Legal Agreements

Sample Format of Rental Agreement

What is the Rental Agreement?

Renting out properties is an age-old practice in the society which continued for long without any definite laws and rules governing the Landlord-Tenant relationship. Bitter experiences of either of the parties and long pending disputes brought a realization that substantive laws are required to supervise the Tenancy and to guide the Courts in event of disputes over the same. Here we are providing details regarding rental agreement and also provide a rental agreement format.

The Rental Agreement is a legally enforceable agreement between a Landlord and a Tenant for their relationship in respect of rented premises, stating the terms and conditions of the tenancy and the details of the parties and premises.

Written Rental Agreement Format

Written Rental Agreements form have been in trend for a long time. They bring about uniformity and define the terms of relationship. Though a rental agreement format is preferred by the parties to avoid the hassle yet there may be occasions where the parties may choose to include some particulars to suit the premises or individuals.

Who is a Tenant?

A tenant is a person by whom or on whose behalf the rent of particular premises is payable. It also includes a subtenant and a person who continues to possess the premises after the tenancy has been terminated (unless an eviction order has been made by the appropriate court).

Who is a Landlord?

A person who is either presently receiving, or is entitled to receive, the rental amount of particular rented premises, whether for his own OR on behalf of another person OR as a trustee, guardian or receiver for another person.

What Constitutes a Rental Agreement?

• The date of Execution of the Agreement and the date of commencement of the Tenancy
• Period of Tenancy
  • If can be renewed or no such option
  • If renewable, then at whose option and for what period
• The rental agreement should very clearly mention the details of the parties
  • Name, age and permanent and current address of the Landlord
  • Name, age, permanent address of the Tenant
• The tenant may be a company, firm, and bank, a cooperative society, in which case the Legal name and registered address must be mentioned. Also, the Name, age, residential address of the Authorized Person be specified. You can also download the rental agreement format from the given link of this page.
• The details of the Premise being rented out
  • The address as per the title deed
  • Measurements and Schedule of the property
  • Number of floors, rooms, parking space, if any, Terrace etc
  • Details of appliances, furnishes, upholstery if included with the premise
• Purpose of Tenancy: If the premises shall be used for the residential purpose or commercial
• Rental amount and its breakup
  • Maintenance amount, to be paid to any committee, society etc, additional or inclusive
  • Charges of water supply, electricity, additional or inclusive
  • Any other charges which require being paid by the tenant
• The agreement mentions if the rent may be escalated or not, how much (percentage) and after that
• The due date for paying the rental amount must be mentioned. Example: ‘The rent shall be paid by the 5^th day of each calendar month.’
• The agreement may specify the mode of payment. Example: ‘The rent shall be transferred to the Account of the Landlord, details of which are provided below……..’
• The agreement shall mention clearly if any alterations can be made to the structure of premises by the tenant, for both permanent and temporary.
• Who shall bear the cost of repairs and maintenance of the structure
• Provision of Sub-tenancy
• If any security amount may be deposited with the Landlord, which shall be returned to the Tenant upon vacating the premises after due deductions.
• The agreement shall mention the notice period which may be given to the other party for terminating the Tenancy before the expiry of the same.
• The Agreement shall also mention the conditions under which the tenancy may be terminated without any notice period. Example: ‘The Landlord shall be at liberty to serve a Notice of Immediate Termination of the Tenancy, to the Tenant in event that the Tenant fails to pay the rent by the 7^th day of a calendar month.’
• Amendments, if any allowed and how.
• Who all shall be considered as tenants, i.e; If the named tenant in the agreement dies, then who may be legally allowed to continue as a tenant.
• The provision for the event wherein the Landlord either dies or sells/ transfers his rights in the rented premises to a third party.
• The Agreement shall mention the Jurisdiction and Governing Law where the parties may approach in event of a legal dispute.
• The Rental Agreement must be read thoroughly by the parties and signed in presence of two independent adult witnesses.

What Must Be Kept in Mind Before Signing the Rental Agreement?

By Landlord

• The agreement should clearly mention the terms of default on part of Tenant; in payment of rent, destruction of property etc and the rights of the Landlord to deal with the same.
• The premises shall only be used for the purpose it is rented for. Example: A house rented for the residential purpose may not be used as a commercial office or shop etc OR a space rented for commercial activity may not be used as a guest house
• The provision or sub-tenancy and its implication must be discussed and provided in the Agreement.

By Tenant

• The title of the landlord must be thoroughly verified to avoid any future conflicts.
• A provision must be inserted for the event where the Landlord either dies or transfers/ sells the rented premises to another.
  • Attornment of Tenancy: It is the transfer of rights of a tenant to the new owner who shall then act as the Landlord and get in the shoes of the Previous landlord as per the Rental Agreement format

Both Parties

• Must thoroughly read the Rental agreement form before signing the same
• Must obtain a copy of the Rental Agreement.

To know more about rental agreement format and registration visit us at Enterslice.

Also Read: Sample Format of Dealership Agreement
Sample Format of Lease Agreement
Sample Format of Memorandum of Understanding (MOU)