Important Clauses for a Rent Agreement

  • Important Clauses for a Rent Agreement

    Date : 21-03-2018 15:41

    One way of supplementing your income is to give out already owned property on rent. However, this is an arrangement that should be entered into carefully, given the tenancy laws in India.

    First off, if the property is being given for a period of 11 months or less it makes sense to enter into a leave and license instead. If the time of the agreement is longer than that, then one needs a well drafted rental agreement to ensure that one’s interests are protected. Please note that the agreement has to be registered mandatorily.

    Here are a few things one must have in a rental agreement to protect the Landlord’s interests.

    Term and Rent

    This is the first and most important part of the document. This clause details how long the tenant has the permission to stay and what he must pay for the privilege. Have a lock-in period, so that there is a firm commitment from the Tenant’s side. One should also ensure that there is an escalation of rent amounts for each year. Also, state the penalty and interest rates in the event the Tenant fails to make payment on time. Have a cut off period, i.e. if the Tenant fails to make payments for say 3 months at a time, then the Landlord has the right to evict him.

    Security Deposit

    This is to provide for monetary security in case the Tenant defaults or causes damage to the property. Make sure to mention whether it is refundable or no and if refundable, within what time frame.


    The Landlord must have this so that he is not held liable in the event the tenant indulges in illegal or criminal activities. In addition, if the tenant is in default of the agreement, this clause entitles the Landlord to start the eviction process and gives him stronger ground for the same.

    Any charges for maintenance or other expenses

    Make it clear in the agreement, what charges each party is responsible for. While the Landlord must pay the property taxes, the tenant can pay for maintenance and for repairs. This is over and above the rent amount.

    Amenities and Fixtures

    This must be mentioned! That way there is a way to crosscheck what was handed to the tenant at the time the agreement started and what he is returning after the expiry or termination of the agreement.


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