Rent Agreement

A rent agreement is a legal Document that formulates the provisions related to the occupancy of premises. There are different provisions which regulate rent agreements in India. It is always crucial and mandatory to have such agreements in writing for future use. Drafting a Rent Agreement Unde..

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Rent Agreement- An Overview

Rent agreement is a legal and formal Document which governs the provisions related to occupancy of the premises. There are different forms of rent agreements which govern the parties. The owner of the land or property is the landlord and the individual occupying the property for a particular period of time is the tenant. Hence the parties involved in a typical rent agreement would be the landlord and the tenant.

All the requirements related to the rent agreement would be specified. Hence any form of future relationships between the parties are determined through this rent agreement.

Types of Rent Agreement

The following are the types of rent agreement:

Types of Rent Agreement
  • Residential Rent Agreement

    This agreement is between the landlord and the tenant governing the relationship and the use of property. Residential rent agreements would always be negotiated between the parties.

  • Commercial Rent Agreement

    Commercial rent agreements would usually include premises which are occupied by a large organisation. However, there can be smaller properties which are occupied by companies. The landlord and tenant relationship would also exist for this form of rent agreement; however the landlord would usually be a company.

Benefits of a Rent Agreement

The following benefits can be secured through this form of agreement:

Benefits of a Rent Agreement
  • Written

    Rent agreements would be a formal and legal relationship between the parties. Always these forms of agreements would be in writing. Hence it would be a Document for reference in the future for either of the parties.

  • Legal Compliance

    By entering into an agreement, compliance can be maintained by the parties. As the agreement is in writing the provisions related to law would be applicable to both the landlord and the tenant.

  • Relationship between Parties

    A relationship is formed between the parties by entering into a rental agreement. The relationship will be purely commercial in nature and the parties have specific responsibilities to carry out.

  • Liquidity

    There is constant form of liquid funds through monthly rents for the landlord. This would be advantageous to the landlord. Rather than selling off the property in a onetime transaction, there is monthly income coming to the land lord. The tenant would also not have to pay considerable amount of money related to monthly rent.

What are the Contents of a Rent Agreement?

The following contents have to be included in a rent agreement:

What are the Contents of a Rent Agreement
  • Name of the Parties
  • Occupancy
  • Period
  • Premises
  • Security Deposit and Rental Amount
  • Tenants Duties
  • Landlord Duties
  • Clause related to Sub- Letting
  • Maintenance and Repairs
  • Breach of Contract
  • Governing Law and Jurisdiction
  • Name of the Parties

    The first thing to consider in a rent agreement is the name of the parties. This would include the landlord name and address and the tenants name and address. Other information related to contact must also be included.

  • Occupancy

    The area of occupancy of the premises must be mentioned in the rent agreement. Specific portions have to be delineated for the rental agreement. For example the rent agreement should have accessible portions of the premises and restricted portions of the premises.

  • Period

    The time period for rent has to be clearly stated in the rental agreement. With this the information as to consent of the parties for an extension must also be stated in a rental agreement.

  • Premises

    In these clause full details of the premises must be provided to the tenant. The specific address of the premises must be mentioned. The square feet of the premises would have to be included here. Apart from this accessible areas and restricted areas must also be mentioned.

  • Security Deposit and Rental Amount

    In the next clause information on the security deposit must be provided. Usually the security deposit would be a one off amount covering the property for a particular period of time. Usually this period would be for a span of 10 months or a year. Along with this clause the rental amount must be mentioned. If there is a delay in the payment of rent, then the interest chargeable must be mentioned. A clause should be mentioned that the interest would be charged after this date if there is late rent.

  • Tenants Duties

    This clause would include all the responsibilities and duties which have to be carried out by the tenant.

  • Landlord Duties

    This clause would include all the responsibilities and duties which have to be carried out by the landlord.

  • Clause Related to Sub-Letting

    There must be a clause related to restriction on subletting the property to other individuals or tenants. Breach of such provision must attract penalties such as evicting the tenant from the property.

  • Maintenance and Repairs

    This clause would include maintenance and repairs carried out by the landlord. Which repairs and maintenance would be included in the agreement? Annual repairs or maintenance has to be covered under this.

  • Breach of Contract

    This provision would cover situations which lead to the breach of the rent agreement. The remedies which have to be considered have to be mentioned specifically here.

  • Governing Law and Jurisdiction

    Usually there would be a clause related to jurisdiction where the courts have authority to take disputes.

Requirements in a Rent Agreement

The following requirements have to be carried out:

  • Verification from Police

    This step would be carried out to understand the background of the tenant. The character and antecedents would be determined through this process. The landlord to carry out such procedure would have to register online for police verification process.

  • Negotiation with Tenant

    Once the police verification is clear; the next step in the process would be to negotiate the terms and conditions with the tenant. The rates of rent would also be discussed here.

  • Drafting

    After this the landlord should go ahead and appoint a lawyer to draft the terms of the rent agreement.

  • Registration

    If the rent agreement is for a period of more than 11 months then the same has to be registered under Section 17 of the Indian Registration Act.

Documents Required

  • Aadhaar card or the receipt received or any other form of identification ID.
  • Submit the original passport, if the tenant is not an Indian Resident
  • Power of Attorney should be presented if ID is demonstrating another person for the registration.
  • Original copy of proof of ownership (landlord’s property).
  • Two in recent times taken passport size photographs.
  • Get the Residential rental agreement printed on the stamp paper of the recommended value.

Frequently Asked Questions

A rent agreement is a legal contract between the landlord and the tenant. It brings out the relationship related to renting a particular premise for a period of time.

The following are the types of rent agreement:

• Residential Rent Agreement

• Commercial Rent Agreement.

Security deposit is a lump sum which is given by the tenant to the landlord as a security.

Yes usually insurance in a rent agreement would include the insurance taken out for the agreement by the landlord.

Rent review is the process in which the rent is reviewed on a yearly basis.

Yes it would be crucial to secure police verification for the property to carry out complete background check on the tenant.

These types of agreements require to be registered if the duration is more than 11 months.


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