Important clauses to draft in a Rent Agreement

Rent Agreement, nrihelpinfo

Giving your property and land for rent is one of the simplest sources of income in India. When you own multiple properties, it is very fruitful to put the property for rent, whereby a tenant rents your property for residential or commercial purposes. However, the rental-arrangement must be regulated by mutually chosen terms and conditions, laid down in a written document known as a rental/rent agreement.

What is Rent Agreement?

Rent Agreements, also known as Rental or Tenant-Landlord Agreements are of enormous importance because they govern the rights and responsibilities of the owner of the property and the tenant who wants to rent the property. A rent agreement is a contract between a tenant and landlord whereby a landlord grants the tenant the right to maintain the residential premises.

In order to avoid a chance of disputes and in order to secure your interests, it is essential to include the following clauses in your Rent Agreement

Security Deposit:

Owners of property usually take a security deposit from the tenant in order to assure that there is some form of financial security in case the tenant creates any form of damage to the property or in a circumstance in which the tenant does not pay the rent and is not traceable. It is very necessary to mention in the agreement whether the security deposit is non-refundable or refundable. It is also advisable to involve the time framework within which such security deposit must be refunded.


The Rent Agreement must specify the amount of rent paid by the tenant, the mode in which the amount must be made as well as the date before which the amount of rent has to be made. The rental agreement may also involve any penalty levied on non-payment or late payment of rent.

A term of the Tenancy:

Owners of property often insist on having a lock-in period of at least 6 months in order to assure that a tenant at least stays for 6 months and pays the rent for that period. The rental agreement must specify the lock-in period, if any, and the term for which the property is granted for rent. Rent agreement registration depends upon the duration of the tenancy.

Repairs and Maintenance Charges:

It needs to be made clear in the rent agreement as to whether the renter has to pay any maintenance charges for water, electricity, etc. over and above the rent amount. This is usually excluded from the rental agreement, and landlords later ask tenants to pay a monthly expense in addition to the rental agreement. It must also be made clear in the contract whether the landlord or tenant would be liable to pay for the repairs for damage not made by the tenant. Using the property over time will cause wear and tear to the property; the rent agreement must mention who would bear such charges.

There are various other charges which are usually associated with housing scheme which is in the form of flats and apartments, such as parking charges, society charges, payment for the painting of the building etc. These charges are associated with the rise in the long-term value of the property and should be carried by the owner of the property. A clause to this effect should be involved in the rental agreement.

List of Amenities and Fixtures:

The rental agreement need mention the fittings, fixtures, and amenities in working condition, already available on the rented property. This includes every furniture, geyser, air conditioner, lighting, etc. on the rented property.

Grounds for Eviction:

The landlord must include an eviction clause in the Rental Agreement which excludes the responsibility of the owner in a matter the tenant indulges in any illegal activities. Also, the tenant should assure that the Rental Agreement, as well as the property, comply with all relevant laws and government regulations.

Renewal of Rental Agreement:

Since the rent agreement defines the duration for which the Rent Agreement is valid, the renewal of the Rent Agreement is a crucial factor. The rental agreement needs to mention any percentage of hike in the rent amount at the time of renewal.

Rent Agreement Registration

A rent agreement must be in the form of a written document, printed on the accurate stamp paper. This called rent agreement registration, which is necessary if the term of the agreement is more than 1 year, or if the rental agreement is made on a year-to-year basis.

Any rent agreement which is performed for more than a year and isn’t registered, will not be admitted in court as evidence if any dispute arises between the tenant and landlord. However, rent agreement registration is not required if it is an 11 months’ rent agreement.

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Important clauses to draft in a Rent Agreement

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