As a home owner, if you’re giving your house out on rent, you know the importance of a rental agreement. These rental agreements are made to protect your rights as a landlord and your tenant’s rights as well. But, in order for them to be legally binding and protect your interest, there are few mistakes that you have to avoid at all costs they are-

1-    The Name

Always cross check and double check the name that the tenant gives you, check it against a legal document like Drivers Licence, PAN or Passport. Make sure that you don’t fill in their pet name, shortened name or misspell their name in the Rental Agreement. NOT matching a name to their identification cards, will allow them room to claim that the people mentioned in the Rental Agreement, you won’t have proof to show that they are wrong!

2-    Leaving Out the Terms for Evection

You need to mention very clearly what is allowed in your home and what could lead to evection. For e.g. not complying with the rules of the building society, not paying rent for more than 2 months consecutively, conducting illegal activities in the apartment etc. Along with the terms for evection, you also need to mention the notice period you will give them to leave.

3-    Not Talking About Lock in And Termination

Lock in clause is basically a minimum specified period that the tenant should stay in your rented house, he/she can’t leave or terminate the agreement before the lock-in period is over. This could be anywhere from 1 to 6 months. There should also be a notice period that the tenant gives you before they decide to terminate the Rental Agreement and vacate your home. This is done so that you can use this time to find a replacement tenant so that you don’t lose out on rental income.

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4-    Not Being Specific About Payments

You need to mention what the rent amount when it has to be paid by, what the rent covers, who pays maintenance, grace period allowed, how the rent should be paid i.e cash, cheque, online methods etc. When you’re talking about payments, also mention if there is a penalty for late or delayed rent.

5-   Not Being Clear About Repairs

It’s important that you mention who is in charge of repairs when the tenants are staying in your home. You need to classify what you consider minor repairs and major repairs and who will pay for them.

6-    Not Mentioning Subletting

Another important clause to add is that of subletting if you don’t add this in, you’re leaving yourself open to tenants subletting your property and making a profit on your property. This could also mean damages, etc. that you will have no control over.

Apart from these common mistakes, there are also mistakes that you that can be easily avoided such as –

  • POA details
    When the owner is not around, they have a person who can legally represent them. This person has been granted POA or Power of Attorney by the owner. When you are making a Rental Agreement and the owner is not around, you still need to add his details as well as that of the POA. If this key bit of information is missing your rental agreement would be considered as invalid.
    This is a common mistake that people make if you don’t have these details you might end up redoing the whole rental agreement and wasting a lot of time and money.
  • Not adding miscellaneous clauses
    A miscellaneous clause is something that is unique to your case or something that you wish to have as an owner/tenant. This can be different from person to person and case to case, an example could be – If a Licensee vacates the house within 3 months then the notice period will be for 2 months. After the completion of 3 months of stay, the notice period will be reduced to 1 month.
    These clauses can help you as an owner to protect you as an owner from problems that might arise with tenants. You might need a minimum of 2 months to find a tenant, then you must add this as the minimum notice period. You might require the tenant to paint the house, pay maintenance directly etc. These are the clauses that can be added in this clause.
  • Not Mentioning the Rent Amount
    At times as an owner you might take it for granted that the rent amount is known to both parties, even though this is the case, it is a MUST to mention it in the Rental Agreement. The number of times a rental increment will happen, the percentage of increment and the reasons for increment also need to be mentioned.
    This is to avoid problems with tenants who feel that an increment is unfair or comes as a surprise. If this is mentioned, and the agreement is signed, the tenant will not be able to deny.
  • Permanent Address details
    The permanent address of the landlord and tenant must be mentioned in the Rental Agreement. It doesn’t matter if either party are from different states/countries, this is a must to be mentioned.
    This is important as part of the background verification of the tenant. The permanent address is also needed if you need to contact either party in the case of an emergency.
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If making a Rental Agreement still seems too confusing, don’t stress, let the professionals at NoBroker help you. You can also check out our full range of services here. Do leave us a comment with what else you think is a common mistake landlord’s make with Rental Agreements.

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