Taking / Giving Property on Rent?  Our Advise----- Be Wise 

Tenants. Points to be considered:

·         near / around the property, public transport, neighborhood gentry, proximity to essential markets, schools, hospitals, etc.

·         Check the safety aspects, especially for working / single women. You could get the crime rate in the area on internet.

·         Find out the age of the property. If possible, speak to the previous tenants or the neighbour.

·         by him to the property owner. This agreement is ideally drafted before the tenant occupies that place. Necessary Inclusions of the rental agreement or the Lease Deed would be;

·         Include start and end date of the tenancy

·         Monthly Rent amount payable and the date of payment- should generally be 10^th of the month, especially for salaried persons, to avoid cheque bounce.

·         Security deposit amount to

·         Conditions of termination of Agreement.

·         Notice period for vacating the house.

·         Provisions of electricity, water and power facility & their payment procedure.

 

Property Owner / Landlord. Rented Property generates additional income by way of lease or rent. But if leased to a wrong person, could cause numerous problems. It requires substantial care and a lot of aspects have to be kept in mind while selecting the right paying guests (PG) or purchasers on rent (rent party):

·         Must check financial capability and background of the prospective tenant (Second party). (Too good offers are dangerous. If the going rental is Rs X and you get offer of Rs 2X, reject it)

·         Police verification of the prospective tenant is a must. This process helps in background check of the tenant. Not doing this is a punishable offence under Section 188 of the Indian Penal Code.

·         Take the permanent address proof of the prospective tenant.

·         Take the bank statement of the bank from which the payment cheques are made.

·         Meet the tenants one on one, interact with them and get to know them. Don’t leave it on the broker – his sole interest is Brokerage.

·         Services of Registered Brokers only must be used. If he charges service tax, (currently 14%), he should deposit the challan & give details of it to you.

·         It is imperative for the landowner to ask the appointed broker to provide the agency registration number, valid signature and agency seal/ stamp on every page of the 'Lease and License' accord so that the broker can be held accountable to look after any legal disputes in future.

·         If possible, rent your property to Tenants with families. If renting to Bachelors, obtain “Comfort Letter” from the Employer of the prospective tenant & do a call check with the Company’s HR / Admin.

·         Lease Deed/ Rental Agreement - A rent agreement or a lease deed is a legal document that contains the details of the rights of a tenant to occupy certain property for a fixed period of time in return of the rent paid by him to the property owner. This agreement must be drafted before the tenant occupies the place. Necessary Inclusions of the rental agreement or the Lease Deed would be;

·         If the period of time is 12 months or less, registration is not compulsory. If more than 12 months, you are legally bound to register which costs a minuscule amount (nearly 1% of the total rent value, depending on the local laws), making it a very authentic legal document.

·         Clear mention of Dates; to and from.

·         Notice period required from both sides; owner and tenant.

·         Rental value and the security deposit made by the tenant and any advance payments done.

·         The annual rent is generally 2-3% of the capital value and differs according to the location and amenities provided. 

·         Date of monthly rent payment (usually around 10^th of each month, especially for salaried tenants).

·         Annual increase in Rent Clause.

·         Mode of payment; ECS mandate or Post dated cheques. AVOID CASH TRANSACTIONS.

·         Clear mention of the size of the property and the number of rooms, bathrooms, kitchen, etc.

Wishing you a Happy Letting out/in of your homes. You may make lifelong friends with your Tenants / Landlord. Happy Safe homes are very important.

 

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