With the rapid (almost crazy) increase in real estate prices, most people are forced to rent out apartments. Buying an apartment, for long the middle class dream has become a definitely upper class fantasy.
So now that you need to rent a property, you must prepare your rental agreement with great care. A simple Rental Agreement is prepared so often by so many people that they forget how the small things matter. Like is often said, god is in the details.
What must I be clear about?
First of all, be very clear about the rent and the security deposit. Not just the amount, but also on which date the amount is to be paid and how you intend to pay it – by cash, cheque or online banking etc. Next, describe yourself and the tenant / landlord very clearly and systematically. On which date will the property be taken on rent? No, not “around the 15th” or “third week” Be precise.
Next, describe why you want the property on rent. Is it for your personal residence? Or do you also intend to run your medical practice or small shop there? This makes a big difference. Take care of the other little things. Do you intend to keep pets? Is there a building association or society? Does it need to be informed?
Finally, take care of the unpleasant part. If something goes wrong, who has to pay for the repair? What if a major repair is needed? Typically, the landlord pays for the major repairs and the tenant pays for minor repairs. Any damage caused is usually paid for by the tenant. Still, take care to put these things down in writing.
Is there anything I am forgetting?
Yes, after the agreement is prepared, it has to be printed and signed by two witnesses. Choose people who are not mentally unsound and known to you. (The Landlord or the Tenant cannot be the witnesses). Very often, people prefer to print the document on Stamp Paper. This is not strictly necessary but if you are able to, print the document on Stamp Paper. Decide on the value of the Stamp Paper in advance.
And in case things turn sour, remember to include a notice period so you cannot be unceremoniously thrown out overnight. A one month notice period for both the landlord and tenant is common. Most people also make a lease agreement for 11 months, since such an agreement need not be registered and is much easier to execute.