10 Lease Terms You Must Include in Your Rental Agreement
Across the nation, and due to the housing and unemployment crisis of the past decade and a half, many former homeowners have returned to renting property. Plagued by high unemployment, many college graduates have also put buying a home aside and settled in a generation of renters.
Residential demographics from 2012 obtained by the National Housing Council indicate that renter-occupied households make up 32% of the total Indian households. That number changes depending on the region with cities like Delhi and Mumbai having 50% and 42% (respectively) households in rental properties.
Buying a property in India, these days involves greater expenses and can also be termed as a life changing decision. It can be very difficult to buy a new property, but renting as always has been an option to be considered. A property could mean a lot to someone, it could be a new home to a family, a personal space and requirement for someone working alone, away from family, etc. hence the decision of buying or renting a property is a big life decision which should be taken carefully and after a lot of investigation.
If you’re a landlord or property owner, your lease agreement (Online rental agreement) is probably one of the most important documents you use. it is the legal agreement between you and each tenant that occupies the space you own, and therefore, it acts as the rules by which they live in that space as well as defining the repercussions should the rules be broken.
The lease agreement provides renters and landlords with a legally enforceable contract and it’s important that this document have the necessary elements to provide security to both renter and landlord. A good lease agreement protects your interests and prevents misunderstandings that could potentially lead to litigation.
10 Lease Agreement Terms You Have to Include
The following are the essential terms that should be in every lease agreement:
Parties to the lease – The parties involved, that is the landlord and the tenant should be included in the agreement, as both parties are bound to the agreement.
Description of the property – The lease agreement should have a description of the property to be rented and controlled by the lease agreement. It can be as simple as the address and apartment number but it must be identified or the agreement cannot be enforced.
Terms of rent – The terms related to the amount agreed, the day of the month rent is due, where the rent is to be sent, and how it will be accepted (by check, by automatic draft, etc.) should be included in the agreement. The terms for late rent should also be in this portion of the agreement. For Example: "post property for rent"
Lease dates and termination – The lease agreement should include both the start and end of the lease, as well as the details of how and when the landlord and tenant can end the lease. For example, terms like, an apartment lease can be terminated with one month’s notice and a final month’s rent.
Security deposit details – The amount of the security deposit should be included in the agreement, the details of how it is to be paid, and the terms of its future release should be clarified in the lease agreement.
Occupants of the property – The lease agreement should also list the names of every person who will regularly occupy the property and what happens if a person stays for more than a certain length of time.
Pet details – the lease agreement should clearly specify whether or not a tenant is allowed to have a pet. If yes, then details like, the limitations on number, size, and species should be listed in the agreement. If there is an additional deposit required for a pet, that amount and the details thereafter should be included in the lease agreement.
Repairs and damages- the condition of the property should be noted as well as the tenant’s and landlord’s responsibilities for repairs and problems with the property. The lease agreement should also describe whether the landlord or tenant is responsible for damages to the property.
Alterations to the property – the lease agreement should describe whether a tenant is allowed to make alterations to the property, and the details regarding if he is allowed.
Right of entry – the lease should include a clause that allows the landlord to enter and inspect the property with reasonable notice. The terms should define reasonable notice and explain the rights of the tenant.
In addition to the essential terms above, see the following optional terms that may apply to your property.
Some Optional Terms You May Want to Add:
Depending on your property, the following lease agreement terms may be useful to include in your lease agreement:
Right to renew the lease – the agreement should include if the tenant has the right to renew the lease at the end of the agreement. Ideally, a new lease agreement will be signed each time a tenant change.
Right to sublet the space – if the tenant has the right to sublet the property to another person, the lease agreement should include those terms.
Parking restrictions/rules – if the property has a parking or not, or offers parking in a designated spot, those terms should be listed in the lease agreement.
Possessions – if certain possessions, like water beds or grills are not allowed on the property, those terms should be listed – along with the consequences, if those items cause damage to the property.
Property rules – if the property is a multi-unit, the landlord may specify rules that govern behavior on the property such as avoiding loud noises after 10 p.m. or not doing vehicle repairs in the parking lot, etc.
While many essential and optional lease terms are included in pre-printed, standardized lease forms, those terms may or may not fit your needs as a property owner. It’s important to note, however, that standardized agreements don’t always fit the situation and they may or may not be customized to meet your state and local requirements. When you have questions or want to customize a lease agreement, working with a qualified real estate lawyer is the best way to get the best lease agreement – one you and your tenants can live with comfortably.