Planning to sign a lease or rental agreement? Keep a few tips in mind to ensure that there are no disputes in the future.
While tenants often share nightmarish stories about stubborn landlords, property owners complain about careless tenants. It has been noticed that several such disputes could have been resolved easily if the lease or rental agreement was clear and comprehensive. Whether you are the landlord of a property or the tenant, it is important that you protect your interests by having a fool-proof agreement.
Listed below are the components that must be clearly addressed in a property rental or lease agreement:
1. Security deposit: Security deposits are often a bone of contention between the owner of the property and the tenant, comments Narender Kumar from Legend Realtors. Experts state that the agreement should specify the amount of security deposit, along with provisions regarding the return of the amount after the lease ends and the mode of such refund. Additionally, the agreement should also state what would be considered as damage if a seller plans to use the deposit against any damage caused by the tenant.
2. Payment policy: The rent amount and the date by which the payment is expected to be made is also a fundamental part of the agreement. Clearly stating the due date for the payment of rent as well as the details about the payment of utility bills, which might be in the name of the landlord, will help avoid misunderstandings.
3. Annual hike: Another common complaint of tenants is that the landlords raise the rent unduly high after the lease term ends. While annual hikes are not illegal, specifying the increase in the agreement can ensure that the tenant is aware of the same. If the lease is to be renewed in the absence of this information in the agreement, the landlord and tenant would have to discuss and come to an agreement about the revised rent.
4. Pet policy: Since majority of landlords are not fond of tenants with pets, a rental agreement should explicitly state if pets are allowed in the house or not, states Kumar.
5. Repairs and maintenance: It is generally accepted that that any repairs required are the owner’s responsibility while tenants are usually allowed to take care of certain maintenance activities and, in some cases, minor repairs. However, it is advised that the agreement specify the responsibilities of each party to avoid unnecessary confusion and arguments.
6. House rules: If there are any rules or restrictions for the residents, such as no music after 10 PM, the same should be explicitly mentioned in the agreement. This will ensure that the tenant has a clear idea of what he can or cannot do.
7. Access to common spaces: The agreement should also spell out which common spaces or facilities, including terrace, gymnasium, swimming pool, parking etc., can be used by the tenant.
8. Furnished property: Legal experts advise that in case of a furnished property, the agreement should also contain a list of all the appliances, furniture, and other furnishings provided to the tenant as well as the quantum of compensation for any damage to or loss of these items.
9. Notice period: Another major component that should be present in a rental or lease agreement is the notice period that either party must give for vacating the property, states Prashant Nath of PropertYes De Emirates. Specifying the notice period will make it mandatory for the tenant to inform the landlord well in advance of his intention to prematurely terminate the agreement.
10. Breach of contract: Like any other contract, the lease agreement should mention which conditions would lead to the termination of the contract between the landlord and the tenant. These could include completion of the lease period specified in the agreement, adequate notice by the tenant, and violation of house rules stated in the agreement.
Remember that clarity in the clauses is a must in order to ensure that an agreement cannot be twisted in a court of law. Avoid ambiguous or convoluted statements as they may be misinterpreted. Further, experts insist that both landlords and tenants should make themselves aware of the local laws pertaining to properties and tenancy as this will allow them to better understand their rights.