🏡 How to Avoid Mistakes While Drafting a Rental Agreement
A rental agreement is one of the most important documents in any landlord-tenant relationship. It defines the terms, responsibilities, and expectations of both parties — ensuring transparency and legal protection. However, many property owners and tenants in India make costly mistakes while preparing this agreement, leading to disputes, financial loss, or even legal trouble.
If you’re planning to rent out or lease a property, here’s a complete guide on how to avoid mistakes while drafting a rental agreement.
🧾 1. Not Using a Written and Registered Agreement
One of the biggest mistakes landlords make is relying on verbal agreements or unregistered documents.
Such arrangements hold little to no legal value in court.
✅ Solution:
Always draft a written rental agreement on stamp paper (₹500 or ₹1000) and register it at the Sub-Registrar’s Office if the term exceeds 11 months. Registration ensures authenticity and legal enforceability under the Registration Act, 1908.
📅 2. Not Defining the Duration Clearly
An ambiguous lease term can lead to confusion about when the tenant should vacate.
✅ Solution:
Mention the exact start and end dates of the agreement.
Example: “This agreement shall commence on 1st November 2025 and expire on 31st October 2026.”
Also, include a clause for renewal or extension, specifying whether the rent will increase during renewal.
💰 3. Ignoring the Rent, Deposit, and Payment Terms
Disputes often arise over rent amount, payment method, or due dates.
✅ Solution:
Include the following details clearly:
- Monthly rent amount.
- Due date for payment (e.g., 5th of every month).
- Mode of payment (bank transfer, UPI, cheque, etc.).
- Security deposit amount and refund conditions.
- Rent escalation clause (e.g., 5–10% yearly increase).
💡 Tip: Always collect rent and deposit through traceable digital transactions for transparency.
⚖️ 4. Skipping Clauses on Maintenance and Repairs
Many agreements don’t clarify who handles property repairs — leading to confusion later.
✅ Solution:
Specify clearly:
- Tenant’s responsibilities: Minor repairs, keeping the property clean, not altering the structure.
- Landlord’s responsibilities: Major repairs like plumbing, electrical faults, and structural damage.
Also, mention maintenance fees (if applicable for apartments or gated communities).
🧍 5. Not Conducting Proper Tenant Verification
Failing to verify tenant details is risky and can lead to security issues or rental default.
✅ Solution:
- Verify the tenant’s Aadhaar, PAN, and employment proof.
- Conduct police verification (mandatory in many states including Kerala).
- Keep photocopies of their ID documents and references.
🏢 6. Not Including Termination and Notice Clauses
Without a termination clause, you can’t legally ask a tenant to vacate before the lease expires — or vice versa.
✅ Solution:
Add clear terms like:
- Notice period: 30 to 60 days for both landlord and tenant.
- Grounds for early termination: Non-payment, illegal activities, property misuse, or breach of contract.
📋 7. Missing Clauses on Property Use and Subletting
Some tenants misuse rented properties for commercial purposes or sublet them without consent.
✅ Solution:
Add a clause restricting subletting or commercial use unless permitted in writing by the landlord.
Example:
“The tenant shall not sublet, assign, or part with possession of the property without prior written consent of the landlord.”
💡 8. Not Accounting for Utility Bills and Taxes
Confusion over who pays for electricity, water, internet, or property tax is common.
✅ Solution:
Mention all responsibilities clearly.
Example:
“The tenant shall pay monthly electricity and water charges as per actual usage. The landlord shall bear property tax and building insurance.”
🖋️ 9. Drafting Without Legal Help
Many people use online templates without customizing them to local laws — a risky move.
✅ Solution:
Consult a property lawyer or legal expert when drafting your agreement. They can help you include important clauses specific to your state and avoid loopholes.
🏠 10. Not Keeping Copies of the Agreement
Always keep two signed copies — one with the landlord and one with the tenant.
Digital scans or notarized copies can serve as backups for future reference.
A rental agreement protects both landlords and tenants — but only when it’s drafted carefully and legally.
To avoid costly mistakes, ensure that your agreement is clear, registered, and detailed, covering every financial and legal aspect of the tenancy.
If you’re unsure, always seek legal guidance or property management support. A well-prepared rental agreement today can save you major headaches tomorrow.