A rental agreement is an agreement or contract between the owner and the occupant who takes temporary possession of anything that the owner has rented. The rental agreement could be regarding anything. It could be real estate, cars, personal possessions such as musical instruments, clothing or items like skates or shoes books, CDs, DVDs or devices or equipment for digging.
A rental agreement is a monthly agreement. Typically, it is a tenancy of a short period, which is usually 11 months. The landlord will charge these monthly rents and the tenant will pay it according to the terms of the agreement.
Advantages of Rental Agreement
- Covering unanticipated expenses: A rental agreement is an agreement that helps both the landlord and the tenant by covering unexpected expenses.
- Good Relations: Through rental agreement, there develops a good relation between the landlord and the tenant as the rights and obligations are streamlined and precisely defined.
- Provides legal protection: a legal document is always needed if the value of the asset involved is high. Thus, a rental agreement acts as a legal protection in this case.
Procedure of Rental Agreement
- A well competent attorney from our team will contact you to clarify the overall process and acknowledge the need for a Rental Agreement.
- Once the purposes of the consulting agreement are apparent, the attorney shall draw up a sample Rental Agreement appropriately.
- The draft Rental Agreement shall be sent to you for analysis.
- The whole process takes between 3-4 working days.
Requirements of rental agreement
A rental agreement is made to secure the owner's and the recipient's rights so that both parties can obtain the appropriate profits or needs. In a land rental arrangement, one is the property owner and the other one having willingness to stay and pay the rent (an amount paid to the owner's agreed upon the contract in certain frequency and time period intervals). Here often the receiver is called tenant while the property owner is called the landlord.
Description of rental agreement
The rental agreement will have certain terms and conditions that are agreed upon by the parties together. For instance, if the bills for the facilities provided are included in the rent amount or it is to be paid by the tenant separately. Another dimension is the amount of property given. It could be a small space to a big room to a part of the apartment or the whole apartment or a floor or an entire building. The agreement will have a time period mentioned after which the rental agreement will be renewed and started again.
Typically, a rental agreement will include security deposits that the tenant is needed to submit to the landlord or landlady as security. This security deposit is given back to the tenant after the completion of the agreement. Also, sometimes the landlord retains some amount of deposit in order to cover the damages done by the tenant during their period of stay. This does not count, however, in the property's subtle or obvious wear and tear.
Terms and Conditions of Rental Agreement
The terms of rental agreement can be for few hours or months or years in a contract. It could be a place to celebrate a party or an open ground or a banquet hall or hotel room. People do sign a rental agreement while renting these spaces before taking the possession. The terms for bigger companies or businesses or homes are also rented for years in this case.
Rights of parties involved in Rental Agreement
For a Rental Agreement to be agreed by both of the parties, there are negotiations and rights (more rights to the property owner). Complete privacy in the rented area is an example of the rights of the tenant. The tenant has the right to stay and he cannot be replaces or removed unless any clause is broken or he failed to pay the rent on time. In fact, few countries have this rule where the property owner has to put the security deposit into a bank account and submit the respective interest on the amount to the tenant.
Rights of the property owner or landlord are that he can define the terms and conditions that are to be followed by the tenant regarding celebrating in the area, loud music or smoking in the rented area. He has the choice of allowing or disallowing pets. Same goes for renting out properties for businesses or office area or shops or marts, even storage of goods.
Rental agreement in India
All above rules and regulations are applicable in India except for the rule of interest over their security deposits. However, the revenue earned from renting out any goods/properties is taxable in India. The amount earned is considered as income, so it is taxable only if it’s reaching the taxable income amount which changes every year. The rule of taxation changes with privileges that change with age. For instance, senior citizens who are 60 and above have relaxation for paying taxes and super senior citizens who are over the age of 80 have the most relaxation.