Renting a property is a full time task which requires both
time and management. Generally it is easy to rent a flat if you are living near
to the property but if the property is located in other cities you may need to
hire a property manager who can help you to fill vacancies, collect rent, make
repairs and handle emergencies. However, hiring a property manager increases
costs as they typically charge half- or one-month rent from both the parties.
If you are planning to let the property, you should always keep few things in
mind to earn good rent and safeguard your interest in property. Once you
decided to let the property to a tenant, the first and foremost thing is to get
done the police verification of your tenant. As per section 188 of the Indian
Penal Code, police verification of tenant is compulsory. Post police
verification, the legal document that binds the landlord and tenant in a
mutually agreed terms and condition is lease agreement or rent agreement. The
scope of a Lease Agreement includes a right to enjoy such property for a
certain period in consideration of the price paid or promised. In case of any
dispute this document can be served as legal document. As a common practice in
residential property lease transactions, eleven month agreement is signed
between tenant and owner. However, some people prefer company lease which is
generally a 3 year agreement with the company. Company lease is generally
considered safer than the personal lease as in case of company lease, the
corporate assumes the responsibilities for the occupant. However, as per section
17, of the Registration Act 1908 it is mandatory to get rent agreement
registered and pay prescribed stamp duty and registration fee if the lease
period is more than 11 months. Few key transaction aspects that should be
covered in rent agreement include: Rent per month, Period of tenancy,
Termination right, Security deposit, Maintenance charges, Escalation charges
etc. The rent agreement should clearly define who will pay for maintenance,
electricity, water charges, property tax etc. Just to clarify, service tax on
rent came into the effect in 2007 and there was much confusion regarding
applicability of service tax on rent. Currently, service tax is not applicable
on renting of residential dwelling units for use as residence. Moreover, if the
flat is furnished the agreement should have a list of fittings and fixtures and
penalty for any damage. Beside rent agreement, now some RWAs (Resident Welfare
Associations) also signed a tripartite agreement between tenant, landlord and
the RWA. The RWA is legally empowered to ask for such agreement based on their
bylaws. Once the property is leased it is good to visit the property time to
time to know the condition of property. If owner feels that the property is not
maintained he can always ask the tenant to vacate the house by providing prior
notice as mentioned in the contract. For any damage or outstanding money the
owner can deduct the stipulated amount from the deposit. If the tenant refuses
to vacate the flat, the owner can contact RWA and can file a police complaint
as well. The bottom line is that you should make sure that you understand what
you're getting into. After doing the financial planning considering all the
additional expenses and all of the related challenges if you are meeting your
objectives, renting really make sense as it keep property maintained and add
few extra bucks to your income. For rent your flat visit allindiayellowpage.com