The tenancy deed describes all the rules and regulations which are to be followed both by the tenant and the owner of the house in a lucid manner to avoid any kind of confusion between the two parties.
1) General information about the tenant
This includes the full name of the person whose name is written on the deed. Names of all the family members living with him should also be included. Address of his native place, his occupation, about any legal case pending against him should be known to the owner through the deed.
2) Occupancy terms
The deed should clearly specify as to who can live in the property. Only people whose name is included in the deed or those whose names are informed about by the tenant to the owner can live in the property. This term is very important for the owner as it gives him a power to abstain the tenant from subletting the property further.
3) Duration of tenancy
The term of the tenancy should be clearly discussed and stated in the deed by the owner to avoid any kind of issues later. The owner should ensure that the tenant vacates the house in the time specified or else he has a right to take legal action against him in that case.
4) Amount of rent
Both the owner and the tenant should discuss the rent to be paid in the first go as it is the most important thing in the deed. There should be no confusion in the terms of rent. The owner should ensure that:
The rent is clearly mentioned in the deed and the tenant readily accepts it.
Whether he has to give the rent in cash or cheque should be known to the tenant in the deed.
If the owner wants to fix a fine for non payment of any month’s rent then he should mention the amount or percent he wants to charge as fine.
5) Time of rent payment
The owner should clearly mention as to when the tenant has to give the rent , at the beginning of the month or in the middle or at the end of the month.
6) Token money
Many a times owners of the house take a certain amount of money from the tenants as a token money which may or may not be refundable depending on the negotiations between the owner and tenant.
7) Repairs and maintenance
The deed should clearly state as to who will be responsible for the repairs and maintenance of the rented area.
8) Parking rules
If the tenant needs space for parking and the owner accepts to provide it, then the terms should be provided in the deed.
The deed should specify if the tenant could make any kind of alterations to the property.
10) Pet details
If the tenant wants to keep a pet then he should inform the owner about the same so that this term can be included in the deed.
11) Other details
i) If any guarantor is involved in the process then his name, profession, address, his relation with the tenant should also be included in the agreement.
ii) The agreement should have declarations from both the parties.
iii) The agreement should be signed by both the parties.
Owner- The person who owns the property which is to be rented is known as the owner of the property.
Tenant- The person who enters into agreement with the owner to use his property as an accommodation for a fixed time is a tenant.
Legally binding- The accomodation deed is legally binding on both the parties which means that if there is a breach of contract from either of the party the party at fault is punishable by law.
A qualified exchange accommodation arrangement is a strategy which guides a person to avoid capital gains by the virtue of section 1031.
Section 1031 allows a person to sell a property without generating capital gains by replacing the property with a property which has a similar nature to the one that is being sold. The person hires a qualified intermediary that helps to find a client for the seller of the property and transfers the property in the name of the client and the replacement property is transferred in the name of the original seller. If the buyer fails to find like size property within 45 days then the person is liable to pay the capital gains tax.
‘Prevention is better than cure’ as they say is true in the case of rental agreements because if you fail to take proper steps while making the accomodation deed then you will have to face circumstances which would be adverse. Understanding the importance of the deed and its terms is of great importance for both the involved parties. It gives adequate and reasonable powers to both the parties and so no party is in loss.
In case there arises a dispute between the owner and the tenant regarding rent, parking place, rental term etc., then this agreement is the last resort for both the parties.
Both the parties involved in the contract i.e the owner of the property and the tenant.