A guide on How to make a Rental Agreement

Shivani Sinha | 04-Mar-2016

A rental document is nothing but a legal document that creates a short term agreement regarding a rental property between the owner and the renter. The most commonly rented property would be equipments or apartments. Before renting a property a rental or lease agreement is issued. This agreement should include all the details, the terms and conditions as well as the practices allowed or prohibited by the landlord. It is this agreement, which will save you as well as your property from any misuse or harm, in case any dispute arises. Hence, it is advised that each landlord should enlist all the essential clauses in his/her rental or lease agreement, which explains all the terms in details.


 

It is advised to include the following details in your rental or lease agreement, to ensure that there is no dispute or differences in between you and your tenant-

STEP 1 – DRAFT THE AGREEMENT

Draft the agreement with all the details mentioned below - 

1. Should include names of all tenants
Every adult member of the family living in the rental unit, including both members of married or unmarried couple should name themselves as tenants and sign thereupon the lease or rental agreement. This establishes each tenant responsible for the terms legally-for full amount of the rent as well as proper use of property. This makes it possible for you to legally seek entire rent from either of the tenants, if the others fails to pay or skips out. It also indicates the termination of rental agreement, if even one of the tenants violates important terms of the tenancy.

2. Will limit the occupants
It is important that your agreement should clearly specify the rental unit as the residence of only the tenants who have undergone through the rental agreement signing process and their minor children. This will ensure that no unspecified person enters your property, or uses it without your concern. Only people who have gone through the screening and have been approved by you can live in your property. This clause holds value due to the fact that you can evict a tenant who tries to make his/her friend or relative move in without your permission.

3. Term of the Tenancy
The rental agreement and every document related to it should clearly state whether the agreement is rental or fixed term lease. The difference between both of them is rental agreements run month to month and get self renewed unless the landlord or tenant terminates it, whereas in case of leases, the agreement lasts for a year. The type of agreement would be decided on the choice of the tenant-whether he/she wants to stay long or how much flexibility they require.

4. Rent Details
You rental agreement(or lease agreement) should specify all the important details such as the amount of rent, the due date of rent, how to make the payment(mail or other ways).In order to avoid disputes due to confusion of the language, it is advised to spell details as-

  1. Acceptable payment method-By check only
  2. If there would be any late fees included along with rent, if the rent is not paid in time, the amount of fees and grace period if any
  3. Any extra charges if the check of payment bounces

5. Details regarding Deposits and Fees
Many a times the main reason for disagreement between the landlord and tenant arises due to the use and return of security deposits. In order to avoid this confusion and differences, make your rental or lease agreement clear about the limit of deposits and the use and return of them. Include details such as-

  1. The rupee amount of security deposit (comply with state laws when setting maximum amounts)
  2. How will you use the deposit (for instance, damage repair) and how the tenant should not use it(say applying it to last month’s rent)
  3. The details regarding when and how will you be returning the deposit and account for deduction after the tenants moves out of the rental apartment
  4. Any legal fees that is non-returnable, such as say cleaning or pets

It is advisable to list details such as where the security deposit is being held and whether interest gained on security deposit will be paid tenant or not.

6. Details about Repairs and Maintenance
To ensure that your tenant is working on his/her responsibilities for the repair and maintenance of the rental apartment, it is advisable to clearly list the responsibilities of tenants for repair and maintenance, in the rental or lease agreement. It should include-

  1. The responsibility of tenant to keep rental premises clean and sanitary and pay for the damages, if any, caused due to his/her neglect.
  2. The responsibility of the tenant about alerting you for any dangerous or defective conditions in the rental premises and property. It should include the details of your practices for handling the complaint and repair requests as well.
  3. Restrictions on any alterations or repairs by the tenant, such as whitewashing the walls, setting up a CCTV or getting in a chimney.

 Other details regarding any restrictions-

7. Restriction on illegal activities
In order to avoid any trouble among the tenants, property damage or lawsuits filed by neighbours, it is advisable to include a clause in the rental agreement, prohibiting disruptive behaviors such as nuisance, noise and illegal practices such as drug dealing.

8. Restriction on pets
Mention in the rental agreement clearly, if you are allowing or disallowing keeping of pets by the tenants. Even if you allow them mention details such as the number of pets you allow, so as to ensure that your property doesn’t becomes a waste yard.

9. Complying with relevant laws
Ensure that your rental or lease agreement complies with relevant laws namely health and safety codes, rent control ordinances, occupancy rules and antidiscrimination laws.
 


STEP 2 – PRINT ON THE STAMP PAPER

 Look for a licensed Stamp vendor to pay the duty for procuring non judicial stamp paper. The content mentioned on the deed and all the details mentioned above are then printed on the stamp paper. Stamp Duty can be securely paid to the Government by E Stamp paper.

STEP 3 – ATTEST BEFORE 2 WITNESSES

Get your rental agreement signed by the landlord and tenant and get it attested before two witnesses in order to maintain the authenticity of the agreement and it is also a requirement notified by the Government.

STEP 4 – REGISTER 

After getting your rental agreement attested, register it at the office of the Sub- Registrar nearest to your locality to get the process finalized. After this, you can use your rental agreement for all official and Government purposes.

 

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of Fagnum.com. The writers are solely responsible for any claims arising out of the contents of this article.
About the Author
Shivani Sinha
A Master degree holder is a Content Developer and an SEO specialist. Having more than 6 years of experience into content development and marketing, she has contributed substantially in this arena. She is good at brainstorming and fast in writing crispy content, bold slogans, catchy captions and punchy one liners. Her stories are well researched and provide for an interesting read. She enjoys working in association with entrepreneurs while spearheading business launches providing marketing advice.