You’ve picked your favorite property to rent, checked out the place and are about to move in? Well not so fast! You need to first prepare a Rent Agreement, also know as Leave & License Agreement and get it registered with the govt.
Leave and License agreement is an agreement by which the owner of an immovable property/a person duly authorized by the owner or a competent person enters into a contract with another person for possession, enjoyment and use of the said property for a specified period and purpose against valid consideration is called “Rent or Lease Agreement.“
The Parts of Rent/Lease Agreement
1) Consideration to be paid
Rent payable including premium (if any) is mentioned here.
2) Operative part
It should show clearly the Lessor (owner) divesting himself of possession and lessee coming into possession.
The nature of the lease, date of commencement and duration of renting are specified here. (Very important part, enforceable with help of police if party over stays.)
The mode of payment of consideration including time, place and installments of payment are mentioned in this part.
Terms and conditions governing the lease such as purpose, payment of taxes, repairs, insurance, subletting etc are mentioned in this part.
It must contain the following clauses or information
1) Proper identification of the parties to the agreement
2) Clear title of the Lessor – The lessor must be the legal owner of the property or a person duly authorized by him or a person authorized by court to enter into such contract.
3) Proper identification, area and demarcation of the property to be rented/leased.
4) Tenure of the lease
5) Purpose of the lease – Whether the property will be used for residential, commercial or charitable purpose. Use of the property for any purpose other than as mentioned in the agreement, makes the agreement void and liable to be cancelled and compensation needs to be paid.
6) Consideration – Quantum of rent payable and mode of payment must be mentioned.
7) Escalation clause – If the lease period is more than 1 year, normally it is increase in rent, mentioned as a percentage of the rent paid in the current year.
8) Security deposit or Advance Rent – The agreement must specify any security deposit or advance rent payable by the lessee, time and mode of refund of the deposit or adjustment of the advance rent. Normally deposits are interest free. In case it is agreed otherwise, the rate of interest and mode of payment thereof should be mentioned in the agreement.
9) Other charges – Any other charge(s) such as for maintenance, security, electricity, water, gas etc or for any other facility, payable by the tenant/lessee, must be specifically mentioned in the agreement to spare both the parties any heartburn later on.
10) Access to common/ancillary facilities – The agreement must specify the availability or otherwise, of the other facilities such as use of common passage, roof, park, swimming pool, car parking, library, club, gymnasium etc besides the demised and demarcated property, and charges payable (if any) for such facilities.
11) Furnished flats – In case of furnished flats the agreement must contain the complete list of furniture/appliances/gadgets etc with respective specifications. Quantum of compensation for loss or damage to such furniture/appliances must be provided for in the agreement to avoid any miscommunication later.
12) Maintenance of the lease property – Normally this requirement arises when the property is leased for a very long period. In such cases, the onus of repairing/maintenance of the property must be clearly spelt out. The agreement must also contain, in such cases, liability of the defaulting party to compensate the other party, for the losses and damages.
13) Notice period-If either you or the landlord wishes to terminate the contract, a notice period, usually of one month, needs to be served. Some agreements, however, may specify a longer time period. Always send your notice in written communication, with the date mentioned clearly.
This is a short summary of the Leave & License Agreement to educate you about the agreement. To create a Leave & License Agreement aka Rent agreement, call Anulom Right now. We have legal experts that will have the agreement ready quickly and register it at your preferred place. Yep, no hassle service at your doorstep at very reasonable prices (unlike them pesky agents) !