Confused About Tenancy Agreement? Few Things Explained!

Jun 18, 2011     Posted under: Investment

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Renting a house will not necessary lead to litigation if a few simple things are kept in mind beforehand

Maximum litigations between landlords and tenant center on the issue of amount of rent payable for the rented premises. With regards to the litigations cases floating around these issues Supreme Court issued a guideline for healthy negotiations between the parties to reduce litigations at all levels. Here are some guidelines:

  • The rent fixed should be just and adequate, keeping in mind factors like location, accessibility, type of construction, parking facilities of the property, etc. To ascertain the proper rent payable, parties shall also be at liberty to avail services of an official evaluator or any other agency having expertise in the matter
  • If the rent of leased premises is too low in comparison to market rent (fixed almost 20-25 years ago), then the present market rate should be worked out either on the basis of a valuation report or reliable estimates of rentals of property in surrounding areas that have been leased recently.
  • The rent must be enhanced by at least 10% after every three years of the term of the lease, or enhanced according to the terms of the lease deed.
  • If the tenant is duly paying the prevalent market rent, as assessed and fixed between the parties, the landlord shall not be entitled to bring any action for eviction against the tenant for a period of at least five years. Thus, for that period the tenant shall enjoy immunity from being evicted subject to proper and timely payment of rent.
  • Any major structural repairs in the rented premises should only be carried out only after obtaining prior permission of the landlord in writing. Also, adjustment of the mount spent on such repairs shall have to be worked out between the parties.
  • Day-to-day maintenance of the premises shall be carried out by the tenant, and money spent by the tenant for such usual maintenance shall not be reimbursed by the landlord.

These guidelines will surely allow both the parties to negotiate and to come at mutual agreement which is fair to both the sides.

NitiN Kumar Jain

Nitin works in an IT MNC professionally but blogs and owns NKJ Live. He is also the co-owner of a professional start-up ARGHAM BYTES

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