Registering a rent agreement before leasing your property is not just a formality but holds utmost importance. It protects the interests of both owners and tenants. Here’s everything you need to know about rent agreement- format, content and clauses.
If you want to rent out your property, it is important to have a rent agreement with your tenant. At times, landlords skip this formality and may end up having to pay a heavy price for it. Also, if you are looking to stay on rent yourself, make sure you sign a rent agreement so all terms and conditions of your house stay are clear.
Irrespective of whether you are a landlord or a tenant, you need to know all the terms and conditions of a rental agreement. The rent agreement also follows a certain format. Whether you register your rent agreement, get it notarized, or get it signed off, you should follow the legal format.
Also read: Notarized or registered rent agreement – which is better?
Today, we tell you what the contents of a rent agreement should be, explain its basic terms, and also give you the different formats of a rent agreement. So if you are signing up for a shop or commercial complex, this format would be different from a house rent agreement. We also give you the rent agreement format in Hindi for your convenience.
What is a rent agreement?
A rent agreement is a formal document agreed upon and signed between a landlord and a tenant. A usual rent agreement format will include details about the proposed rent, advance paid, terms and conditions given by the landlord, exact size and location of the property, proposed use, and other relevant details.
Also read:Rental Agreement – Rights of Tenants and Landlord
Why have a rent agreement?
A rent agreement format that covers all relevant details is a legal document that both parties must bind by. Here are some of the advantages of drawing one before renting a property.
- It is very common for landlords and tenants or lessees to have disagreements over time. In such cases, a rent agreement serves as a reference to come to a solution.
- The agreement will help the landlord sue for damages, if any, caused by the tenant.
- The agreement will help the landlord evacuate the tenant/lessee for unworthy behaviour or for not following the pre-mentioned regulations.
- The agreement protects one from future litigation.
- It helps the tenant/lessee get back the paid advance at the end of the stay.
- It helps the tenant/lessee handle illegal and unfair claims or excess money demands by the landlord.
Basic content of rent agreement
Now, there is no doubt that the specific contents of a house rent agreement format are unique in every case. However, the basic structure and details may be similar. Check out the below basic contents that you should include in any common rent agreement format.
- Place of agreement Date, month, and year of the agreement
- Lessor/landlord’s full name
- Lessor/landlord address
- Lessee/tenant full name
- Lessee/tenant address
- Leased/rented property address
- Leased/rented property area
- Leased/rental term in months or years
- Lease/rental deed start and end date
- Lease/rent payable per month
- Date of lease/rent payment
- Fine/interest to be paid on non-payment
- Notice period to end lease/rental agreement
- Witness signatures
Also read: Pros and cons of paying rent with a credit card
Documents Required for a Rent Agreement
To register a rent agreement applicable in a court of law, both parties must submit certain documents. Here’s a list of documents essential for registering a rent agreement-
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Original documents of proof of ownership of the property
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Papers of the property, such as tax receipts
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Two passport-size photographs of each party and one photograph of each witness
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Documents verifying the addresses of both parties and witnesses
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Route map of the property that is being rented
Key terms in the rent agreement
If you are a new landlord or a tenant/lessee, then you need to understand specific key terms in the rent agreement to ensure you are well aware of the terms and conditions. Here is a list of key terms that may be present in any rent agreement format for a shop or a house rent agreement.
Occupancy limit – This talks about how many members can occupy the rented or leased house at a time. This can also mention the number of employees that can work in a shop or an industry at any point in time.
Term of tenancy – The term of tenancy is the maximum period the lease or the rental agreement holds before it needs to be renewed or nullified.
Security deposit – Most landlords or lessors ask for a security deposit to cover future damages that may occur during the lease or rental period.
Restrictions – The landlord or the lessor usually levies restrictions and includes specific dos and don’ts that you may have to follow while using the property.
Utilities – They are usually part of the rent/lease and are facilities you can use while the rental agreement is live.
Repairs information – This may include details about what repairs are the responsibilities of the landlord and which ones are of the tenant/lessee. It may also include details about how damage/repair costs are to be shared.
What is the Model Tenancy Act (MTA)?
The Indian government has created the Model Tenancy Act to promote rental housing in the country. This policy aims to benefit both tenants and landlords by providing guidelines for drafting rent agreements.
Once the states adopt the policy, it will replace existing laws on rental housing across India.
It’s important to note that existing rent agreements will remain unaffected by the new law, which is progressive and won’t apply retroactively. Any disputes related to existing rent agreements will continue to be dealt with under the old laws, even after they are repealed.
Why are Rent Agreements For 11 Months Instead of a Full Year?
When renting a property in India, it is common to sign a rental agreement valid for 11 months. This is because if the rental agreement exceeds this period, there is a requirement for registration and payment of stamp duty and other charges. These charges can get quite expensive for the tenant.
View video to learn more
Different formats of rent agreements
The Government of India and the different states all have their own regulations regarding commercial and house rent agreement formats. These formats are accepted by the authorities in case there is a discrepancy and need for intervention in the future.
You will be able to get a rental agreement drafted by an expert very easily. For your convenience, we have also put together a few sample rent agreement format pdf and jpg below that you can check out. Do note that you may have to add the terms and conditions, rent/lease/deposit details, personal details, and other information carefully to these formats before you pass it on to the lessee or tenant.
Format of Rent agreement for House
Below is a basic house rent agreement in English that you can keep as a reference before you draft your own. Please note that it is important you get your draft cross-checked and approved by an expert to ensure there are no errors or discrepancies in it.
Some landowners are more comfortable drafting the rental agreement in their regional language. This is definitely allowed, too. You just have to ensure the other party understands this language, too. Some people make rent agreement format in Marathi while others draft it in Tamil. You can choose to do this in a language of your choice.
Format of Rent agreement in Hindi for house
We have a rent agreement format in Hindi given below. Like other standard formats, this should also include basic information that was listed above in the article.
Format of Rent Agreement for Commercial Property
While the basic agreement format remains the same for all kinds of properties, the commercial rent agreement format may require the addition of few more details. The complexity of the agreement also differs. You can check out a sample copy here.
View video: Checklist for tenants
Format of Rent agreement for Shop
A shop is any place a person runs a business from. Starting from small kirana shops to huge showrooms, different types of shops could be given out on rent and lease. If you are planning to create a rent agreement format for shop, here is a sample for you.
Format of Rent Agreement for Shop in Hindi
Hindi is one of the most commonly used and spoken languages across the country and logically, someone may want to create a rent agreement format for shop in Hindi. Here is a sample you can check out. Make sure to change the details so it reflect your shop details perfectly.
5 things you must consider before renting out your property (Hindi)
Conclusion to Rent Agreement Formats
Whether you are the landlord or the tenant/lessee, it is very important that you draft a rental agreement and carefully add in the terms and conditions to make sure everything important is abided to or is in favour. You can use any of the above rent agreement samples mentioned to get your agreement done.
We strongly suggest you take the help of an expert to finalize this because when it comes to such legal agreements, every word matters and everything is written for a reason. An expert will be able to get the right details drafted so you are safeguarded if there are legal battles in the future. A rental agreement is the basis for a healthy and open relationship between the landlord and the tenant. The more honest, transparent, and detailed this is, the better it is.
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