Drafting Residential Rental Agreement

July 14, 2023
DD Planet

After you’ve found a tenant for your residential property, you need to draft a rental agreement and finalise it with your prospective tenant for a formal legal association between the two of you.

Here are the tips and advice to help you draft your rental agreement:

1. The title and the details of the property shall be mentioned clearly along with the duration of the rental contract, i.e., from which-to-which date it is valid. The owner should indicate that he or she is the legal owner of the said property and has full rights on it.
2. Name, address and the other details of the tenant and the owner of the property should be properly indicated. It should match the details given in the ID document such as aadhaar card, PAN card or similar. If there are more than one tenant or owner of the property, the details of all should be given.
3. The rent details and the security deposit amount (normally equal to two months’ rent) should be clearly mentioned in the agreement. Also, clearly write about the last date of payment, the mode of payment and security deposit refund clause that it would be returned at the time of vacating the property peacefully after adjusting dues, if any.
4. Clearly mention who would be responsible for major and minor repairs. As a general practice, all major repairs except damages caused due to negligence are covered by the owner and all minor repairs by the tenant.
5. Mention about the electricity and water charges that are normally separately paid by the tenant.
6. Mention about who would pay the maintenance charges and government taxes, if any.
7. The purpose of tenancy has to be for residential only and it needs to be clearly indicated in the contract.
8. Rental renewal conditions should be defined properly.
9. The jurisdiction under which disputes should be settled should generally be the place where the property is located.
10. Penalty clause if the property is not vacated on time should be there in the contract. Also, mention that the expenses occurring due to damages caused to property other than normal wear and tear will be borne by the tenant.
11. Write about the notice period (generally one month) for premature termination of the contract.
12. Attach an annexure mentioning all the fittings and fixtures in the property that are provided by the owner and are required to be maintained by the tenant.
13. Specify the availability of facilities along with the property such as car parking.
14. If there are special conditions that are agreed between the owner and the tenant such as not allowing pets in the property or a lock-in period during which the contract cannot be terminated should also be specified in the contract.
15. The rental agreement has to be registered properly if the lease is for more than eleven months. Bear this in mind while finalising the duration of tenancy in the document. If registered, specify who would bear the cost of registration.
16. The whole agreement should be discussed thoroughly between the two parties and signed on every page by both.

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