A tenancy is a form of ownership of the property. A tenant is a person who, by signing a lease or rental agreement, is authorized to inhabit someone else’s property. The person who is renting is given some rights under the rental agreement, but they are also prevented from obtaining full legal ownership of the property. Both the landlord and the renter are aware of their respective roles, rights, and obligations once the agreement is in place.
Additionally, the tenant is prohibited by this arrangement from assuming full legal property ownership. Because it offers security for the tenant and a reliable source of revenue for the landlord. The tenancy is advantageous to both sides. To make the most of their arrangement, both parties must abide by the terms set forth. A tenancy is a legal arrangement that permits both parties to benefit from the property while simultaneously safeguarding their respective rights.
Tenancy: What Does It Mean?
A tenancy is a legal right to use a structure or piece of land that belongs to someone else for a set length of time in return for paying the rightful owner a certain amount of money (rent).
Key Aspects of Tenancy
Let’s say you rented out your property for a few months to a family friend. This cannot be considered a tenancy. Establishing tenancy becomes very dependent on three criteria.
First and foremost, the individual or family should only be allowed access. Second, the renter needs to be paying to guarantee that access is unrestricted and uninhibited by the landlord or anybody else.
It would therefore only be a kind gesture on your behalf if you rented out your property to a family friend without collecting rent. One of the tenancy’s three characteristics is that it has a set duration.
The property might be rented out for a year, two years, or even three years. Both the landlord and the tenant should be allowed to agree on the length of the lease. It may even be terminated if any actions are taken that go against the terms stated in the rental agreement. A legal agreement between the landlord and tenant is established by the rental agreement.
Which Components are Included in a Tenancy Agreement?
The following crucial papers must be included in a formal tenancy agreement:
Property Description: The description of the property must include the following information: the property’s size, address, layout, and any fittings or fixtures.
Security Deposit: The amount of security a tenant must pay and the circumstances in which it will be reimbursed after the tenancy must be specified in a rental agreement.
Termination and Renewal Clause: A tenancy agreement should specify the circumstances in which it may be terminated as well as the procedure for renewing it if necessary.
The Amount of the Rental and the Payment Deadline: The agreement must specifically state the rent amount and the regularity of payments. The document must also expressly state the deadline.
Name and address of the Persons Involved: For the involved parties to be informed about the other party they are interacting with, the address and personal information of the parties involved must be appropriately maintained in the tenancy document.
Term of Tenancy: The tenancy agreement must include the start and end dates of the tenancy as well as any applicable termination and renewal clauses.
Maintenance and Repair Responsibilities: It should be made clear in a tenancy agreement which party will be in charge of maintaining and repairing the property. It should also specify the circumstances under which rent is due from the tenant.
Limitations on Subleasing and Modifications: A lease agreement should outline any restrictions a tenant may have on subleasing or making alterations to the property (if any).
In summary, it is imperative that the agreements clearly outline the requirements, opinions, and obligations of both the landlord and the tenant to prevent future legal disputes.
Lease Versus Tenancy Differences
Tenancy and lease are interchangeable phrases. However, leases typically last longer than tenancies. Certain leases have a 99-year term. Short-term rental agreements are referred to as tenants.
Tenancy Types in India
It is necessary to register each of the tenancy agreements listed below. Landlords need to be aware that they may also face penalties for violating the agreement if the renter is a threat to the community and the agreement is not registered. Thus, the three main tenant classes are as follows.
Tenant by Statute
Statutory refers to anything that is governed by legislation. A tenant like this is shielded from eviction. Only in cases where the tenant has damaged the property or has not utilized it for a prolonged period—such as six months or longer—may an eviction take place.
Statutory tenants typically pay very little in rent. In the event of the tenant’s passing away, his or her heirs may legally take over as the previous tenant.
Lessee
If the terms of the landlord-lessor agreement do not specifically indicate otherwise, the lessee has significantly greater legal rights than other tenants and can assign or sublease a property. Additionally, the renter has control over the property and is not in danger of being evicted unless they violate any of the terms outlined in the contract.
