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If you have a house, flat, shop or commercial property and want to earn regular income by renting it out, then this is a great option. But a little carelessness and ignoring the paper formalities can lead to huge legal and financial troubles for the landlord. In many metros and small towns of the country, such cases keep coming to light where tenants with false identities take houses on rent with the help of fake documents and are later found involved in illegal activities, illegal occupation or crimes.
As per the clear guidelines of Indian law and police administration, it is the primary legal responsibility of the landlord to thoroughly verify the citizenship, identity, permanent address and background of any unknown person before handing over his property. If any negligence is found in the verification of a tenant, then by law the landlord can also be taken under investigation.
It is mandatory for any tenant to submit self-attested photocopies and originals of all the required documents given below before handing over the keys and signing the agreement:
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1. Government Photo Identity Card (Aadhaar Card / Voter ID / Passport): It is mandatory to take at least two identity proofs of the tenant i.e. Aadhar Card, Voter ID Card, Passport or Driving License. Be sure to immediately verify the authenticity of the Aadhaar card online through the UIDAI portal or QR code scanner.
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2. PAN Card: It is necessary to obtain PAN card of the tenant under financial transaction and TDS rules. This provides accurate tax identity and financial record information of the tenant.
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3. Proof of current job or business (Employment / Student Proof): If the tenant is working in a company, then definitely ask for his company’s official ID card, joining letter or salary slip of the last 2 months. If the tenant is a student, take his/her valid college/university ID card and contact details and identity proof of his/her parents.
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4. Permanent Address Proof: Take a copy of the tenant’s home town (Permanent Native Address) certificate, electricity bill, ration card or passport so that his native residence can be contacted in case of any emergency or legal situation.
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5. Passport size photograph and references from two local witnesses: Take at least two recent passport size color photographs of the tenant. Apart from this, take two references (name, address and active mobile number) in writing from a senior colleague in his office or an acquaintance living in the city.
Many landlords, to save time and hassle, do not conduct police verification of the tenant, which is a punishable offence.
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Indian Judicial Code/Section 188 of IPC: An FIR can be lodged against the landlord for disobeying government orders. If your tenant is found involved in any criminal case or anti-national activity and you have not got him police verified, you may be accused of unknowingly harboring a crime.
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Easy facility of online verification: Now in almost all the states (like Delhi Police, UP Police’s ‘UPCOP’ app, Maharashtra Police Portal, Bihar Police etc.), the online police verification of the tenant is done at home through the portal and mobile app for free or at a nominal fee. The landlord just has to fill the form and upload the tenant’s documents.
The biggest mistake is to give a house on rent based on word of mouth. Always prepare a valid rent agreement (kiranama):
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Why 11 month agreement?: Under the Indian Registration Act, 1908, it is mandatory to register a lease agreement for a period of 12 months or more in the sub-registrar office and pay stamp duty. The 11 month agreement is easily made through a notary.
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What should be the conditions in the agreement?: Monthly rent, security deposit, responsibility to pay electricity and water bills, maintenance charges, notice period (minimum 1 month), annual rent increase (5% to 10%) and a clear condition of not vandalizing any part of the property should be mentioned.
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Complete ban on sub-letting: Make it clear in the agreement that the tenant cannot sub-let (further rent) the property to any third person without your permission.
Landlords should strictly follow these practical rules to keep their property safe:
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Take fare through bank transfer only: Always accept fare through UPI, NEFT or cheque. Avoid taking rent in cash so that you have a solid record of legal bank transactions.
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Inspection of property at regular intervals: Inspect your house at least 2 to 3 times a year with prior notice to ensure that no structural damage is being caused to the property.
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Timely Agreement Renewal: Get a new rent agreement made before the completion of 11 months. Don’t let anyone hold on to old expired agreements.
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Security Deposit Receipt: Document the advance or security deposit to be taken from the tenant in writing and make clear the condition of compensation for wear and tear at the time of eviction.