'Rent' refers to the mutually fixed amount of money that is paid in lien for possession of the property of landlord for a fixed period of time. In a lease, for instance, the tenant gets hold of possession of the immovable property (commercial or residential) of the landlord for a certain time, express or implied, or in perpetuity but the ownership is retained by the landlord/landowner.
The rent for a property is dependant on factors that fluctuate in diverse circumstances. These include:
- Terms outlined in a contract/ lease agreement
- Location of property
- Prevalent rent in that locality
- Productivity of property
- Usage of property
The renting of a property is effected by a "Lease Agreement". This agreement is signed by both the tenant (lessee) and landlord (lessor). A lease or tenancy agreement is designed to protect the rights and obligations of both the tenant and landlord. However, there is no significant legal difference between the "lease" and "tenancy agreement".
Clauses in a typical Rent/ Lease Agreement
- Interested Parties
- Details of the property to be leased
- Enforced duration of Lease
- Lease/ Rent amount
- Terms and conditions on which the property is leased.
- The date of expiry of agreement.
- Lease termination clause
Rental laws in India/ Rent Control legislation:
The rental laws in India governing the tenant rights and disputes
are the state property and contract laws. Rent Control Act is
a State subject and the State Government has the exclusive jurisdiction
to legislate on the subject.
State rent control legislations in India have come into being to protect the interests of the tenants from the landlords. Such State laws also deal with eviction of tenants. Each State has laid down its own set of grounds for eviction. However, certain grounds are common to all the States. They are:
- The landlord has a bonafide/ genuine need to provide for residence to the members of his family, dependant on him.
- The tenant has been a defaulter in rent payment.
- The tenant has sublet, assigned or parted with the possession of the rented property without the consent of the landlord.
- The premises need major construction/repairs/demolition.
- The tenant has used the premises for any act which is out of character with the purpose agreed.
- The tenant has acquired/built or has been allotted another accommodation.
- The tenant has caused nuisance in the neighbourhood or has damaged the premises or has not used it for a specified period of time.
Where rent control legislations apply, tenants are allowed the privilege of continuing to enjoy the possession of the property in spite of the termination of the lease. As tenants are protected by statute, such tenants are called statutory tenants. A tenant can be evicted from the premises only if the landlord establishes a ground stated in the respective rent law to the satisfactorily to the rent controller.
Rent control legislations have an exclusion clause which keeps certain premises out of the purview of rent control laws. Some of the States with his clause are Delhi, Haryana, Bihar, Andhra Pradesh, Kerala, Maharashtra and West Bengal. These exempted premises are dealt with by the Transfer of Property Act.
It is thus advisable to seek professional help to avoid the pitfalls of the complex laws governing rent/lease of immovable property in India. Take the help of our legal stalwarts who have the expertise of guiding you through the complex terms of different rental laws effective in different States across India.
Definitions
- Tenant / Lessee / Renter: A person or corporation
who pays rent to live or use someone else's land or property.
He possesses the property and uses it as per his own requirements.
- Landlord / Owner / Lessor: A person or
company or body or corporation who is the owner of the property
or land which is rented to an individual or business in exchange
of periodic payments of rent.
- Rent: A regular payment by a tenant to
a landlord for use of property.
Legal Tips for Renting
- The landlord should keep themselves well informed about legal rights and duties as landlord (Ask our experts, if you want)
- While letting out the property on rent, prospective tenant
should furnish all details about his previous track record
and history. Also get the tenant verified by police. Ask for
a proof of identity.
- The "Tenancy Agreement" should be duly signed in accordance with the prevalent laws in your state. (Learn about your state rental laws from our legal experts). Try and review rent agreement once a year.
- Make sure that you properly read and understand all the
clauses of Tenancy Agreement before signing. Date on agreement
is indispensable
- The tenant should always keep accurate records of rent paid with proper details of date of payment and amount paid.
- Always check for signature variations along the agreement pages. To avoid inconsistency in signatures, prefer to have thumb impressions along with the signatures.
- Tenant should make sure that the person letting out the property is legally
eligible to let out the property. Is he the legal owner of
the property or does he posses the adequate Power of Attorney?
If he holds a Power of Attorney, check if the seller actually
possesses the right to sell the intended property.
Take services from a property lawyer before letting out your property. Avail of his services for drafting the Tenancy Agreement and outlining the rights and obligations of the contracting parties.
Related Laws:
- Transfer of Property Act, 1882
- Delhi Rent Control Act, 1958
- Maharasthra Rent Control Act, 1999
- Bombay Stamp Act, 1956, 1958
- Indian Easement Act, 1882