Landlord rights: What should NRIs consider before giving property on rent in India?

Landlord rights What should NRIs consider before giving property on rent in India

Property disputes are one of the most common disputes in India. Most common and some of the complex disputes are between tenants and landlords.

Be aware of your Landlord rights:

NRI’s and their rights as a landlord:

Being a landlord can be challenging and stressful. It is imperative that landlords follow few tips which may help him to secure his interest and also help him avoid any dispute in future concerning his rented property, especially when a landlord is an NRI and mostly residing abroad. When you are an NRI and have properties in India, it is essential to look after them and to ensure all ownership documents are updated along with the knowledge of all landlord rights.

Another important thing is to utilise and derive the commercial benefits from the property, whether it is residential or commercial property. Thus, the rented or leased property generates a consistent source of income for the NRI landlord residing abroad. Therefore, in your absence, the property can be utilised by giving it on rent or lease.

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This rented property would be a great source of income when a landlord is residing abroad and will not be personally using the property. However, it is a prevalent practice in India that tenants do not quickly vacate the residential/commercial property because of which landlord-tenant dispute arise. Thus, if you are an NRI landlord, you must take specific steps, under the guidance of a property lawyer before you rent out your property and during the rent agreement as well.

Finding and screening tenants, creating and following a rental agreement, and collecting rent online, a civil litigation lawyer can help guide you through all the vital landlord tasks.

Steps to check tenant credentials:

In case you plan to rent out your property, the first and foremost step is to investigate about your tenant. You must look into his credentials, background and his reputation in the market. If a tenant has a good reputation, the chances of violation and tenant dispute are less.

You can also find out from his previous landlord about his manner, conduct and whether he makes timely deposits of rent. Also, it is necessary to take from your tenant his proper documents such as Id proof, address proof so that he can be contacted and remains traceable.

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A landlord should look for a tenant who can pay in full amount each month, who doesn’t have a criminal history and has an excellent rental background. The primary purpose of tenant screening is to help find genuine tenants who will pay rent timely and take care of your property as if it were their own. To select responsible tenants, filter out good potential tenants from the potential tenants that approach you.

A well-thought-out screening process with established requirements for tenants will help weed out tenants who won’t qualify because of eviction history, unstable income etc.

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Rent agreement:

After finding a good tenant, you must execute a formal agreement with the tenant, which is complete in every aspect. To secure a landlord’s interest in the property, the Rent Agreement should be executed correctly and under the guidance of a property attorney.

A landlord should make sure that all the terms of the agreement are clear and the usage of the property is mentioned in the contract. It is imperative to include all clauses as to the period of the lease, manner of payment, consequences of non-payment of rent and notice period for eviction etc. Thus, it is imperative to have a thorough, well-written rent agreement or lease agreement. Also, it is essential to timely renew the contract on the expiry of the original agreement and to review the terms therein.

Recommended reading: Property law in India

Landlord’s representative:

A landlord should not abandon their property and should continue to keep a watch on their property and protection of their landlord rights. A landlord should ensure that his/her representative visits the property on regular intervals and keeps a check on the property, its condition and the fact that tenant uses the property only for the purpose mentioned in the agreement.

Also, such representative should make a note of any illegal construction, change of nature in the property made without the permission of the landlord. This will also help the representative to find out if the tenant sub-lets the property. It is highly recommended that some portion of the property is kept in the landlord’s possession which can be utilised on his visit to India. For example, if a landlord has a residential property, there are three floors, then the landlord can keep one floor in his possession.

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Civil Litigation Lawyers recommend that the payment should be received in the landlord’s account. Landlords should ensure he receives rent in his account instead of being collected by his representative in cash or through the bank.

Management of rental property by the landlord: 

The landlord should keep in touch with the tenant throughout and should keep a check on his whereabouts and conduct. This will help the landlord updated about the tenant and his behaviour. Also, this allows the landlord to remain updated about the tenant’s approach towards the property.

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Managing your rental property may not be your primary job, but it is still a business and a source of extra income. It’s essential to remain professional with your tenants, keep your finances intact, and perform thorough tenant screening before tenants move in. Thus, it is recommended that proper legal advice be taken from a property attorney before NRI landlord gives property on rent.

All the appropriate inclusions can be made in the rental agreement, and an NRI doesn’t have to face any issues with their rented property in future or violation of his/her landlord rights. As an NRI, one needs to protect the landlord rights and avoid unnecessary legal issues.