A lease and rent agreement have one thing in common: it involves letting an individual/family reside in the rented/leased property for a certain period. However, the similarities end there. A house rent agreement allows the tenant to reside in a rented property, usually for 11 months, during which that person could be evicted or leave on his own. Well, a house lease agreement differs with its own set of rules and conditions agreed by both parties. We shall be exploring the whats, wheres, whens, hows, and whys of a house lease agreement and understand when to go for it.
What’s a House Lease Agreement?
A house lease agreement acts as a more formal and contractual agreement that transfers the property’s ownership conditionally to the tenant for a fixed period – it could be months, years, or even decades. The payment structure generally designed in this agreement would likely resemble a fixed amount to be paid within the period mentioned. The tenant can also be granted permission to modify the property to his needs, however, they shall also be held responsible for the property’s condition during the lease period.
Why You Need a Solid Lease in Writing
There are two types of lease agreements: verbal and written, which are legal. However, a verbal lease agreement comes with more downfalls than benefits, as discrepancies regarding the agreement tend to arise between both parties. Such situations are harder to solve with limited to almost no proof, which further complicates the case. In contrast, a well-written house lease agreement deletes many doubts and erases almost any chance of property-related disputes ever occurring, as both parties are bound to the agreement. Both sides need to know what goes into a well-written house lease agreement, which shall be discussed below:
What Goes Into Your House Lease Agreement:
Generating a house lease agreement is, honestly, a simple task with one tricky tough spot: getting it in sync with the laws of the state/country. The additional problem of jargon of words infused in it can cause anxiety among a majority of the public, as they appear to be complicated. We shall divide and simplify the contents that go into a house lease agreement:
Who’s Signing and Who’s Renting:
This section involves both parties (the owner/lessor and the tenant/lessee) signing the house lease agreement, with the tenant renting out the property for the period of time mentioned in the agreement.
Describing Your Place
The landlord needs to accurately describe the property and its features to avoid potential cases that can fall under fraud. It should also include non-fixed assets in the property like a fridge, furniture, and even a TV, describing their current condition.
Setting Your Lease Term
The inclusion of a proper lease term is necessary, which should mention its duration and notice period for tenants. There should also be a clause detailing how the agreement renewal can occur if the tenant decides to extend their stay.
Rent and How to Pay
The time frame for paying the rent must be clearly outlined without hiding any additional info. It should include any increase in rental payments as well as when the new notice period can be established.
Security Deposits
Along with mentioning the mode and timings of rental payment, any security deposit needs to be detailed along with any extra fees or costs.
House Rules
The owner needs to mention any rules to be followed by the tenant, as they are meant to ensure the safety, security, and well-being of tenants and other neighbours. It also helps prevent potential ruckus from occurring due to misunderstandings between the tenant and others.
Who’s Responsible for What
This section should clearly outline both sides’ responsibilities to ensure a hassle-free experience during the contract’s tenure. Depending on the agreement, both parties must oblige to the responsibilities given to them.
Utilities and Services
Landlords are generally responsible for ensuring the availability and working of essential utilities such as water, heating, and electricity. However, the tenant shall be paying the upcoming bills that come with these utilities, as they are the residents.
Renewals and Termination
Ways to renew the house lease agreement need to be mentioned in case the tenant wants to extend their stay. However, when terminating a tenant due to reasons mentioned in the agreement or a breach in it, the owner generally provides a 30-day notice period.
Making Sure Your Rights Are Covered:
Both sides need to ensure their rights are properly mentioned in the lease agreement, as it would prevent misusing of the property for reasons other than the one mentioned in the agreement.
Tenant Rights
A lease agreement restricts the landlord from evicting the tenant if the pre-defined period is yet to end. In addition, there is usually no annual rent increment, which allows expenses to remain the same for the occupier.
Landlord’s Rights
If the tenant is found to be breaking the rules of the rental lease agreement, by utilizing it for commercial purposes or allowing others to reside for an extended period, then they may be evicted. In addition, the tenants are to leave the property in good condition, for which they have to follow the agreement and repair what they are supposed to.
Understanding Fair Housing Laws
This needs to be kept in mind by both sides, as discrimination based on skin color, race, and religion is prohibited and should not be implemented during the renting, selling, or financing of real property. In addition, unwanted rules based on these factors cannot be imposed.
Dealing with Evictions
If the tenant has paid all bills on time and fulfills the requirements of the house lease agreement, they can promptly refuse to evict and it is also backed up by the government. If the harassment goes on, they can even file a police complaint and press charges.
Extra Bits and Pieces
Navigating Pet Policies
Pet Policies vary widely in each area. Certain breeds of various sizes are restricted for reasons such as perceived aggression or even potential property damage concerns. Navigating through it can ensure everyone’s safety while bringing the best out of it.
Subleasing Rules
Subleasing involves the existing tenant renting out property to a third party with the timeframe being within the existing lease contract. Even if permitted, the original tenant is still obligated to follow the requirements of the lease agreement, like paying the rent every month.
Sorting Out Insurance
A well-written residential lease agreement helps both the landlord and tenant obtain the ideal insurance to avoid coverage gaps, under-insurance, and even the transfer of unfair risk to an insurer due to one party’s exercise of their contractual lease rights.
Resolving Disputes
This section remains mostly hidden and unthought of until a sudden conflict pops out of nowhere. A solution to resolving a dispute legally would be to mention methods such as mediation and arbitration in the clause.
Top Tips for Making Your Lease Work for You
Get Legal Advice
If you are someone new to the world of leasing out property or searching for property to reside in, get in touch with a company that deals with real estate and its factors, like Jones Asset Management. These companies have teams of well-experienced members whose expert insight can provide benefits and avoid potential trouble.
Make Sure Terms Are Crystal Clear
Never agree on a deal unless both parties are clear and their terms and conditions sync, and both parties need to mutually agree before initiating a house lease agreement.
Fair Negotiations
A way to ensure fair negotiation is for both sides to be completely honest with each other regarding their needs. This way, they can agree on common grounds and ensure a fair lease agreement is being curated.
Always Review Before Signing
This prevents future mishaps or conflicts between both sides from occurring, as there are chances of the agreement being manipulated in favour of one side.
FAQs
What is the stamp duty for the lease agreement in Karnataka?
The formula to calculate stamp duty is as follows: An agreement of 10 years: 1% of annual rent and an agreement of 10 to 20 years: 2% of annual rent.
Is it mandatory to register a lease agreement in Karnataka?
It is mandatory to register a lease agreement in Karnataka when the duration exceeds an 11-month term. Lease agreements under 11 months may or may not be officially registered.
What is the lock-in period in a lease agreement?
Lock-in periods are for specific periods when both parties are dedicated to the agreement, and neither side can serve notice during the period.
