Paying Rent

While paying rent, there are certain things you should keep in mind:

Depositing Rent

  • In case of lease deeds, the law requires you to pay the rent by the 15th of the month. However, this is not necessary for a leave and license agreement.
  • You usually pay rent for the coming month. For example, if you are paying rent on 15th June, you are paying for the period of 15th June to 15th July.
  • The date of the rent payment will be specified in your written agreement for both rent/lease and leave and license agreements.
  • Rent can be paid to the landlord/licensor through cheque or online transfer so that there is a record of payments.
  • Always ask for a rent receipt from the landlord/licensor, especially if you have paid your rent in cash. The proof of transaction you get from the bank in cases of online or cheque transfers is not the same as rent receipts. Receipts from banks or online account statements are not the same as the receipt you get from your landlord/licensor acknowledging that you sent the rent. This is so that you have a proof of payment in the form of a receipt which you can use for tax purposes, evidence in Court etc.

Increasing Rent

  • Your written agreement will mention the percentage of increase of rent after the expiry of the term of the written agreement. Try to find out the practice in your city so that the raise percentage is not unreasonable.
  • If your landlord does decide to increase the rent, he can only do it after the term of your written agreement is over

Stamp Duty

Either the landlord or you or both of you will have to pay the “stamp duty” which is a tax levied on the agreement that you enter into when you are renting a house or a flat. You have to give your stamp duty during the process of registration.

Security Deposit

Security deposit is taken by the landlord/licensor since during the rent period as a tenant/licensee you are going to be in possession of his property. It is only returned when you are handing over the keys to the landlord/licensor while vacating the flat. The landlord/licensor would usually inspect the house for any damage.

Negotiation of Security Deposit

There is no specific law or regulation that determines the amount of the  deposit a landlord/licensor can take. The amount is usually negotiated when the agreement is being made. The security deposit is taken by the landlord/licensor for the following purposes :

  • To recover any costs incurred due to any damage caused by you during the rent period
  • To recover unpaid rent or utility bills.
  • To use it as leverage to evict tenants/licensees.

Amount of Security Deposit

In some cities, like Delhi and Mumbai, it is a practice to take 1 to 2 months of rent amount as a security deposit, and in some others, like Bangalore, the amount taken as security is almost 10 months of rent.

Some landlords/licensors even increase the security amount when the rent increases at the end of an 11 months agreement.

Since there is no law regulating security deposit, it is all based on your capacity to negotiate and a sense of good faith between you and your landlord/licensor.