Nevertheless, what happens when you don’t have a rental agreement and you are either; Living at a property on rent or, Rented out your property to a tenant?
NEW DELHI: A rental agreement offers perks to both, the tenant and the landlord. This document is drafted keeping both parties' interest in consideration and is also regarded as a piece of admissible evidence in the eyes of law.
The bottom line of having a rent agreement is to possess a credible address proof and to resolve any conflict in the future related to the same.
As a tenant
If you are a tenant living in a flat or house or running your own business on a rented property without a rent agreement, your landlord can simply give you an eviction notice of a minimum of 30 days or as per tenancy laws.
Also, even though your rent slips can be concrete evidence of you occupying the property on a legal basis, only a rent agreement can be proved as a piece of evidence in the court if any tiff arises in the future with the landlord.
An absence of a written rent agreement means the landlord can impose the increase of rent in adherence to the Rent Control Act 1948.
A tenant can also shift to a new place anytime as there is no rent agreement that states what should be the process if the occupant wants to evacuate the property.
In addition, you cannot apply for tax exemption via HRA if you don't have a rent agreement.
As a landlord
Even though a landlord might be able to leverage out several benefits over a tenant in the absence of a rental agreement, there are several setbacks too.
For instance, if there is no rental agreement, a tenant can still prove his/her tenancy by showing the rent receipts.
Also, in the absence of a rent agreement, if any damage is done to the property or the appliances in the house/flat, the landlord cannot enforce the tenant to pay for the same.
A landlord cannot force the tenant to extend their stay if there is no rental agreement restricting it.
Since a rent agreement also states the penalty for delaying the rent payment, a tenant is not liable to pay any additional charges for the same in the absence of a lease agreement or a rental agreement.
Living on rent without a rent agreement. Is it legal?
Yes, it is legal to stay on a property on rent without actually drafting a written rental agreement.
In the absence of a rent agreement, the implied consent/contract is assumed if the owner is collecting the rent every month.
Even though it is recommended to have a rent agreement to safeguard both parties' interests, the Indian law permits a tenant and a landlord to have a prosperous relationship without a written agreement.
So, the non-existence of a rental agreement does not affect the legal rights of the tenant or the landlord as both are encapsulated under the common law.
Typically, if you aren't contracted via a rent agreement, it is accepted as an oral lease.
An oral lease though does not offer much room for restrictions and guidelines, it provides flexibility to both tenants and landlords.
