Elements of lease deed
Drafting a lease deed for a house taken on lease is an important part of the leasing process. Certain points should be kept in mind while drafting the lease deed, so as to prevent ambiguity and disputes at a later stage. With rental rates escalating, it is of utmost importance that the interests of both the lessor as well as lessee are adequately taken into account and well protected .
These points need to be specifically included in a lease deed.
- The lessee needs to ensure that lessor has title to the property being leased.
- Further, the lessee should take a declaration from lessor to ensure that the property is not encumbered .
- The lessor needs to take permission from the society or the governing authority of the building.
- Also, the lessee has to understand the terms and conditions under which such permission is granted.
- It should be ensured that all previous dues like telephone and electricity bills have been paid and no bill is due.
- The agreement should be signed by the lessor himself or his authorised power of attorney.
- The society share certificate or equivalent should be seen.
- Lessee should verify the society share certificate in order to ensure that the lessor has the title to the property.
- This becomes all the more important as in most transactions the lessee is expected to pay a security deposit to the lessor.
A lease agreement should be specific about these issues:
- Facilities to be included for the rent
- Monthly maintenance and society charges
- Parking charges
- Payment of house tax
- Rent escalation clause
- Routine repair expenses
- Fixtures and fittings to be provided by the lessor and their maintenance
- Grounds for termination of agreement
- Notice period to be given by either party to terminate the lease
- Registration expenses of lease deed
- Renewing the deed
- Security deposit payable
- Interest on security deposit
- Advance rent payable
- Access to common areas
It needs to be ensured that the interests of both lessor and lessee are adequately protected .
The mutually-agreed terms and conditions should be laid down in black and white. This will reduce the chances of disputes at a later stage.
Source: economic times
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