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What is a Rental Agreement?
To answer very simply and shortly about what is a rental agreement it is such that is a contract between a landlord and tenant whereby a landlord gives a tenant the right to occupy a residential or a commercial premise.
Does it sound too simple? Well, it is, but there is certainly law that is imbibed with the definition along with it there some repercussions if not dealt with it carefully. Indeed, it is the Rent Agreement that protects the interests of both the landlord and the tenant. It is a legal document, which is prepared by the landlord on the name of the tenant.
All the terms and conditions that are mentioned in the agreement are according to both the parties. In most of the Indian cities, rental agreement lasts for only 11 months to protect against rental control laws. There might be cases where you need to lock a property for more than a year therefore, in those cases an agreement with a longer term need to be registered.
Speaking in lawfully a rental agreement is a course of action signed mutually between two parties that is landowner and tenant, by the means of which the proprietor permits the occupant with the privilege in order to utilize a property that claimed by the proprietor for a predetermined time frame, in return for an occasional installment of rentals.
Thence, A kind of contract signed between the owner of a specific property and a renter who wants to have short-term possession for that property. Rental agreement is very much different from lease agreement, as lease agreement is more typically for a fixed term.
Rental agreement advantage
In a rental agreement all the needful terms and conditions are to be mentioned with mutual understanding which needs to be followed by both parties. it’s basically allow the landlords to rent properties that might not be desirable to long-term renters. The rental agreement is advantageous in the time when rental amounts can rise quickly. This enable the landlord to renegotiate the terms of the agreement from month to month or year to year, where it is mostly likely for year to year basis.
In short through a rental agreement the tenant receives a temporary possession over anything rented by the owner. However, the rental agreement could be regarding anything, which includes real estate, vehicle, personal possessions such as musical instruments, clothes or things like skates or shoes, books, CD, DVD, or digging machines tools or appliances.
The agreement identifies the parties, the property, the term of the rental, and the amount of rent for the term etc. Now certain conditions follow as the rent agreement should be an error-free document in order to protect the interests of both the parties and the document should serve as an evidence in case of any dispute that might rise between the two concerned parties.
The following are the cases where you require a rental agreement:
- When you are renting a house, an apartment, a room or a commercial space.
- To register the agreement with local authorities
- To document, enforce general and specific clauses
There are many times when both the parties might fail to have a rent agreement signed by both the parties, this will lead to legal inefficiencies in the case of any dispute. It is advisable for all parties to have a binding rental agreement that accounts for common situations and provides remedies to ensure coverage. It is as of now clear that the landlord must provide a copy of the rental agreement to each tenant that signs it. The tenant may request one free replacement copy during the tenancy.
How many types of Rental Agreement?
After getting ample knowledge about the rental agreement, it is now to know a bit more about it. Since you know that the rental agreement can be for varied things, there are three types of rental agreement. They surely are not based on the things but the time period. There are three different types of rental agreements:
1)Month-to-month rental agreements:They do not contain specific time limits. The tenancy continues until one party or the other issues a notice to vacate or terminate tenancy of the property and this should be done with 20 days written notice given before the rent is due. Month-to-month rental agreements can be either verbal or written. If your landlord takes any kind of deposit or nonrefundable fee from you, then for sure the rental agreement must be in writing and state the terms and conditions under which your money is refundable.
2) One-way leases: These are month to month agreements. These agreements are those where the landlord charges a termination fee or waives the deposit, if the tenant moves out before a certain number of months. They are also called “one-way” leases because they only benefit one party: that is the landlord.
3) Fixed-term leases: These are the kind of rental agreements, which are for a specific period of time. They must be in writing only; the verbal ones don’t hold any truth. One-year leases are very common. In the fixed-term leases it also restricts the landlord from increasing the rent or changing the rules of tenancy during the fixed term. On the other hand, the tenants are obligated to meet the conditions of the lease for the full term or face penalties.
Difference between Rent Agreement and Lease Agreement:
Now that it is clear that what is rental agreement and the types of the same, we must also be knowing about the difference between a rental agreement and a lease agreement per SE.
Beginning with the rental agreement it basically is provided for a tenancy of a short period (often 30 days) that is automatically renewed at the end of the period unless the tenant or landlord ends it by giving written notice. Now, when you are renting an apartment you need to be sure that the place you are paying rent for is there with you for the particular period of time. Of course, you don’t want to wander with the loads of luggage here and there again and again. Unless, of course you are here for a shorter period of time. Also, for these month-to-month rentals, the landlord can change the terms of the agreement with proper written notice.
On the other hand, a lease agreement gives a renter the right to occupy a rental unit for a set term — most often for six months or a year but sometimes longer also. This is as long as the tenant pays the rent and complies with other lease provisions. The landlord cannot raise the rent or change other terms of the tenancy during the lease, unless the tenant agrees, i.e there is a mutual agreement. However, this is a very rare case. There are several online lease agreement services providers available just like the online or commercial rental agreement service provider.
Also, a major difference is that unlike a rental agreement, when a lease expires it does not usually automatically renew itself.
What’s use of Rent Agreement.
There are a certain times people might feel that one does not require a rental agreement. They can stay for a longer period of time and they do not require a rent agreement. However, this is mostly the tendency of the bachelors or people who are living on their own in a new city.
They do not realize that an online rent agreement comes in handy especially when they undergo any circumstantial changes or there is any kind of disputes that occur between the owner and you as the tenant.
The rental agreement does not let the landlord make any changes with the rent policies, terms and conditions. Especially in the amount of rent and security. Along with it the rent agreement works very beneficially when you want any proof as an address proof, in terms of bill payments, bank documents for applying a credit card or so.
How it’s beneficial for tenant as well as landlord.
An agreement or any stamped paper works as a proof, in the first place. Having gone through the complete lines above it makes it loud and clear that the rental agreement has quite a lot of benefits for both the parties that is the landlord and the tenant.
The benefits for both are a few times common or vice versa related to each other. To specify a few, below are some pointers:
Works as an address proof: Now when we say proof, for the tenant the rental agreement works very aptly as an address proof. You can submit the Xerox to any organization that needs your address proof. In a new city your address proof is one thing that you would need especially when it comes to opening a new bank account or getting a credit card.
Identity proof: Now, when it comes to the landlord, through the rental agreement one is able to know that the person he is renting his place if ever seems to be doubtful about one can easily submit the documents and rental agreement to the police station.
Any Dispute: If ever any one of the two parties creates disputes regarding the rent or vacates the house without any prior information or asks to vacate the house, the rental agreement comes handy. The clauses mentioned do not make any of the parties take such step, until there is a mutual decision.
How to make it online?
Well, there are a number of websites that offer you ready-made online rental agreement, there are formats available. However, when you are signing up through a broker or so, you may have to fill an offline form. However, the online services provider like Society On Rent can make it happen instantly without any difficulties. There are organizations that will provide you with the rental agreement since they are Rental Agreement Service Provider. All you need to submit are your documents and everything else will be taken care of.