Are you planning to rent a second home? Then, here is the list of things that you must know as a landlord.
Who is a Tenant?
Any person holding the authority to use and reside in a residential property owned by someone else is known as a tenant. This person is also liable to pay a fixed monthly amount to the owner alias the landlord.
Ask for Primary Details:
The landlord must ask the person about his/her family background, previous rental records, marital status, occupation, native/permanent address and office address. Also, the landlord must opt for the police verification of the person before hiring him/her as a tenant.
Reasons to Hire a Tenant:
The primary reason for hiring a tenant is to earn income. This is so because the many people have a stable financial condition and thus buy a second home in order to have an extra source of income.
Another reason to hire a tenant is to have an additional source of income in order to pay back the home loan amount or to improve one’s own financial condition.
But, having a second home or a property to earn the rental income is not sufficient as you are likely to fall into a pit in case you won’t complete the proper procedure while hiring a tenant.
Requisitions for Registration of a Rental Agreement:
The landlord must register the rental agreement as per the laws. This registration includes charges for stamp duty which varies from state province to province. Like in Maharashtra, the landlord is required to pay 0.25 % of the annual rental amount. Whereas this charge is 5 percent of the whole rental amount in case of Leave and License agreement. The registration of a rent agreement requires the below-given documents:
Common area maintenance charges, the tenants’ responsibilities
Repairs and details on who bears the associated costs
Frequency of the rental increase
Security deposit details including its refund
Factor that Decides the Rental Amount:
A rental amount is fixed while considering factors like:
A tenant looks for a residential property that is budget-friendly and is located in a secure area. Also, many people search for a home with semi-furnished, fully-furnished, less and more amenities according to their budget. Another thing that decides the rental amount is the local property market.
Therefore, you must consider all the above-mentioned factors while finalizing the rental amount. We suggest you keep a track of the property market and increase/decrease the amount you want the tenant to pay.
Types of Rent Agreement
Given-below are the kinds of rental agreement that every landlord must know:
- Rent Agreement –
According to this document a property owner transfers his/her property title onto the name of some other person who is said to pay a fixed monthly rental for using that particular place/home. This agreement clearly states that a person with the living authority of this particular home is valid only for 11 months.
- License & Leave –
As per the law, this is elaborated under Section 52 of the Indian Easements Act, 1882. According to this rental agreement, a tenant can only avail the right to reside and use the residential property with landlord’s permission for a particular time. An extended stay after the completion of the tenure will be addressed as unlawful.
A landlord holds sole right to the property and thus ensuring the safety and custody of his/her property is utmost important.