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Rent Agreement Laws in India

25/05/2018 19:57:54 Rent Agreement
Rent Agreement Laws in India

In order to rent a property, a rental agreement is signed by the parties outlining the terms of the agreement. It thus becomes a legally binding contract between both the parties; landlord and the tenant, to abide by the contract and the follow the rights and responsibilities of them. The rent agreement must include the cost of the rent, amount of security deposit, date of depositing the rent, and other conditions of using the premises. In case of violation of the agreement, the aggrieved party shall apply for relief in civil court.

Rent Agreement laws in India are the state laws enact to govern the rental agreements in various aspects. These fall under the ambit of Rent Control Act. Each state has its own Rent Control Act. For instance, Rent Control Act (1999) Maharashtra, Rent Control Act (1958) Delhi, Tamil Nadu Buildings (Lease and Rent Control) Act (1960) Chennai govern the state's rent agreements. This means these are also referred to settle disputes between the landlords and the tenants in their respective states.

Rental laws in India provides tenants with the security and also landlords their ability to evict tenants. In general, the main features of rental laws existing in India are:

  • Various laws are imposed while one is planning to rent out a property for both commercial and residential use. Laws are imposed irrespective of the size of the property being rented to help potential tenants identify and secure good rental accommodation.

  • These laws govern the rental rates such that fair rents are being imposed within the standardized rental ranges that may vary from state to state. A landlord cannot charge its tenants beyond these rates.

  • These laws are also made with the intention to protect the tenants from unfair eviction by their landlords due to any kind of discrimination.

  • Laws also define landlord’s responsibilities and obligations towards its tenants. This includes the terms and conditions for maintenance of the property.

  • On the other hand, it also defines the rights of the landlords, that he may use in case a tenant does not fulfill their obligations for paying rent on time or misuse of property in any manner. This also means the landlord can object to the use of his property d=for reasons not specified in the agreement.

However, Rent Control Act cannot be applied to premises that have been let out to banks, public sector undertakings or any corporation established by or under any state or central act, foreign missions, multinational companies, and international agencies. For premises let out to private limited and public limited companies having a paid-up share capital of one crore rupees or more do not come under the ambit of Rent Control Acts.

In the monthly rent payable exceeds 3500 rupees, the rental agreement is subject to the Transfer of Property Act (TPA). It assigns the landlord with responsibilities including regarding disclosure of information regarding material defects in the property. The rental agreement regulations in India on landlord and tenants are archaic. The national government is encouraging local bodies to relax these laws in order to encourage investments in construction and housing.

A Rental Agreement document must include:

  • The amount of rent decided by the parties and mode of payment; cash, cheque or demand draft is usually used. Also, the document must include the duration for which the rent has to be paid. Paying guest, serviced apartments and other short-term accommodation require payment on the daily or weekly basis. While long terms payments are paid monthly.

  • Essential utilities and their connections such as; gas, electricity, phone, television, internet, and water must be included in the rental agreement. Also, include if the rates for the same are included in the rent or paid separately.

  • Sometimes a landlord may choose to add lifestyle restrictions. This is very common in South India where most rental accommodations restrict its tenants from the preparation of non-vegetarian food in the premises. Other restrictions, such as’ marital status, gender are also considered.

Rent agreement format must include some significant aspects:

  • The consistency of license fee to be paid in the entire period

  • Clarity of costs associated, such as; municipal taxes, society fees, and other charges.

  • Return of deposits when the lease is terminated.

  • Clauses defining what happens in case the expectation is not met.

In order to prepare a rent agreement, all the clauses must be studied deeply. In order to make a valid and a strong rent agreement, one can even refer to the sample lease agreements that are available online. As step by step instruction help to form an agreement protecting the interest of both the parties. The agreement so developed will prevent misunderstandings or disagreements in future. The landlord must provide a copy of rent agreement to each tenant who signs it. The tenant may even request a free replacement copy from the landlord.

Once the rental agreement is ready one can proceed with the registration of the same. The government has initiated the hassle-free e-registration process. Extremely convenient and easy Online rental agreement can be created and registered through government-approved doorstep service providers. Also, it is possible to make and register rental agreements online in few states of India, such as; Delhi and Mumbai. One may use a biometric finger scanner and register without going to the sub-registrar's office. However, required documents for rent agreement are pre-requisite for the same. One requires the Aadhar and Pan Card Number of the landlord, tenant, and two witnesses. When the agreement is registered, stamp duty and registration fees have to be paid that may vary from state to state.

Are you looking for Rent Agreement Registration  Service in India?

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Prashant Patil

I am renting a property for two months, still, I should take rent agreement??


Yes Mr Prashant, as per law you should take rental agreement for that period as well.