms. In case of failure to adhere, the rent agreement must read the penalty that the lessee(s) will have to bear.
Details about the extra materials provided by the lessor (like wardrobe, bed, or fans) and the details about their charges.
Procedure to be followed in case of emergency repair and maintenance. Also, the responsibility of bearing the charges of the same. The rent agreement format must also include the details about the normal repair and maintenance charges and the party bearing them. If to request any repair the tenant needs to follow a procedure, the agreement must include it.
If the property has a society or complex, the rent agreement must mention the terms on which the lessee(s) can use the utilities in the premises. These utilities include swimming pool, ground, garden area, and clubs.
Details about the parking area and how the lessee(s) must use it.