Things you should know before you rent a house5 min read . Updated: 25 Jun 2019, 10:27 PM IST
- Landlords can cause trouble if you are not aware of what your rights as a tenant are
- Repairs should be done with the mutual consent of both tenant and landlord. The landlord should bear the cost of construction and repairs
Moving to a new city can be daunting. Yet, for many Indian students and professionals, especially millenials, it is an inevitability. The first thing you need to arrange for once you move is accommodation. According to Economic Survey 2017-18, 28% of India’s city dwellers live in a rented house.
If you are looking to find a rental accommodation, you might encounter landlords who set their own terms and conditions, or are adamant about increasing the rent annually. To avoid being taken for a ride, you should be aware of your rights as a tenant. We list eight things that you should know before you move into a rental home.
Rent and increment
Rent is determined by various factors such as location, age of the property, quality of construction and amenities. “Rental values range between 2% and 4% of the property value. A certain premium is linked to the property value if the location is prime and in demand," said Ramesh Nair, chief executive officer and country head, JLL India, a real estate services firm.
The rate of increase in rent is to be decided by the landlord and the tenant, and the landlord can’t increase the rent in an unreasonable manner.
“Most states have created their own regulations to regulate local rent increase. For residential properties in most parts of India, landlords can only increase the rent by around 10-11% every year. If a dispute arises between a landlord and tenant, the Rent Control Act mandated by the government is followed," said Saurabh Garg, co-founder and chief business officer, Nobroker.com, an online real estate search portal.
However, the slump in real estate has affected rentals. Rental market trends also vary from city to city and locality to locality, which gives you room to negotiate the amount, instead of sticking to the rent agreement. The best way to go about it is to have a chat with your landlord and agree on a reasonable hike.
It is the landlord’s responsibility to ensure that basic amenities such as regular water supply and electricity are available. If the electricity or water supply is disconnected by the landlord, the tenant can file a police complaint or approach the court or rent controller. “If the apartment is under a housing society, and there is a dispute, tenants can also approach the residents’ welfare association for mediation," said Nair.
Except in cases of normal wear and tear, it is primarily the responsibility of the landlord to bear the cost of maintenance of the property and other related charges. However, many residential societies also collect maintenance fees. It is best to get clarity from the landlord in advance and be aware of the charges you’ll have to pay. “The payment of maintenance fees to the society depends on the contract between the landlord and the tenant. Generally these charges are factored into the rent or paid separately by the tenant," said Vijay Pal Dalmia, partner, Vaish Associates Advocates, a law firm.
Once the rent agreement is signed, the flat belongs to the tenant for the agreed tenure and the landlord cannot enter the flat without the consent of the tenant, even if it is at the behest of carrying repairs in the house. “Repairs should be done with the mutual consent of both tenant and landlord. If a person shares a good relationship with their landlord, he can coordinate and get the task done. The landlord should bear the cost of construction and related repairs," said Nair.
Most landlords in Indian cities ask for a security deposit. Sometimes the amount can be as high as six months to a year of rent. The deposit amount depends on local market practice and differs across cities. It also depends on the kind of property you are renting. If it is an unfurnished apartment, one month’s rent might be enough, but it might be higher for a furnished apartment. Landlords ask for a deposit to safeguard their interest if the tenant vacates the property without clearing utility bills or causes damages. You can bargain down this amount. Also ensure that the deposit amount is mentioned in the rent agreement. “In cases where local Rent Control Acts are applicable, there may be certain restrictions," said Dalmia. For instance, while the The Maharashtra Rent Control Act doesn’t explicitly state anything about the security deposit, the Delhi Rent Control Act limits the security deposit to one month’s rent.
While a tenant can be asked to vacate the premises if there is a violation of the rent agreement or other guidelines, the landlord must give prior notice and cite concrete reason for the eviction. These can include misuse or change in the nature of usage of the property, subletting the premises, non-payment of rent and other charges. “A notice of 15 days has to be given under the Transfer of Property Act for the termination of the tenancy. The rest will depend on the contract between the two parties," said Dalmia.
Say you are renting a home and the landlord decides to sell it. If you stay on as a tenant to the new owner, will you have to draft a new agreement? “In such a case, the tenancy will continue and the agreement will be deemed to have been assigned to the new landlord. The rent agreement will continue to hold and there is no need of any new agreement. The new landlord has to honour the terms of the agreement between the old landlord and the tenant," said Dalmia. If the new landlord wants the property vacated, he has to give the tenant prior notice.
The rent agreement is the most important document and has to be made watertight. “The tenant should ensure that terms like duration, termination and extension of the tenancy, amount of rent, security amount and inspection rights of the landlord are incorporated in the rent agreement," said Dalmia. Also make sure that the agreement is made on a stamp paper and duly registered with the local authority. This will ensure that it safeguards your interests in case of a dispute.