Unlock the Legitimacy of Online Signature for Lodger Agreements in India

How to eSign a document: online signature legitimateness for Lodger Agreement in India

as an NRI what good is commercial property if you are not able to make money from it you may be looking to end up a tenant that tenant could be a multinational corporation or it could be a small business now in such a scenario what are the top 11 or 12 Clauses that you need to include in a lease deed this is your situation then you are in the right place because in this video that's exactly what I'm going to be talking about hi everyone my name is Ramana Reddy and I am a practicing lawyer in the high court of Telangana on this channel I help you by simplifying complex legal concepts for tips tricks and general Legal Information make sure you hit the Subscribe button below now before we talk about what are the Clauses to be included in the least deed let's talk about why you would even enter into at least eat because I mean there are so many people who enter into a lease without uh without a lease it they just do an orderly so why would you enter into a lease deed I think the main reason why as an NRI you would enter into a lease details because first of all you're living halfway across the world so there's no way for you to come here and inspect the property and make sure that everything is going as per the oral understanding I have seen horror stories where for example NRI comes back and he sees that entire flows in a building have been broken down you know to suit the purpose of the tenant and this was never agreed upon obviously when you know this becomes a dispute you go to court there's nothing in writing so it just becomes your word against their word uh you know that's just one example there are several other examples for example let's say that there was a lock-in period that you know for a period of six months the tenant agrees to be locked in three months in he says I want to quit the property you say Okay pay the balance three three months rent but he says you know what rent what lock him I don't know what you're talking about again nothing in writing and you will be in you know some kind of a problem so it's always better to have a written registered need now I'll get a registration in a bit but even if you want to have a written leave lead what are the Clauses that you include in the lease deed that is going to be the topic for our you today so the first thing to think about or the first term that you would consider including in your lease deed is the term of the lease how long is the lease is it for five years is it for 10 years is it for 15 years and so on the one thing to keep in mind when you're talking about the term of the lease is the lease commencement date so let's say for example that the lease is signed on the 1st of January and the Tenant works on the property for two or three months he renovates everything let's say starting a restaurant you know he gets all these renovation materials and so on and it takes him about three months to get ready you know he should not come and argue that look I was only able to start to start my business three months later so please do not charge me rent for the first three months now all this can be avoided if you have a clear term which is the start date and the end date what was the actual start date not just the date of signing but when the lease would start when the rent would start the second thing to think about is the rental payments I mean ultimately that's what as a landlord that's what you want so what is the rental payment you know from year to year it's better to have a table so say if you have something for 10 years the lease is for 10 years then for each year what is the rental payment and for each year what is the increment that happens for so that you know it's clear that you know there's no guesswork involved even there's no even math involved because basically all the math is already captured as far as rental amounts goes it's also advisable that you include your bank account details to which the rent has to be transferred the third thing to be thought about is what are the payment terms so when will the rent be paid so let's say for the month of February will the rent be paid on the 5th of February or will it be paid in the on the 5th of March so is it prepaid for the month or is is it postpaid for the month the other thing to think about is a security deposit because ultimately you know you are letting out your property to a tenant and you don't know him very well so you want to take a security deposit to ensure that once the property is handed over back to you you can go around have a look make sure that there's no major damage to these to you know to the Civil structure of the building and so on and only then you can hand hand over the security deposit the other thing to think about is you know if you are paying GST and so on then is the rental payments is that inclusive of tax or exclusive of tax so let's say a the rent is a hundred rupees the GST is you know 18 at 18 rupees so total comes to 118. so will the tenant only pay you 100 over the tenant pu 118 obviously if you're paying GST always advisable to negotiate with tax the other thing to think about and at least capture on paper whether whether you actually enforce or not is what happens at this late payment of rent make sure that you know if there's late payment of rent then there is that the tenant is somehow penalized not that the through interest not that you know that he that he was about gained by the interest but at least it acts as a deterrent to the tenant from delayed payment of rent the next thing to think about is the usage