Renting out your home as a source of extra income or to pay off your home loan is gaining popularity. Also, home owners who live out of town usually rent out their homes to utilize the space. Now, in case you have someone trustworthy like a family member or a friend to take care of such things, then nothing like it. But mostly people rely on real estate agents to take care of the property and execute any paper work involved.
Now even if you have a professional real estate agent taking care of these things, it is better to have an understanding of what makes a good rental agreement. Listed below are few of the key points.
Stamp Duty and Registration- Stamp duty is the tax you pay to the government to make your rental agreement legally valid, so it is imperative that you are aware of how much the stamp duty is and pay it, also make sure to pay registration fee as an unregistered document is not going to work as evidence in case of a dispute.
Important Terms and Clauses- Make sure to include all important terms and clauses in the agreement which include the tenancy term, names of occupants, security deposit, discipline and maintenance . Mentioning these terms clearly in the agreement insulates you against financial loss.
Lease Agreement- a lease agreement is different to a rental fundamentally due to the time period, rentals are usually drawn up for 11 months whereas lease agreements are usually for 3 to five years. Consequently the stamp duty and registration fees also vary in lease agreements depending on the tenure. Hence it is essential that you understand the legalities of the contract.
A good rental agreement is one in which both the tenant and landlord are satisfied. Hence, the responsibility to create a fair, clear and concise agreement rests with you.