What is a Rent / Lease Agreement:-
An agreement by which owner of an immovable property / a person duly authorized by the owner or a competent person enters into a contract with another person for possession, enjoyment and use of the demised property for a specified period and purpose against valid consideration is called “Rent or Lease Agreement”. The owner of the property is called “Lessor” and the person acquiring the right to enjoy/ use the property is called “Lessee”.
Parts of Rent / Lease Agreement:-
Cosideration:- Rent payable including premium (if any) is mentioned in this part.
Operative part:- It should show clearly the lessor divesting himself of possession and lessee coming into possession.
Habendum:- The nature of the lease, commencement and duration of the term are specified here.
Reddundum:- The mode of payment of consideration including time, place and instalments of payment are mentioned in this part.
Covenants:- Terms and conditions governing the lease such as purpose, payment of taxes, repairs, insurance, subletting etc are mentioned in this part.
Normal Lease agreement must contain the following clauses covering the aforesaid parts
Proper identification of the parties to the contract.
Clear title of the Lessor:- The lessor must be the legal owner of the property or a person duly authorized by him or a person authorized by court to enter into such contract.
Proper identification, area and demarcation of the property to be rented / leased.
Tenure of the lease:- The duration / period of the lease must be clearly mentioned with or without a provision for further renewal of the same. On expiry of the said period the lease stands determined until and unless it is renewed further.
Purpose of the lease:- Whether the property will be used for residential, commercial or charitable purpose. Use of the property for any purpose other than as mentioned in the agreement, makes the agreement void and liable to be cancelled and compensation.
Security deposit or Advance Rent:- The agreement must specify any security deposit or advance rent payable by the lessee, time and mode of refund of the deposit or adjustment of the advance rent. Normally deposits are interest free, in case it is agreed otherwise, the rate of interest and mode of payment thereof should be mentioned in the agreement.
Other charges:- Any other charge(s) such as for maintenance, security, electricity, water, gas etc or for any other facility, payable by the tenant / lessee, must be specifically mentioned in the agreement to spare both the parties of fist of fury and heartburn later on.
Access to common / ancillary facilities:-
The agreement must specify the availability or otherwise, of the other facilities such as use of common passage, roof, park, swimming pool, car parking, library, club, gymnasium etc. besides the demised and demarcated property, and charges payable (if any) for such facilities.
Furnished flats:- In case of furnished flats the agreement must contain the complete list of furniture / appliances / gadgets etc with respective specifications. Quantum of compensation for loss or damage to such furniture / appliances / gadgets must be provided for in the agreement to avoid subsequent arm twisting by either party.
Maintenance of the lease property:- Normally this requirement arises when the property is leased for a very long period. In such cases the onus of repairing/maintenance of the property must be clearly spelt out. The agreement must also contain, in such cases, liability of the defaulting party to compensate the other party, for the losses and damages.
Determination of Lease:- It may occur in any of the following ways and must be reflected in the agreement.
(A) By efflux of time:- On expiry of the lease term.
(B) By notice:- After expiry of the notice period served by the either party.
(C) By express or implied surrender by the lessee.
(D) By Forfeiture:- By violation of the terms and conditions, by purchase of the property by the lessee, when lessee becomes incapable of entering into contract.
An agreement by which owner of an immovable property / a person duly authorized by the owner or a competent person enters into a contract with another person for possession, enjoyment and use of the demised property for a specified period and purpose against valid consideration is called “Rent or Lease Agreement”. The owner of the property is called “Lessor” and the person acquiring the right to enjoy/ use the property is called “Lessee”.
Parts of Rent / Lease Agreement:-
Cosideration:- Rent payable including premium (if any) is mentioned in this part.
Operative part:- It should show clearly the lessor divesting himself of possession and lessee coming into possession.
Habendum:- The nature of the lease, commencement and duration of the term are specified here.
Reddundum:- The mode of payment of consideration including time, place and instalments of payment are mentioned in this part.
Covenants:- Terms and conditions governing the lease such as purpose, payment of taxes, repairs, insurance, subletting etc are mentioned in this part.
Normal Lease agreement must contain the following clauses covering the aforesaid parts
Proper identification of the parties to the contract.
Clear title of the Lessor:- The lessor must be the legal owner of the property or a person duly authorized by him or a person authorized by court to enter into such contract.
Proper identification, area and demarcation of the property to be rented / leased.
Tenure of the lease:- The duration / period of the lease must be clearly mentioned with or without a provision for further renewal of the same. On expiry of the said period the lease stands determined until and unless it is renewed further.
Purpose of the lease:- Whether the property will be used for residential, commercial or charitable purpose. Use of the property for any purpose other than as mentioned in the agreement, makes the agreement void and liable to be cancelled and compensation.
Security deposit or Advance Rent:- The agreement must specify any security deposit or advance rent payable by the lessee, time and mode of refund of the deposit or adjustment of the advance rent. Normally deposits are interest free, in case it is agreed otherwise, the rate of interest and mode of payment thereof should be mentioned in the agreement.
Other charges:- Any other charge(s) such as for maintenance, security, electricity, water, gas etc or for any other facility, payable by the tenant / lessee, must be specifically mentioned in the agreement to spare both the parties of fist of fury and heartburn later on.
Access to common / ancillary facilities:-
The agreement must specify the availability or otherwise, of the other facilities such as use of common passage, roof, park, swimming pool, car parking, library, club, gymnasium etc. besides the demised and demarcated property, and charges payable (if any) for such facilities.
Furnished flats:- In case of furnished flats the agreement must contain the complete list of furniture / appliances / gadgets etc with respective specifications. Quantum of compensation for loss or damage to such furniture / appliances / gadgets must be provided for in the agreement to avoid subsequent arm twisting by either party.
Maintenance of the lease property:- Normally this requirement arises when the property is leased for a very long period. In such cases the onus of repairing/maintenance of the property must be clearly spelt out. The agreement must also contain, in such cases, liability of the defaulting party to compensate the other party, for the losses and damages.
Determination of Lease:- It may occur in any of the following ways and must be reflected in the agreement.
(A) By efflux of time:- On expiry of the lease term.
(B) By notice:- After expiry of the notice period served by the either party.
(C) By express or implied surrender by the lessee.
(D) By Forfeiture:- By violation of the terms and conditions, by purchase of the property by the lessee, when lessee becomes incapable of entering into contract.
While dealing with Rent / Lease contract in either capacity (as a Landlord and Tenant OR Lessor and Lessee) one must avail the services of competent professional lawyers as it involves the legal provisions of the Contract Act and Transfer of Property Act. The process is interspersed with the duties and responsibilities / rights and obligations of both the parties involved in it. The process also involves the preparation and execution of a legal document called “Rent / Lease agreement”
