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What is the procedure to refund or collect lease cost from tenant
03-Sep-2023 (In Property Law)
I would like to Lease out my 3BHK apartment for residential purpose for the duration of 3 years. As a house owner, a) Should I collect Lease Cost from the Tenant on yearly / half-yearly basis (or) else how exactly the Lease Cost should be calculated ? b) Should I refund the entire Lease Cost to the Tenant upon expiry of the Lease agreement ? If so, what are all the expenses that the Tenant is supposed to bear ? c) Should I collect any Security Deposit(of-course refundable) separately from the Tenant ? d) Assuming that the Tenant pays the Lease Cost on yearly basis, is there any provision to increase the Lease Cost every year say by 5% or 10% during the Lease period ? Kindly clarify my above all queries in detail. Thanks, Sudhakar Gutala
Hello sudhakar gutala,
In response of query
Yes you can lease out your property.
Collecting the lease amount on annual basis is advisable.
As far as the increase in the lease amount is concerned, you could do that but it's left to the negotiations between the owner and the tenant.
But the increase shld be reasonable.
It's left to the owner to decide whether to keep the entire lease amount on the expiry of the lease period or not.
The expense the tenant has to bare at the time of vacating is usually what ever damages he has done to the property ( I mean if any repairs ),and the last month electrical or water bill if not payed.
Lastly clearly specify all the terms and conditions on which you have entered into in the lease agreement, so that you are safe if any disputes arise in future.
In response of query
Yes you can lease out your property.
Collecting the lease amount on annual basis is advisable.
As far as the increase in the lease amount is concerned, you could do that but it's left to the negotiations between the owner and the tenant.
But the increase shld be reasonable.
It's left to the owner to decide whether to keep the entire lease amount on the expiry of the lease period or not.
The expense the tenant has to bare at the time of vacating is usually what ever damages he has done to the property ( I mean if any repairs ),and the last month electrical or water bill if not payed.
Lastly clearly specify all the terms and conditions on which you have entered into in the lease agreement, so that you are safe if any disputes arise in future.
Helpful?
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Adv. Shreyas A
Bangalore | 25+ Answers
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You can fix the lease amount as per your quoting at present and enter into an lease agreement there should be renewal of lease for every 12 months and can be continued further if you are convenient with the tenant for further period. 5% is the standard hike on rent which you can impose. You have to fix the monthly rent and security deposit if you are interested to take monthly rent. If it is lease you can take the entire lease amount initially while entering into an lease agreement and there is no necessity of security deposit for it. Consult advocate for further needful.
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Adv. Rajesh K.S
Bangalore | 500+ Answers
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