What to Consider when Concluding a Residential Lease?

Last revision: Last revision:May 29, 2021
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Are you going to lend your property to someone for residential purpose or are interested in using some property for own residential purpose, then, this Guide is for you. This guide discusses the important factors to be considered while entering into a Residential Lease Deed.

Please be advised that nothing in this document constitutes legal advice and everything here is for your information only.

What is a Residential Lease?

A Residential Lease Deed is a document that outlines the rights and responsibilities of a Landlord (owner of the property) and Tenant (who takes it on rent) when a residential property is being rented. It is always better to have a written Residential Lease Deed to avoid any disputes in the future and protect your rights.

In a Lease, basic information about the rental property - such as rent payments, security deposit information, charges for maintenance and utilities etc.- will be listed by the landlord such that the tenants are aware of their obligations. Additionally, the lease should also list the landlord's obligations such as payment of property taxes and carrying out repairs on the property being leased. Thus, a properly drafted Lease protects the rights of both the Landlord and Tenants.

A lease is a contract describing the terms under which one party (tenant) agrees to rent property owned by another party (landlord) for regular payments of rent in a specified period.

What are the most important terms in a Residential Lease Deed?

1. Rental Property Description

It is important to mention the property description with accurate information. It is always better to include all information, including room number, floor, building number, street address, etc., along with a plan of property attached with the lease deed to avoid any disputes in the future. You also need to specify the allowed and non-allowed usages of the property while it is on rent.

2. Term of Lease

The term of the lease can be decided mutually by the Landlord and Tenant. It can be for a fixed period like a month, or a few months or years. You can also enter into a lease where the term gets automatically renewed unless it is terminated in accordance with the termination clause in the lease.

Leases can be short-term (a few months) to long-term (a year or more) and are used for all different types of rental properties, such as homes and apartments. It is important to note that if the period of lease is more than 11 months, the lease deed needs to be registered before the jurisdictional sub-registrar as per the terms of the Registration Act, 1908. If you fail to do so, such a lease agreement will be invalid in the eyes of law and may not be executable in the court of law. If your lease deed is of less than 11 months, you just need to pay applicable stamp duty where the property is located and the registration is optional.

If the lease deed of more than 11 months is not registered, it will not be admissible as evidence in case a dispute arises between the parties to the lease.

3. Lease Rent

The lease deed specifies the amount of rent to be paid to the landlord, how it should be paid, the penalty for any default in payment, etc. Under the lease deed, you can specifically mention how the rent and increment in rent will be calculated. Usually, the rent is paid at the beginning of each month. If the parties agree, they can enter into a different payment schedule as per their choice. The lease also includes how the payment has to be made and the penalty for any late charges. To record the payments of rent and avoid any payment related disputes in future, you can always hand over rent receipts to the other tenant and keep a copy for record purpose.

4. Security Deposit

Security deposit is paid to the landlord at the beginning of entering into a lease agreement. A security deposit is intended as a measure of security for the landlord against any damages to the rented property. The amount of a security deposit is typically one month's rent but you can fix a higher amount if required. You can also decide if any outstanding payments by the tenant including non-payment of rent, damages to the property, pending bills, etc. can be adjusted against the security deposit or not.

The tenant will not be entitled to any interest on such security amount and the landlord shall be liable to return the amount at the time of termination of the lease after any adjustments if applicable. At the time of vacation of the property, the tenant can send a letter requesting the return of the security deposit to the landlord.

A security deposit serves as a mean to fix or replace something in a rental property that was damaged, lost or stolen by the tenant.

5. Maintenance and Repair Policy

Landlords typically provide necessary maintenance or major repairs during the rental period, while the tenant is responsible for the cleanliness and day to day repairs of the property. It iss the duty of the landlord to make the property habitable including compliance with local health and building codes, structural integrity, weather protection, throughout the lease period. As far tenants are concerned they are responsible for regularly discarding the trash, repairing damages caused by the tenant or their guests, damages due to misuse of the property, timely reporting of any maintenance issue to the landlord, and so on.

But always, the standard clauses may not be practical and the parties can decide on who will do what in the lease agreement. For example, the parties can decide upon who will bear the cost of recurrent building/association maintenance charges and so on. Thus, a properly drafted lease agreement shall be comprehensive enough to address things like maintenance and repairs of the rented property.

It is the duty of the tenant to inform the landlord of any major maintenance work at the property on time. For this, the tenant can send a tenant maintenance request letter to the landlord citing the issues at the building and this will serve as a record of the request made by the tenant. In case if the landlord fails to do repairs within the adequate time, the tenant will be allowed to do such repairs and the landlord shall be liable to refund such cost incurred by the tenant within the specified period mentioned under the lease agreement.

Generally, major repairs and maintenance are done by the landlord and general and regular maintenance are done by the tenant at his/her own cost. Any variations or arrangements in maintenance can be specifically mentioned under the lease agreement.

6. Termination

Generally, a lease agreement gets automatically terminated at the completion of the term. If you want to terminate the lease before the term, you can do it by sending the notice as mentioned under the lease deed.

Thus, it is important to mention under the lease that how much notice period is required after the lock-in period to terminate the agreement. If you fail to give the notice period as mentioned under the lease, you shall be liable to pay an amount equivalent to rent for such period of notice.

In case if you are a tenant, you can send a notice to end tenancy to the landlord. This will help to sort out any outstanding bill or payment and will help you to vacate the property without any hassle. In case if you are the landlord, you can send an eviction notice to the tenant to vacate the property for multiple reasons including, the expiration of the lease, non-payment of rent, violation of the lease agreement, etc.

Either party can terminate the lease if the other party fails to comply with the lease agreement or has committed a material breach of the lease. The parties can also terminate the lease with the consent of both parties.

7. General Rules and Policies

Apart from the aforementioned clause, the terms like inspection rights of the landlord (inspection of the property with or without prior notice in stipulated time), obligations of landlord and tenant in general, insurance (who will be responsible for taking the insurance), and other special conditions can be mentioned under the lease deed.

What happens if someone breaches the Lease Agreement?

In case the lease deed is violated by either party, the other party can resort to the following options:

1. Legal Notice

In most cases, a legal notice from a lawyer will suffice to solve the issues. If you have a solid lease deed, the lawyer can rely on the same and help you protect your rights under the lease and applicable laws. In case if the tenant has failed to pay the rent on stipulated time, you can send a late rent notice to remind them of rent payment and the consequences of not settling the account.

2. Vacation of property

If your tenant is not vacating the property after the expiry of the term or termination of the lease deed, as a first step, you can ask the tenant either directly or through a court order to vacate the property. Thus, in this case, you can ask the tenant to vacate the property by sending them a personal eviction notice or a legal notice through an advocate. The second option is to file a complaint in a competent court of law and get a court order to vacate the tenant from the property.


If you are planning to lend your property to someone for residential purpose, it is always better to have a well-drafted residential lease deed. In India, the rights of tenants and landlords are protected under various law including Rent Control Acts of concerned states and general contract laws under the Indian Contract Act 1872.

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