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Mistakes to Avoid in Your Rental Agreement
Published : January 31, 2025, 12:00 AM
Updated : January 31, 2025, 12:00 AM
Author :
Vivek
Table of Contents
Renting out your home? A rental agreement is crucial for safeguarding both your rights as a landlord and your tenant's rights as well. However, to ensure its legal validity and protect your interests, it's vital to steer clear of certain mistakes. Discover the common pitfalls to avoid in a rental agreement. By sidestepping these errors, you can confidently establish a strong and fair contractual foundation. Read on to learn more about the mistakes to avoid in rental agreements.
Common mistakes to avoid in a rental agreement
Accurate Identification
Always cross-check and double-check the name that the tenant gives you, check it against a legal document like a driver's Licence, PAN or Passport. Make sure that you don’t fill in their pet's name, shortened name or misspell their name in the Rental Agreement. Failure to match the name with identification cards could jeopardize your ability to prove their identity in case of disputes.
Essential Guidelines and Eviction Terms
You need to mention very clearly what is allowed in your home and what could lead to evection. For e.g., not complying with the rules of the building society, not paying rent for more than 2 months consecutively, conducting illegal activities in the apartment etc. Along with the terms for evection, you also need to mention the notice period you will give them to leave.
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Understanding Lock-In and Notice Periods
Lock in clause is basically a minimum specified period that the tenant should stay in your rented house, he/she can’t leave or terminate the agreement before the lock-in period is over. This could be anywhere from 1 to 6 months. There should also be a notice period that the tenant gives you before they decide to terminate the Rental Agreement and vacate your home. This is done so that you can use this time to find a replacement tenant so that you don’t lose out on rental income.
Read: Your Complete Guide to Rental Agreement in India
Precise Payment Terms
You need to mention the rent amount when it has to be paid, what the rent covers, who pays maintenance, the grace period allowed, and how the rent should be paid i.e. cash, cheque, online methods etc. When you’re talking about payments, also mention if there is a penalty for late or delayed rent.
Repair Responsibilities
It’s important that you mention who is in charge of repairs when the tenants are staying in your home. You need to classify what you consider minor repairs and major repairs and who will pay for them.
Controlling Tenant Subletting
Another important clause to add is that of subletting if you don’t add this in, you’re leaving yourself open to tenants subletting your property and making a profit on your property. This could also mean damages, etc. that you will have no control over.
Apart from these common mistakes, there are also mistakes that you that can be easily avoided such as
Power of Attorney (POA) Details
When the owner is not around, they have a person who can legally represent them. This person has been granted POA or Power of Attorney by the owner. When you are making a Rental Agreement and the owner is not around, you still need to add his details as well as that of the POA. If this key bit of information is missing your rental agreement would be considered invalid.
This is a common mistake that people make if you don’t have these details you might end up redoing the whole rental agreement and wasting a lot of time and money.
Read: Important Things You Should Know About Power of Attorney
Tailoring Miscellaneous Clauses
A miscellaneous clause is something that is unique to your case or something that you wish to have as an owner/tenant. This can be different from person to person and case to case, an example could be - If a Licensee vacates the house within 3 months, then the notice period will be for 2 months. After the completion of 3 months of stay, the notice period will be reduced to 1 month.
These clauses can help you an owner to protect yourself as an owner from problems that might arise with tenants. You might need a minimum of 2 months to find a tenant, then you must add this as the minimum notice period. You might require the tenant to paint the house, pay maintenance directly etc. These are the clauses that can be added to this clause.
Rule Out Rent Conflicts
Ensure transparency and avoid misunderstandings by explicitly stating the rent amount in the Rental Agreement, even if both parties are aware of it. Additionally, specify the frequency, percentage, and reasons for any future rental increments. By including these details, you prevent tenant disputes regarding unexpected or unfair rent increases. Once mentioned and agreed upon in the signed agreement, the tenant cannot deny or dispute the agreed-upon increments.
Providing Permanent Address details
The permanent address of the landlord and tenant must be mentioned in the Rental Agreement. It doesn’t matter if either party is from different states/countries, this is a must to be mentioned.
This is important as part of the background verification of the tenant. A permanent address is also needed if you need to contact either party in the case of an emergency.
Crafting a well-rounded rental agreement requires attention to detail and avoiding common pitfalls. By navigating all the aspects effectively, you can create a comprehensive rental agreement that safeguards both parties' interests. However, if the process still seems confusing, don't stress. Let the legal professionals at NoBroker guide you through the process and ensure a smooth rental agreement experience.
FAQs
Ans. A lock-in period in the rent agreement of 24-months is legal and reasonable. The locking period in the rent agreement binds the parties, and no one can be allowed to leave it until the initial rental agreement lock-in period clause expires.
Ans. A rent agreement is a legal arrangement between the property's landlord and the renter who wishes to live there. Surprisingly, it is one of the legal documents we overlook, despite the fact that we should. The agreement is a vital legal document/contract that contains all of the pertinent information, terms, conditions, and clauses associated with renting out a home. It includes items such as security deposits, monthly rent, property details such as size, address, and kind, and, of course, the length of the lease. It is critical that you read the entire rent agreement, including all regulations and restrictions, before signing it.
Ans. Yes, according to your agreement with your landlord, he can demand one month's rent for painting costs. As per your agreement with the landlord, you cannot refuse to pay the painting charges. This is something that all the property owners have in common.
Ans. The lock-in period meaning in a rent agreement binds the parties, and no one can be allowed to leave it until the initial lock-in term specified in the Rent agreement expires. Returning the advance payment after two years is not a legal justification.
Ans. The contract must be printed on stamp paper with a minimum value of Rs. 100 or Rs. 200. Stamp duty is 1% of the annual rent plus deposit paid or Rs. 500/-, whichever is less.
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Simrit Siingh
Need to have lease agreement renewed.
June 6, 2020, 6:53 pmNoBroker.com
Hi Simrit, We'll be glad to help. Let us know how to connect with you to help you better. Thanks! Team NoBroker
June 10, 2020, 4:14 pm