All You Need To Know About Renting A Home

By Lodha

When it comes to renting a property, having a proper rent agreement is crucial for both tenants and landlords. A rent agreement is a legally binding contract that outlines the terms and conditions of the rental arrangement between a property owner and tenants. It provides protection and clarity for all parties involved, helping to avoid potential conflicts and misunderstandings.

In this blog, we will explore the format of a house rental agreement, discuss the differences between notarised and registered rent agreements, understand the types and benefits of rental agreements, and share insights on how to save tax on rental income.

Understanding the Rent Agreement Format

While there is no single standard format for rental agreements, certain key elements must be included to ensure clarity and avoid disputes:

• Parties Involved: The rent agreement should clearly state the names and addresses of both the tenant and the landlord to ensure that it binds the right individuals.
• Property Details: Include accurate information about the rental property, such as its address, type, size, and any specific amenities.
• Rental Terms: Specify the rental amount, frequency of payment (monthly, quarterly, etc.), and the due date for rent. Outline any penalties for late payment.
• Duration of the Agreement: Mention the rental period clearly—whether fixed-term or month-to-month—with start and end dates.
• Security Deposit: Define the amount, refund conditions, and any permissible deductions.
• Maintenance Responsibilities: Clarify who will handle repairs, utilities, and maintenance charges.
• Additional Clauses: These may include subletting rules, pet policies, and the use of shared areas.

While these are essential elements, it is always advisable to use a rent agreement online platform or consult legal experts to ensure your agreement complies with local laws. A well-drafted document safeguards the rights and interests of both tenants and landlords.

Types of Rental Agreements

Before entering into a residential rental agreement, it’s essential to understand the different types available in India:

1. Fixed-Term Lease: A rental agreement that runs for a specific period (usually 11 months or more), after which it can be renewed or terminated.
2. Month-to-Month Lease: A flexible arrangement renewed every month, often used when tenants require short-term housing.
3. Commercial Lease: Typically used for office or retail properties, these are structured differently from residential agreements.
4. Company Lease: When an organization leases a residential property on behalf of its employees.

Each type has different legal and financial implications, so the choice depends on your purpose, duration, and level of flexibility required.

Benefits of Having a Rental Agreement

A properly executed house rental agreement benefits both the landlord and the tenant in multiple ways:

• Provides legal protection in case of disputes.
• Clearly defines the rights and obligations of each party.
• Serves as proof of address for tenants and proof of income for landlords.
• Helps avoid misunderstandings regarding rent, maintenance, or notice periods.
• Ensures compliance with the Model Tenancy Act and other local housing regulations.

In essence, a registered residential rental agreement provides peace of mind and establishes trust between the parties involved.

Documents Needed for Rent Agreement Registration

When registering a rent agreement, you will need the following documents:

• Original ID proof (Aadhaar, PAN, or passport) of both parties
• Two passport-size photographs each of the tenant and landlord
• Ownership proof of the property (e.g., sale deed or tax receipt)
• Rent agreement draft on stamp paper
• Latest electricity or utility bill of the property
• Witness identification and photographs

Having these documents ready ensures a smooth and legally valid registration process.

Details to Be Included in the Rent Agreement

A comprehensive rental document should include:

• Names and addresses of the tenant and landlord
• Signatures of both parties
• Monthly rental amount
• Security deposit details
• Maintenance and utility charges
• Period of stay
• Rights and responsibilities of the landlord
• Rights and responsibilities of the tenant

These details ensure transparency and prevent ambiguity at any stage of the tenancy.

Types of Rent Agreements: Notarised vs. Registered

Notarised Rent Agreement

A notarised rent agreement is verified and signed in the presence of a notary public. The notary acts as an impartial witness, confirming the authenticity of signatures. While notarisation adds credibility, it does not provide the same legal protection as registration. Such agreements are typically used for short-term rentals where legal registration is not mandatory.

Registered Rent Agreement

A registered rent agreement is submitted to the government registrar and legally recorded. It provides stronger legal validity and serves as admissible evidence in court if disputes arise. Registered rent agreements are generally recommended for leases exceeding 11 months, as they ensure greater transparency and enforceability.

Dos and Don’ts While Drafting a Rental Agreement

In India, rental agreements are often drafted on notarised stamp papers. However, even though they serve as legal contracts, the potential for misuse exists if not properly recorded. To avoid this:

• Do register your agreement at the local sub-registrar’s office for stronger legal standing.
• Do include comprehensive terms protecting both parties’ interests.
• Do not leave clauses open-ended; specify rent escalation, maintenance obligations, and renewal terms clearly.
• Do not skip important disclosures such as tenant verification or property ownership proof.

A registered rental agreement provides both safety and legal enforceability for landlords and tenants alike.

Important Points That Both Parties Should Know

• The agreement should be signed in the presence of two witnesses for added validity.
• Police verification of tenants is mandatory in most metropolitan cities. Landlords should also collect a copy of the tenant’s employment letter.
• For non-resident or foreign tenants, police verification is compulsory.
• As per the Model Tenancy Law, landlords cannot increase rent mid-lease and must give three months’ written notice before revising it.
• If a tenant defaults on rent for two consecutive months, the landlord can approach the rent court for eviction.
• If a tenant overstays after the lease expiry, they must pay double rent for two months and four times thereafter, as per the law.
• The agreement should clearly mention maintenance, water, electricity, and other utility charges, specifying the responsible party and the payment mode.

Understanding these regulations ensures compliance and reduces the likelihood of disputes.

How to Save Tax on Rental Income

Rental income in India is taxable under “Income from House Property.” However, there are legitimate ways to save tax on rental income, including:

• House Rent Allowance (HRA): Salaried individuals receiving HRA can claim partial exemptions based on rent paid and income bracket.
• Deduction of Municipal Taxes: Renters can deduct municipal taxes paid during the year from total rental income.
• Interest on Home Loan: If the rented property was purchased using a home loan, the interest component qualifies for deduction under Section 24(b).

Proper documentation—rent receipts, municipal tax receipts, and loan statements—is essential for claiming these benefits.

Easy Lease by Lodha: Simplifying the Rental Process

At Lodha, we believe in making every stage of homeownership seamless and rewarding. Beyond developing world-class residences, we also help our residents manage their homes efficiently. Easy Lease by Lodha is an exclusive platform designed for Lodha homeowners who wish to rent out their homes securely and transparently.

The platform enables users to create a rent agreement online, find tenants that meet their preferences, and generate agreements using legally vetted templates. The process is quick, safe, and compliant—eliminating negotiation hassles while ensuring complete peace of mind for both landlords and tenants.

By using Easy Lease, Lodha residents can ensure their rental income is well-documented and their residential rental agreement meets all regulatory and legal requirements.

In Conclusion

A well-drafted rent agreement safeguards the interests of both tenants and landlords while ensuring a harmonious rental relationship. Whether you choose a notarised or registered format, ensure your agreement is comprehensive, legally sound, and duly recorded.

With tools like Easy Lease by Lodha, the process of renting, documenting, and managing property becomes effortless—allowing you to focus on what truly matters: building a beautiful life.