of the property why how is the property going to be used is it going to be used as a hospital is it going to be used as office space and so on and it is important to capture that in the least deed because you know you don't want to show up uh two or three years later and find out you know in an extreme example that there's a men's hostel there and there are like a hundred people living in that building which drastically reduces the life of that building so it is always advisable that you put a clause as to how the property will be used the next Clause to include are the you know is what will be the obligations of the tenant you know he has to pay the water bill the electricity bill and so on he has to make sure that that he maintains the premises in good condition he has to ensure that he returns the premises back to you on the you know as they were on the date it was handed over to them you may also include that you know he cannot obviously break down flows he cannot make any civil uh changes to the building the next Clause you would include you know you would say that as the lessor or as the owner of the property you know that you are the owner that you that you're leasing the property to him that you have absolute that you have absolute right through the property and at best the tenant only has tenancy rights over the property generally speaking the owner takes care of the property tax that is payable on the property but that is again is subject to negotiation between you and the Tenant the other important Clause to include is that the tenants should not be allowed to sublet the property that is you know he should not become a landlord himself and then sublet the property to a third party now I can understand a situation where you know there's a group of companies and one company wants to sublate it to another company for tax purposes or whatever that is okay but if you know if the tenant wants to submit it to a complete stranger that should not you know that should be a complete no and the agreement must specifically say that no subletting no assignment is permitted without prior consent of the landlord the next thing to include is termination termination can happen in a couple of ways one it can happen just through a flux of time so if the lease deed is for 10 years the lease May expire after 10 years and the least need stands terminated if it's not renewed that is the first way the second way is you know let's say that the that both of you negotiate that either of you should be able to get out of the lease by providing three months notice or six months notice and so on Just for convenience so that is called termination for convenience and that is a second way in which a termination can happen the third way in which a termination can happen is termination for breach lets the obvious example being let's say the tenant stops paying you money in that case you will say that look if you stop if you don't make rental payments for two months continuously I will give you a notice I will give you one week to cure the defect which is to use which is to pay back all the money if you don't do that then I reserve my right to terminate the least D and don't make the mistake of not including a scheduled property or schedule of property so towards the end of the lease date you just make a section called schedule of the property and you copy the same details as you know as you find it in your sale deed because that you know it sounds too obvious but a lot of people miss it you want to identify the property clearly in the document you know as to you know in which survey number what is the house number what is the door number in which locality which state you know obviously India you know north south east west boundaries so that there is Clarity and what are the square feet of or the square yards that are being given out for lease so that this this clarity as to the property or the the the I guess the extent of the property that is being leased out to the tenant finally I would also advise that you have an arbitration clause in the lease agreement what is an arbitration Clause basically you know the courts in India are clogged with hundreds of thousands millions of cases it takes a lot of time for you to get your case adjudicated to unload the burden of the courts the you know the legislature the government has come up with a scheme where you know where which is called arbitration where you can resolve your disputes privately where you can appoint a private judge and you know both parties can can argue before the private judge and the private judge also known as the arbitrator would pass an award which is it is much quicker as opposed to a cold process so I would highly recommend that you have an arbitration clause in your lease deeds and lastly and most importantly please please please get your lease Deeds registered if you don't register your lease Deeds they are as good as toilet paper and I'm sorry it's like if that's extreme but they can but the court will take it and throw it in the Dustbin no term in the lease deed will be upheld it will be as good as an oral lease now I've heard people say that you know that if it is for 11 months you don't have to get a register or if it is for some strip or if the amount doesn't cross a certain threshold the rental amount then you do not do not get registered all that is wrong even if the least date is for a day if the lead rate is moved for more than 100 rupees you need to get the least registered don't get the entire document don't go through the entire process and then not register the lease deed you would be doing yourself a great disservice I hope that video was helpful thank you for watching