What Clauses Should Tenants Always Check Before Signing a Rent Agreement?

Before signing a rental agreement, tenants should always review the terms related to the rent amount and escalation, security deposit, lock-in time, maintenance, notice period, and termination conditions. These conditions have a direct impact on your monthly costs, flexibility, and legal protection throughout the tenancy. I have shared important clauses tenant must verify before signing a rental agreement below.

What Clauses Tenants Always Check Before Signing a Rent Agreement?

• Rent, Escalation, Rent Hike Percentage, and Payment Terms

Your rent isn't the only payment you make every month. Determine whether the rent includes or excludes the association's maintenance expenses. Check the monthly rent, due date, method of payment, and any rent escalation clauses.

In India, agreements frequently include a 5% to 10% annual (usually 11-month) increase in rental amount. This is negotiable and subject to the landlord and tenant reaching an agreement. So, you must ensure it's well-defined and not discretionary. Confirm penalty for late payments.

• Deductions from your Security Deposit

The security deposit is a significant negotiable amount given upfront by the tenant to the landlord before moving into the rented property. It is given to safeguard the landlord's interest in the case of property damage or non-payment of rent, with the remaining returned at the conclusion of the tenancy. 

Verify the deposit amount (usually 2 to 10 months' rent, depending on the city). You should absolutely refuse to accept any condition that compels you to pay for damages caused by regular wear and tear, or that requires you to pay the broker service fee again when you leave the property.

• Security Deposit Refund Time

The rental agreement should include a clearly defined schedule for when the Landlord should repay the final amount of the Security Deposit to the tenant, as well as consequences for failure of this clause.

• Lock-in Period and Notice Clause

Check the lock-in period and the consequences of leaving early. Both the landlord and the renter should preferably agree on a fair notice period, which is usually one to two months.

• Owner's Entry Rights

Check if the landlord is required to give notice before entering the property.

1. Maintenance and Repair Responsibilities

Make it clear who is responsible for paying for small repairs, large structural problems, appliance maintenance, and community maintenance fees.

• Use of Property and Restrictions

Check for provisions related to commercial usage, subletting, visitors, pets, and modifications (such as painting, drilling, and fixtures). Limitations should fit your way of living.

• Termination Clauses

Check the criteria under which the landlord may terminate the agreement, such as nonpayment, personal usage, or property sale. Ensure that sufficient notice is required.

• Inventory and Handover Condition

Demand a thorough inventory list with condition notes if the space is furnished or semi-furnished. When you move out, this safeguards your deposit.

You can avoid future financial hardship, stress, and legal issues by carefully going over these sections in the rent agreement. Hope you understand what are the most important clauses are that one needs to verify before signing a rent agreement.