Must Included Clauses in a Rent Agreement- Landlord and Tenant Guide

Rent Agreement Clauses: A Guide for Landlords and Tenants

Most people often find themselves renting a space more often than any other form of real estate acquisition. Though commonly accepted, far fewer people actively engage in the minutiae of paperwork associated with a lease. A lease agreement shouldn’t be viewed merely as a bureaucratic formality, for it represents an embodiment of trust, certainty, and legal protection in the relationship of the landlord and the tenant.

Even in cases when a customer in question is a recurring lessor, acquiring as much as possible from the lease is a great time saving strategy. With that said, let’s examine the essential clauses that should always be part of it.

🧾 1. What Is an Agreement for Rent and What Are Its Distinguishing Features?

An agreement for rent, as it is popularly known, lease deed and a rent contract, is a legal paper of great significance in the property leasing scenario. It binds the lessor and lessee and contains essential clauses such as, how much rent would be paid, for how long, and under what conditions.

Disputes do arise, and when they do, the agreement serves smart sets of protection for both the tenant and the landlord. Early move outs, property damage, and late payments all represent the kind of issues that can be easily handled with the right documentation.

Under the Indian Registration Act, 1908, a rental or lease agreement for a period of less than 12 months does not require registration. However, such an agreement must still be stamped in accordance with the Indian Stamp Act, 1899.

In case of a dispute taken to court, both parties are better protected if the agreement is properly stamped and registered (where registration is applicable), as a registered document is legally admissible as evidence.

2. Information That Should be Present in a Rent Agreement

Give the information in a clear and concise manner.

A rent agreement should capture:

• The full names, addresses, phone numbers and PAN/Aadhar numbers of the landlord and the tenant.
• The full address of the property including flat, building, and floor number.
• The type of property and its intended purpose.

Having this information helps to gain the trust of both parties as well as mitigating the chances of further problems in the future.

3. Rent and the Method of Payment

This should be the main focus of the contract. In this clause, be sure to include:

• The rent that is owed monthly by the tenant (for example, ₹60,000 each month).
• The time by which payment should be completed (for example, always by the 5th of the month).
• The payment method (for example, bank, UPI, and bank cheques).
• Other information and documents relevant to TDS which is relevant only if the rent is above ₹ 50,000.

Having clear information from the start helps to save disagreements in the future associated with the payment.

🔒 4. Security Deposit Clause

In India, security deposits are commonplace. What is important is the clarity and how it is spelled out in the rental agreement.

The deposit amount is interest-free, and is add in the rental agreement as “₹2,50,000 and shall be fully refundable at the end of the tenancy period.”

It is easier to deal with how the deposit is allocated to the outstanding amount of unpaid bills, damages, and painting charges at the end of the lease to be less at odds.

🗓️ 5. Duration, Lock-In Period, and Renewal

A rental agreement in India needs to be clear on the requirements and define:

• The period of time framed in the lease,
• The lock-in period of time, and
• The renewal terms.

A lock-in period is useful because it gives the landlord the ability to make necessary arrangements, and gives the tenant landlord the assurance of being in the rental agreement for the period of time framed in the lease without the possibility of moving out.

Both sides need the necessary flexibility because life is full of changes, with moving cities, families, and jobs.

In most contracts, a “30 days’ notice” clause is common. This allows the tenant to find a new apartment and gives the landlord time to rent out the apartment.

Also, underline how the notice should be delivered, via email, letter, or registered post. This helps avoid the “I told you on the phone” arguments later.

⚡ 7. Utility and Maintenance Responsibilities

The lack of maintenance clarity has the most potential to cause confusion. You can make it a little more concise:

• The tenant pays the water, electricity, and internet bills.
• The landlord pays for major repairs like leaks or ceiling issues.
• The tenant repairs bulbs, switches, and taps.

If maintenance is included in rent, make it clear. Honesty here helps the relationship go more smoothly.

🧱 8. Damage, Alteration, and Repair Clause

Routine wear and tear is a part of life, but damage is not. The agreement should state:

• The tenant must keep the property in good order.
• Any major damage beyond normal wear will be repaired and charged against the security deposit.
• No structural modifications are permitted without the landlord’s written approval.

This helps avoid unwanted arguments at the end of the lease and helps maintain the integrity of the property.

🚫 9. Sub-letting and Usage Clause

Never fail to state that the tenant is not permitted to sub let the entire property, or any part of it, to any other person without written permission.

Additionally, you should mention that during the term of the lease the premises will be used exclusively for residential purposes (in the case of a house or apartment, such). This avoids misuse and helps you remain within the bounds of the law.

🏠 10. Jurisdiction and Arbitration Clause

Whereas, if it ever becomes untidy, this clause determines the location and manner in which such issues will be resolved.

Specify that all conflicts shall be governed by the court of the locality (say in the case of Bangalore and Delhi).

There should also be an arbitration clause, which means that there will be no court proceedings until the matter is resolved by way of discussion or the appointment of an arbitrator.

This helps all the parties concerned by expediting the issue and making it cheaper.

🌧️ 11. Force Majeure Clause

Cases like floods, unforeseen earthquakes, or a sudden imposition of some government regulation which makes it impossible to live in the house you have rented, gives rise to a force majeure clause.

This one has in it a measure of fairness.