Licencee
A licencee, as the name implies, has no ownership stake in the property and is free to use the benefit as long as the owner so chooses, in contrast to a lessee or statutory renter. A licence is the document that gives someone, or a group of individuals, the authority to do, continue to do, or reside temporarily on immovable land, according to the Indian Easement Act, 1882.
It should be noted that the right is referred to as a licence when the action would be illegal without it and that it does not equate to an easement or an interest in the property. A license can be revoked more easily than other kinds of tenancies.
Landlord Rights
A rental agreement, as previously stated, creates the landlord’s legal ownership rights over his property. Consequently, neither the lessee nor the renter may usurp the property, even if it is rented out. A number of measures are in place to keep an eye on this. The Rent Control Act grants landlords the following three crucial rights, which one must be aware of:
Right of Eviction: If a renter violates any laws, the landlord may be able to have them removed. States in India may, however, have varied interpretations of this right. According to the law, a landlord must serve the tenant with a notice of eviction before going to court.
The Authority to Collect Rent
The rent can be set by the landlord and may be raised from time to time. Therefore, it is imperative that the rent agreement explicitly specify that rent will be revised periodically.
The Ability to Reclaim the Property for Upkeep
The landlord may temporarily retake possession of the property to make repairs, make renovations, or maintain the space. However, alterations to the property shouldn’t be done to endanger the comfort or well-being of the tenants.
Rights of a Tenant
Tenant rights are also established by the Rent Control Act. The Act safeguards their status as tenants by outlining their responsibilities and rights.
Cannot be Wrongfully Evicted
A landlord is not legally permitted to remove a tenant unless they have broken any of the terms outlined in the rental agreement. Even if states may have varying guidelines for legal grounds for evictions, it might be simpler to assert that landlords are not permitted to kick out renters for any old cause.
The Right to a Fair Rent Payment
Typically, a property’s rental value ranges from 8% to 10% of its total worth. There is no cap on the amount of rent that landlords can demand, so they can set it independently or at current market rental rates.
The tenant has the right to file a lawsuit at any time if they feel the rent modification was unfair.
Rights to Fundamental Necessities
The tenant cannot be denied access to basic amenities. This covers the rights to electricity, fresh water, and other necessities. Even if the renter has not paid the rent, these services cannot be terminated unless there are circumstances outside of the landlord’s control.
Obligations of a Tenant
While tenants have certain benefits and rights, they also have obligations to protect their interests. The following are some important responsibilities:
Extensive Research: Tenants should make sure the property fits their specifications and requirements by conducting an extensive study on it before signing the tenancy agreement.
Read the Agreement Carefully: Tenants must thoroughly study the leasing agreement to comprehend all of the terms and prevent any surprises down the road.
Understanding of Regional Laws: It is important to become familiar with the tenancy rules that apply in that particular state. To protect the rights of both landlords and tenants, every state may have its laws.
Punctual Rent Payments: Even if there is a disagreement, tenants should make sure that the rent is paid on time as specified in the leasing agreement.
Utility Bill Payments: To avoid any interruptions in essential services, utility bills must be paid under the agreement.
Tenants are in charge of keeping the rental unit in good condition and making sure the landlord is notified of any problems or damages as soon as they happen. This helps to keep the property in reasonable condition.
Bottom Line
Tenancy is the term used to describe an individual’s right of possession over real estate for a predetermined amount of time in exchange for rent. It guarantees a fair legal system by imposing different obligations and rights on landlords and tenants.
For a tenancy to go smoothly, tenants must pay their rent on time, be cognizant of local rules, and comprehend the complexities of their leasing agreements. However, landlords still have rights like the ability to charge rent, maintain their property, and even evict tenants under certain conditions. Maintaining these rights and obligations promotes a positive tenant-landlord relationship and guarantees the efficient administration of rental properties in India.