To Let or Not To Let

By Jaspreet Punian

With soaring property prices and an increasing demand of accommodation it is becoming all the more difficult to find the perfect place to stay. An ever escalating cost of living coupled with stagnant wages makes it impossible to save the money needed for a down-payment, compelling you to rent a place instead. You may own a house in a certain city, but the need to move to another for your job, education or better living standards forces you to stay in a rented accommodation, since you cannot keep selling and buying as you shift from one city to another. This has raised the demand of rental houses in every town and city of the world. Thus, before you start scouting for a suitable house or flat to rent, give as much consideration to your requirements as you would before buying one. Renting a house can be quite troublesome. To make the task easy and manageable for you, given below are a number things that the tenants and the landlords must keep in mind before entering into an agreement.


The verification of these documents and house credentials is critical.

• Title documents – Proof that the actual owner of the place is the person renting out the premises.
• Share certificates – Share certificates need to be verified if the place is part of a co-operative society or colony.
• Electricity bills – Generally in the owner’s name.
• No-objection certificate – This is a certificate that specifies conditions for rent/lease; some do not allow bachelors and others may have some other conditions defined in the document.

Rental Agreement

The lease agreement needs to be worked very carefully keeping various aspects in mind. The major 3 are the licence period, the consistency of the license fee through the entire license period, clarity on costs associated with the house such as municipal taxes, society fees and charges etc. Ordinarily the owner is expected to bear such costs.

The clause regarding any deposits given prior to renting the house should be clearly defined and the terms of refund when the lease is terminated, should be stated. This includes any deposits towards electricity bills, telephone bills etc. Clauses defining what happens if this expectation is not met also need to be mentioned. Usually security deposits that are not refunded within seven days of the expiry of the lease are liable to be refunded with interest for each day’s delay. You should ensure that the landlord does not retain funds from the deposit for supposed damage to the premises.

Other Aspects You Need To Ensure
Signature in the Lease Agreement

For the agreement to be valid, ensure that either the owner or a person who is the authorized signatory for the owner signs the agreement

Accounting for Furnishing

The lease agreement should include all fixtures and furnishings with a cost estimate of the same also specified.

Plumbing Check

Plumbing should be carefully scrutinized. There should not be any malfunctioning or leakages and maintenance costs for the same should be included in the deal. These issues should be discussed upfront before the agreement is made out.

Term and Renewal

11 months is the usual term of the lease agreement with a notice of 2-3 months for either party to terminate the agreement. Notice clause is a must. Based on mutual consent the lease can be renewed every 11 months.

Other Details to Keep in Mind

• There should be a clause that allows you to retain possession of the house till the time the landlord clears all the dues, including deposit refunds.
• You should be well protected from clauses that mention a breach of contract.
• When a sale, mortgage or transfer of the concerned property takes place, the tenant should be well protected. Here the notice period will help you make alternate arrangements.
• Verify the availability of other amenities like car parking, gym, general maintenance etc.
• Lastly, take care of the property as if it were your own to ensure an amiable relationship with your landlord.

Landlords-What you should know before giving your house on lease

Advertising the House

The first step is to advertise to rent out the house. However, the best option is to hire a real estate broker as this will save you time and effort.

Computing the rent
Estimate the rental value of the place based on market value with some leeway for negotiation for the person willing to rent the place. You should see if the rent that you are going to ask for covers the cost of running and maintaining the house and after paying this, a profitable amount is left for your own disposal.

Police Clearance Certificate

Ensure that you do a thorough background check of the person, to whom you are renting out your place. Ask them to get a police clearance certificate, before renting out the place.

Drafting the Lease Agreement

This document includes details such as the tenancy period, maintenance cost and monthly rental, deposit amount that is refundable if all conditions are fulfilled when the tenant vacates the property and payment for damage to the house or furniture. This agreement needs to be signed by both the parties.

Traditional culture in India has been such that deep down in our hearts everyone still wants to own their own house. Owning a house renders a sense of security that a rented house cannot provide; but with the prevailing economic conditions of inflation and economic downturn, it has become exceedingly difficult for many to fulfil that aspiration. So, renting a house seems to be the only other option.

An ideal amount of rent that one should pay should be no more than 30 percent of your net monthly income.

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