Are you planning to move to Bangalore? The cosmopolitan capital of the state of Karnataka attracts several migrants every year. As per a recent census, Karnataka is among the top multilingual states of India with 40% people speaking two languages. If you too are planning a move to Bangalore, chances are you’re scouting for homes to rent. You have dozens of things to attend to at this time, one of the most important of which is drawing up a formal rent agreement.
Real estate prices in Bangalore can be very steep, which is why many residents prefer to live in rented accommodation. From classified ads to traditional ways like approaching brokers, family, and friends, there are multiple ways to find flats for rent in Bangalore. But before moving into a rented flat, it’s crucial to verify the paperwork, especially the house rent agreement. Let’s understand what such agreements entail.
What is a House Rent Agreement and Why is it Important?
A house rent agreement is a written contract between the property owner and the tenant who wishes to stay in the property for a certain period. It is drafted on a stamp paper and is considered the legal proof of residence. If you want to get a gas connection, share address proofs with your bank, apply for an Aadhaar Card or get a new SIM card for your phone, you’ll have to share a copy of this agreement. In case either party violates any terms of the agreement, the matter can be taken up in civil court.
Note: While rent agreements cover both personal and commercial use, the terms may differ for the latter. If you’re looking for, say, an office, consider pursuing a co-working space in Bangalore for better advantages.
Important Clauses in a House Rent Agreement
This agreement typically includes details of the following:
- The property: Include the address, the area covered, etc.
- Utilities: Are there any utilities provided by the owner, say, furniture or electronic appliances? What are the terms of using these?
- The owner: Include the name, address, ID proof, etc.
- The tenant (same as the owner)
- The rent agreed between both parties
- Lock-in period: This is the time before which neither party can terminate the agreement.
- Mode of payment of rent
- Penalty for late payment of rent, if any
- Security deposit paid (In Bangalore, this is usually the rent for 6–10 months)
- Rules and regulations of the property: E.g., are pets allowed to stay with you?
- Terms of payment for any repairs required during the rental period
- Food-related guidelines, if any: E.g., in Bangalore, some owners rent to any vegetarian tenants.
Home Rent Agreement Types in Bangalore With Tenures
In Bangalore, rent agreements are governed under the Karnataka Rent Control Act, 2001. This law includes standardised rental rates and the rights of landlords and tenants. There are two possible types of rent agreements between the owner and the tenant:
- Lease: This type of agreement lasts for a minimum period of 12 months. The tenure can be longer, for instance, 2–3 years. The tenant often pays a lump sum, one-time rent for this period and does not have to pay a monthly rent. During the term of a lease, the landowner cannot change the rent or ask the tenant to leave without violating the agreement.
- Rent: This type of agreement lasts for 11 months, applies month on month, and gets automatically renewed. The tenant pays a monthly rent. At the end of 11 months, the agreement can be extended if both the owner and the tenant so wish it. This agreement is not as restrictive as #1, and the landlord can ask the tenant to vacate the premises during the agreement period (after giving a 30-day notice). The same rule applies to the tenant.
So, which home rent agreement type suits you better? If you’re a tenant seeking a long-term association and want to insulate yourself from rent increases, a lease agreement (#1) makes better sense for you. These agreements are restrictive but also more secure. They can be particularly useful if the rents in the locality are likely to rise during the agreement period. However, a rent agreement (#2) is usually more common as it gives both parties more freedom. The tenant is free to vacate the property if needed, and the landlord is free to make alterations to the rent.
How to Make a House Rent Agreement
Here are some simple ways to draft your home rent agreement:
- Consult a lawyer. Lawyers charge between INR 2500 to INR 5000 for this document.
- Use an online rent agreement generator like LegalDocs or NotaryKart. Enter the details of the property, the owner, the rent, etc., and you can generate a personalised document at a fee. For example, LegalDocs charges INR 2511 for creating a rent agreement for Karnataka for a monthly rent of INR 10,000. If you want the document to be notarised, you will have to pay INR 2633.
- Get a house rent agreement format on the internet and customise it according to your needs. For example, you can check out the rent agreement samples on ClearTax and Scribd. You can download house rent agreement samples free of charge. Once you have the content ready, print it out on a stamp paper.
Registering the House Rent Agreement
After you’ve drafted the agreement, you must get it registered at a Sub-Registrar office. Both you and your landowner need to sign the agreement in the presence of two witnesses. You will need to carry your ID proof and pay the required stamp duty charges and the registration fees. The process usually takes a few days.
Note that registration is mandatory only if the rental period is 12 months or above. However, it’s always a safer bet to opt for registration. In case of a legal dispute, it’s only a registered and stamped document that is admissible as evidence.
Can’t I Just Get The Rent Agreement Notarized?
Many people get confused between notarization and registration. They assume that once you download a house rent agreement and get it notarized at a nominal cost, you’re done. This is untrue. It is NOT adequate to only notarize your rent agreement.
When you notarize a document, all you’re doing is getting a public officer (“notary public”) to sign. You cannot show such a document in court as a legal and binding proof. Yes, you can use it as address proof for some day-to-day needs like getting a SIM card. However, you’ll have to produce a registered rent document for tasks like renewing your passport.
Costs Involved in a House Rent Agreement in Bangalore
Coming to the million-dollar question: how much does all this cost? Well, the charges are nominal, but the benefits are abundant. Here is a snapshot of the costs involved:
- Stamp Paper: The rent agreement must be printed on a stamp paper. It costs INR 100 or INR 200.
- Stamp Duty: The most you’ll pay is INR 500. The exact price depends on your rent, deposit and tenure. The standard stamp duty in Bangalore for a rental period up to ten years is 1% of the annual rent and deposit. It is 2% for rental periods above ten years.
- Registration Charges: It is 1% of the annual rent and deposit.
The total cost comes to around INR 1000 (INR 2500–INR 3500 if you use a service provider). Many owners/brokers have an arrangement wherein they split this cost in half with the tenant.
Be Careful About This While Renting a House in Bangalore
While the house rent agreement aims to protect the interests of both landlords and tenants, miscreants are always up to tricks. Keep the following cautionary points in mind:
- If you’re a tenant, ensure to deal directly with the owner. You may be paying a brokerage to a broker/agent, but it’s essential that you deal with the owner as far as the agreement is concerned.
- Don’t forget to double-check ID proofs.
- The rent agreement should include details of the monthly gas or electricity bill. Discuss this with the owner.
- The terms of security deposit must be mentioned in the agreement.
- If you pay a token advance to the landlord, try to pay it via online transfer, cheque or DD. Such modes of payment can be tracked (as opposed to cash).
- Don’t pay beyond your budget for any additional furniture offered. You can easily get furniture on rent in Bangalore.
- Before signing the agreement, check the fittings, fixtures, and appliances. Get any necessary repairs done. If any damage is incurred during your stay, the landlord may deduct the cost of repair from the security deposit.
- Get your rent agreement registered at a local Sub-Registrar office. Retain photocopies of the registered document.
A house rent agreement is a crucial document for both tenants and landowners. It gives you security and is the legal proof of renting out/staying in the said property. Before shifting into a new accommodation or renting your flat to a tenant, get this document in place. It can save you from several headaches in the days to come—both psychological and procedural.
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