The renter will not pay rent if the property that has been rented is not fit for living.

Either of the parties may, after giving the necessary notice, terminate the agreement.

This pertains to a situation which is usually overlooked, but it can be a real lifesaver when you consider the unforeseen intercession of nature or circumstances.

🤝 12. Indemnity and Liability Clause

This one is ensuring that there is accountability. If by any chance, one of the parties is negligent and causes a loss or damage to the other, that party is obliged to compensate the other.

Someone who starts a fire during the duration of a lease and causes damage is responsible for the repairs. In the same way, if a landlord does not keep up on the necessary safety precautions, they have to pay for it.

There is no winner or loser. It is an equitable affair.

🚗 13. Parking, Furniture, and Annexure

If an agreement to lease also has the option for parking or has the furnishing of a premises, it is to be noted in a separate Annexure.

For example,

"Annexure 1: 2 Fans, 1 TV cabinet, and wardrobes, Lights, and Balcony Hanger."

Such a record serves as a reminder for all parties involved as to what is owned by who when a tenant vacates a premises.

🖋️ 14. What Are The Procedures For The Execution Of The Rent Agreement

In order for your rent agreement to be valid in law, ensure the following is done.

• Your agreement has to be endorsed and prepared on e Stamp paper according to the laws of your state.
• Both parties need to ensure that all pages are signed.
• There are two appointed witnesses in all cases.
• For undertakings beyond eleven months in duration, it has to be registered.
• For digital signatures, the Aadhaar e signature system has to be used.

There is an increasing trend in the use of e-stamping and digital signatures for rental agreements as it helps to streamline the process, ensure safety and, is widely accepted all over the country. LegalParihar.in is one of the best online rent agreement facilitator that provides combined E-stamping, E-drafting, E-sign, E-Notarization services that too in just Rs 399/- and applicable stamp duty.

⚠️ 15. What Are The Common Mistakes That Should Be Noted

• Not including a renewal or escalation clause.
• Missing the lock in or notice period.
• Not including minor matters that pertain to fixtures and fittings.
• Failure to sign or register properly.
• Not having adequate stamp duty paid as per law>
• Most Important- Not getting the document Notarized properly before a Notary and not get it registered in Notary Register>

You must analyze the accuracy of each part of the document before signing to prevent these minor mistakes from causing much more serious issues later.

Final Thoughts

A rent agreement doesn’t serve only the purpose of a legal document. It helps build a good, smooth relationship between the landlord and the tenant. There is no room for confusion, assumptions, or last-minute arguments when everything is clearly laid out.

You will thanks yourself later when everything runs peacefully if you allocate a little more time to analyze the document and check whether both sides understand every single clause and fully agree to it.

A rent agreement that is well drafted will serve parties involved beyond just legal purposes. It will also provide clarity, trust, and peace of mind.

❓ Frequently Asked Questions (FAQs) About Rent Agreement Clauses

1. What is the difference between a rent agreement and a lease agreement?

A rent agreement usually covers a short period, typically 11 months, while a lease agreement may extend beyond one year. Both are legally binding, but a lease agreement must be registered under the Indian Registration Act if it exceeds 11 months. In everyday use, the terms are often used interchangeably.

2. Is it mandatory to register a rent agreement in India?

Registration is mandatory only if the agreement is for more than 11 months. However, even shorter agreements benefit from being registered, as it provides legal protection to both the landlord and the tenant in case of disputes.

3. How much security deposit can a landlord take?

Security deposits vary depending on the city. In metros like Bangalore or Mumbai, landlords often ask for two to six months of rent as a deposit. The amount should be clearly mentioned in the agreement and must be refunded when the tenant vacates, after adjusting for any pending bills or damages.

4. Can a tenant leave before the lock-in period ends?

Generally, no. If a tenant vacates before the lock-in period without notice or mutual consent, they may need to compensate the landlord for loss of rent or inconvenience, as stated in the agreement. However, both parties can agree on an early termination clause if needed.

5. What should be included in the maintenance clause of a rent agreement?

The clause should specify who is responsible for regular maintenance and repairs. Typically, the tenant handles minor fixes like light replacements or tap leaks, while the landlord takes care of major repairs such as plumbing, ceiling, or structural issues.

6. Can a landlord increase rent during the agreement period?

No, rent cannot be increased during the active term of the agreement unless both parties have agreed to a rent escalation clause in advance. Usually, rent hikes of 5–10% occur during renewal after 11 months or one year.

7. What happens if rent is not paid on time?

If a tenant consistently delays payments, the landlord can issue a written notice as per the terms of the agreement. After the notice period, the landlord may legally terminate the contract and seek possession of the property through due process.

8. Can a tenant sublet the rented property to someone else?

Not without written consent from the landlord. Most rent agreements clearly prohibit subletting or sharing the property with another person or entity. Violating this clause can lead to immediate termination of the agreement.

9. What is a force majeure clause in a rent agreement?

A force majeure clause protects both parties when unexpected events — like natural disasters, government restrictions, or pandemics — make the property uninhabitable. During such times, rent may be suspended or the agreement can be ended without penalty.

10. Why is it important to list furniture and appliances in an annexure?

Listing furniture, fittings, and electrical items in an annexure ensures clarity about what belongs to the landlord. It prevents disputes later about missing or damaged items and serves as proof during property handover.

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