Leasing out a domestic property involves a number of legal procedures and financial arrangements. You can look for a tenant on your own or appoint a licensed estate agent to handle the leasing of your property. In either case, you are required to provide accurate property information to your potential tenant before entering into a lease. If you choose to engage an Agent, you should clarify with him or her details of the engagement such as the amount of commission and the time of payment.
Before entering into a lease agreement, the lessee should ensure/ verify:
- that the lessor has proper title of the property.
- the society share certificates are authentic in order to
ensure that the lessor has the title to the property.
- the lessor is either the owner of the property or an
authorised power of attorney holder. The agreement should
be signed by the lessor himself or his duly authorised Power
of Attorney.
You need to be aware of your rights and responsibilities as a landlord and pay attention to the following points to ensure a smooth leasing experience. Here are useful tips on leasing of property for the landlord/lessor:
- Get a broker or a lawyer to review the lease of any obligation
or duty and to delve more deeply into the business points
of the lease.
- Make sure that any lease you consummate will produce the
intended result, in an enduring manner, beyond when the property
is to be mortgaged or sold.
- The Lease Agreement should meet the needs of both tenant
and landlord. The lease should be thoughtfully drafted and
can severely impact your return on investment.
- Structure the terms of a renewal sensibly keeping in mind
the tenant's negotiating posture.
- Keep a copy of the lease agreement as the tenant may request
a copy of it in their first Request for Proposal.
- Keep the property furnished and ensure good condition of the
furnishings. The potential lessee might want to inspect it.
Also issues like sufficient infrastructure (i.e. access roads,
power, water supply, shopping areas, hospitals, bus stations,
recreational facilities, etc.) have an important bearing on
the value of the property. If there is any leakage, the lessor
should ensure that it is rectified.
- If improvements are required in electrification, it should
be listed and immediately attended to. The lease negotiation
process must be made as simple and efficient as possible for
both the parties. Delays over minor details will lessen the
interest.
- Almost all commercial lease deals with the possibility
of casualty damage. The tenant should be able to understand
whether the premises can be used within a reasonable period
after the damage, or calls for alternative leasing arrangements.
He/she would also want to know whether they will be required
to spend additional funds to return to normal business operations.
Tips for the tenant/lessor
- You must be sure about how long you will stay. For those
planning on a commercial lease, you need to have the far-sightedness
to know how long your business can operate effectively in
the space you plan to lease. It can be one of your most important
decisions on the firm.
- You must be aware of the serious legal implications of breaking
a lease. You could lose your security deposit, be denied access
to the space or a suit could be instituted. You must make sure
that you are committed to the length of the lease and the
location before you sign.
- You can make the landlord see how renewal clauses are a
good way to keep tenants without having to renegotiate their
leases after the original term expires.
- Since you are ultimately responsible for meeting the terms
of the lease, you must ensure that the terms and conditions
are not lopsided. Make sure that it is free from any clauses or
conditions that may unfairly affect your rent, restrict your
use of the space, or result in an unexpected lease termination.
- See to it that no unreasonable disclaimers about the building
or services are made.
- You may seek the assistance of your broker, and ask the landlord
some crucial questions to make sure it is the best property
for your business or accommodation needs.
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