Can you cancel a rent agreement?

Homeowners looking to rent out their property and prospective tenants should be aware of the various tenancy laws and understand the legal procedures involved when renting a property. According to the law, the tenant and landlord should sign the rental agreement, and the document should be registered if the tenure is one year or above. A tenant should finalise a property after performing the necessary checks, such as verifying the ownership documents and ensuring the utility bills have been paid. This helps prevent any kind of dispute at a later stage. However, if a tenant wishes to cancel the rent agreement due to any genuine reason, can he do so? In this guide, we analyse whether a tenant or a landlord has the right to cancel a rent agreement and its consequences.

What is a rent agreement?

A rent agreement is a legal contract signed between a landlord and a tenant to initiate the tenancy. The document includes the terms and conditions of the tenancy, such as the tenancy’s start and end date, rent amount to be paid, frequency of rent payment, security deposit, maintenance, termination, eviction terms, etc.

How to prepare a rent agreement?

Gather relevant details

The tenant and landlord should discuss all the terms and conditions, such as lease duration (e.g., month-to-month or fixed-term), rent and security deposit amount, etc. After this, the required details, such as full names and contact details of both the parties (the landlord and tenant), property address, etc., should be gathered.

Documentation

This is the most crucial part when finalising rent agreements. The documents required for a rent agreement may vary depending on the state or location of the rented property. However, some important documents include identity proof and address proof documents of the tenant, passport-sized photographs, proof of income, etc. As per the laws in various states, landlords are also required to get tenant police verification completed. At this stage, the tenants should also ask the landlords for certain documents such as title deeds to verify the property ownership, security deposit c, utility bill payment security deposit, etc.

Rent agreement drafting

A rent agreement should be executed on stamp paper to give it legal validity. The stamp paper value ranges from Rs 50 to Rs 1000, depending on the buyer’s preference. Typically, the stamp paper value for creating an 11-month rental agreement is Rs 100.

Agreement signing

The rent agreement must be signed and dated by both parties, along with two witnesses. The paper should be registered at the sub-registrar office if the tenure exceeds 11 months. If the tenure is less than one year, it may be notarised as per local laws.

Can you cancel a rent agreement?

A rent agreement becomes a legally binding contract once it is signed by both the parties – the landlord and the tenant. Typically, one can cancel a rental agreement before the tenure begins. However, this will depend on the terms and conditions mutually agreed upon by the landlord and the tenant.

Moreover, there are certain points one should remember:

• Early termination clause: Some rent agreements may include an early termination clause specifying the conditions under which one can cancel the agreement before moving into the property. The tenant may also have to pay a fee, or the security deposit may be forfeited.
• Negotiations: If the landlord has not specified any early termination clause in the rental agreement, the tenant can try negotiating with the landlord. Sometimes, landlords may agree to cancel the lease if they are able to find another tenant immediately.

Cancelling a rent agreement after moving in

If the tenant has moved into the property and they want to cancel the rental agreement, they can provide a written notice to the landlord, stating that they want to vacate the property and their intention to cancel the rental agreement. They should submit the notice as soon as possible, which will help prevent disputes later.

Sometimes, cancellation of rent agreements is possible based on mutual consent. It can be done amicably if both the parties agree to cancel the agreement. However, it is better to have this documented to avoid future disputes.

Lease termination vs lease cancellation

Lease termination is a term mostly used for lease end, which can be planned as per mutual agreement between the landlord or the tenant or unplanned due to breach of contract. On the other hand, lease cancellation deals with a more specific scenario where the lease ends prematurely owing to a breach of contract or other reasons.

Reason for cancellation of a rent agreement

• Mutual agreement: A rental agreement can be cancelled after the landlord and the tenant mutually agree to it. This eliminates the chances of any dispute.
• Breach of contract: If the tenant or the landlord violates the terms of the rent agreement, the other party can cancel the rent agreement. This situation could be slightly complex as the other party may try to convince and resolve the issue without cancellation of the agreement.

Who can terminate the rent agreement?

The right to terminate a rent agreement typically lies with both the landlord and the tenant. For example, if the landlord feels the tenant is difficult to handle or uncooperative, they can cancel the agreement and ask the tenant to vacate the property immediately without serving any notice period. On the other hand, if the tenant is facing any issues with the property or the owner, they can notify the landlord and vacate the property. However, both parties must adhere to the terms and conditions of the contract, including notice period clauses.

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To terminate a rent agreement, one must follow the proper procedure and adhere to the terms and conditions agreed upon. This includes serving a notice to the other party and vacating the property. One may end up in a legal situation by not following these rules. It is advisable to approach a legal professional to understand one’s rights and obligations.

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