Want to rent out your property? Do it right to avoid legal troubles later!

Published on / By M. Pattabiraman Twitter: @pattufreefincal

Published: June 13, 2023 at 6:00 am

If you have a property to rent out, here are some key considerations to ensure there are no legal issues with your tenant in future. The law provides several safeguards for both landlords and tenants. If the agreement between the two parties is not done right, legal hardships will result in loss of time and money.

  1. Decide if you wish to let out to a family or a business establishment (if such a choice applies to the property). It may be hard to make a business vacate since the address would be tied up with their GST, PAN etc. When possible, rent out only to those with good references from friends or family. Use a broker only as a last resort.
  2. Do not type the rental lease on your own and execute it. Seek the services of a law firm experienced in rent cases and ask them to draft one. They will ensure there are no loopholes and ensure the wording is up to date, taking into account recent judgements. See, for example: Registered written rental agreements must to evict tenants under new law: HC. This judgement was used as a precedent to win multiple such cases.
  3. Register the lease with the state rental authority. This is a crucial step in validating the lease. If this is not done, there can be trouble later if the tenant refuses to vacate. The law firm should guide you in this regard.
  4. Ensure that a reminder is sent at least a month in advance to get the lease renewed (if you desire). Typical leases are 11 months in duration. Get the new lease whetted by the law firm and re-register with the rental authority. At any point, the tenant’s use of your property must be backed by a valid lease.
  5. Ask the client not to undertake any maintenance work on the property without your permission (this wording will also be on the lease).
  6. Legal safeguards are important, but nothing beats the human touch. Maintaining a good relationship with the tenant is key.
  7. Often, a long-standing tenant may be interested in purchasing the property from you (assuming you wish to sell). But if you suddenly decide to sell it to someone else, the above legal safeguards can help minimise time and money if either party resorts to legal recourse.