Return security deposit
The sum of the security deposit varies from city to city. In metros, this amount is higher than in Tier-II cities. Although refundable, there are often disputes over the payment of the security deposit. “The rent agreement should clearly stipulate that the security deposit, if any, paid by the tenant should be returned landlord Upon expiry or termination of the licence,” says Arnav Nagalia, Advocate, Trilegal.
You can ask for a separate payment receipt of the security deposit with the details of the check number, date and signature of the owner, says Soumi Bhatt, General Counsel, Bankbazaar.com.
Penalty for delay in return of security deposit
Getting a refundable security deposit out of the landlord’s pocket is a nightmare for any tenant. In the rent agreement, it should be clearly mentioned that if the owner fails to return the security deposit, the tenant can retain the possession of the flat without paying any rent, says real estate expert Nitin Bhatia.
Nagalia adds that the rent agreement, firstly, may provide for payment of interest by the landlord to the tenant, if the security deposit is not returned by the landlord in time. He adds that another clause should be added that the tenant is within his right to set off the rent against the security deposit for the last month of the period. Usually, a tenant gets a refund as soon as he vacates the premises, but many landlords willfully lax in returning the tenant a lump sum. Mithali Naik, Associate Partner, DSK Legal, says, “A necessary clause should be included in the agreement to ensure that the security deposit is returned immediately upon termination of the contract and the possession of the premises is handed over to the landlord.”
rent payment timeline
The rent agreement should always mention whether the rent will be paid in advance or after the month is over. “One of my clients vacated the flat and the owner demanded last month’s rent. My client thought he was paying rent in advance because he had paid one month’s rent before moving into the new house. In the end, that much After hassle and taking out all the bank statements, they proved that the rent was paid in advance,” says Bhatia. Therefore, it is necessary to state in the agreement that the rent will be paid on or before a certain date every month.
flexible termination rights
Ideally, there should be no lock-in period in the rent agreement and the tenant should be able to vacate the premises after giving one month’s notice. However, landlords typically impose a lock-in period during which the licensee’s or tenant’s ability to terminate the agreement is restricted. “It is worth considering mitigating circumstances such as breach and loss by the landlord Property Making it uninhabited, forcing major events like pandemic to be an exception to the lock-in period, etc.,” says Naglia. If the tenant wants to occupy the premises for a longer period, he has to demand a longer lock Should—in period, says Naik.
claim of the owner of the property
It is important for the tenant to ensure that the landlord is the rightful owner of the property. Says Naik, “The tenant should ensure that the ownership and possession of the premises is with the landlord. “The rental agreement should also state that he is the owner of the premises and the premises are free from burden and litigation,” says Nagalia.
maintenance and non-maintenance charges
Another area that can emerge as a bone of contention between landlord and tenant is the inclusion of maintenance and non-maintenance charges in the rent agreement. “It should be decided between the parties as to who will bear the monthly maintenance, but for non-maintenance charges, as in case of apartment associations who keep on charging additional amount for corpus fund, sinking fund, painting of apartment etc. These should be borne by the property owner as they do not come under the purview of maintenance charges,” says Bhatia. Reason: Payment under these heads adds long-term value to the property. Thus, it should be clearly mentioned that non-maintenance charges will come in the kitty of the landlord.
Nagalia suggests that another line should also be included that the landlord is responsible for settlement of utility bills, maintenance charges and any other dues in respect of the property before the commencement of the license. “If the tenant pays any of these amounts, he should be able to adjust subsequent rent payments against such amounts,” he says.
Government taxes and other fees
Often disputes arise between the landlord and the tenant over the payment of separate government taxes. “The rent agreement should provide that property tax and other such taxes, cess and amount due in respect of the premises should be the responsibility of the landlord,” says Nagalia. (The agreement should clearly mention which party to bear the taxes and levies, including property tax, municipality tax, sewer and drainage charges, water bills, other charges.)
List of fittings and fixtures; property breakdown
A clause should be inserted in the rent agreement stating that the fittings and fixtures provided by the owner must be in working condition. Bhatia says, “With the aging of the property, natural wear and tear is evident. Include a clause that the tenant is only liable to bear the cost for damages that do not form part of the natural, reasonable and normal wear and tear of the property. Is.”
He cautions that in many cases the owners have included a clause to deduct the cost of painting the flat from the security deposit. “Terms and conditions should be clarified and mentioned in the rent agreement,” he says.
Terms for renewal and brokerage
There should be a clause in the rent agreement regarding renewal of the agreement if both the parties have mutual consent to avoid any kind of dispute in future. “This section should be about percentage increase in fares,” says Bhatia. In the issue of brokerage, a tenant must put in a clause that the brokerage will be a lump sum. Says Bhatia, “Many brokers insist on taking brokerage at the time of renewal of the contract. One should talk to the landlord on this issue.
Protection against sale of property by landlord
There have been cases where landlords sell their property while tenants are still occupying the premises. This causes unnecessary trouble to the tenant. “In order to protect its interests, the rent agreement should provide that the tenant’s right to use the premises should not be affected by the transfer of the premises by the landlord and the terms of the rent agreement including returning the security deposit to the new owner should be bound by, if any, to the tenant,” says Naglia.
indemnity clause
The rent agreement should contain an indemnity provision in which the landlord indemnifies the tenant for loss or damage caused by the landlord due to misrepresentation or breach of contract or due to a defect in the landlord’s title to the premises. Nagalia says. Also, it is pertinent to check whether the landlord has obtained all necessary consents to lease or license the premises such as permission from the society/apartment owners’ association in which the premises is situated.
All these clauses should clearly mention the rules and regulations relating to fees and property. Bhatt says that the landlord and the tenant must agree to the contract by mutual consent to avoid disputes.