Properties, Homes & more

A rental agreement is for short tenancies, usually for 30 days which automatically continues once this period is over, unless the agreement is terminated. In a rental agreement, the landlord can choose to amend the mentioned terms as long as he provides written notice to the tenant. However , the tenant has the right to occupy the property for a specified period at fixed terms, usually 11 months, in case of a written lease. However, unlike a rental agreement, a lease has to be renewed.

Please find below a list of important points that need to be thought upon, before taking a property on rent:

1. A tenant should know the prevailing rental rates in the chosen location and be aware that only an airtight rental agreement that transparently outlines his rights is acceptable. For example, it should be clearly mentioned who will pay the tax after mutual agreement between the landlord and the tenant. Also, a tenant should be aware that the landlord’s permission is required before initiating any major changes to the property.
2. The tenant should be wary of a clause allowing for automatic rent increases, arbitrary amendments to the existing terms of the agreement by the landlord, and any provision that permits the landlord to enter the property at any time.
3. The agreement or lease should be filled out by the tenant, or in the presence of the tenant.
4. There is no stipulation on the amount of security deposit to be paid by the tenant. It’s a commercial term determined between the two parties. Hence, the time to safeguard one’s safety deposit is before moving in.
   • Security deposit should ideally be paid in cheque to ensure that the same is reflected in their bank statements. Also, legal assistance should be sought to ensure that a proper clause stating that the security deposit would be refunded at repossession by the owner. There should also be a clause in the leave and license agreement of interest penalty on the outstanding security deposit amount in case the amount is not refunded. In such cases, the agreement should clearly highlight if the advance would be adjusted with the first or last few months of the lease. In case of security deposit, the amount and terms for its return should be mentioned.
5. The name of the landlord should be clearly mentioned in the property documents. The property papers, which include the occupation certificate and title deeds, should be in order.
6. The tenant can seek a copy of these papers if needed. If the landlord has carried out an illegal extension within the house, a tenant has to take a written record or have the landlord mention the same in the agreement . There is no such norm that the tenant should possess these documents. However, it’s in the best interest of the landlord and the tenant to have everything in written.
7. Similarly, if the property has any lien such as loan, then the lender should be involved in the transaction between the landlord and the tenant for the transaction.

Continued from Part 1…

There are many important points to be looked into before signing on the dotted line… In this 2-part series, I will cover 9 important points that must be carefully considered.

1. Look deep in your wallet before deciding the property
2. Look closely at your lifestyle and financial capabilities
3. Evaluate market conditions
4. Higher loan amount increase burden of debts

(Please refer Part 1 for discussion on these 4 points)

5. Increase the down payment When you go for home loan, you have to pay around 10% to 15% of the project cost and around 85% to 90% is funded by the bank or financial institution. If you have more than the required amount for ‘down payment’ then pay more, so that your required debt is reduced significantly.
6. Prepayment is the best way to save on interest Always make an effort not to extend a loan beyond its tenure. As and when you have excess cash, try to prepay (huge loan first). For example, you could prepay from your yearly bonuses or salary hikes. Prepaying can lower the tenure and help you save on interest. However, check with your bank from when you can start prepaying, as banks usually do not allow prepayment during the first year of the loan period. Also check if there is a prepayment penalty. The idea is to make sure that the interest saved does not exceed the prepayment fees.
7. It is not a family bank, unlike family doctor It is not essential to opt for the same bank that your brother took his home loan from. It is advised that you should do your own searching in terms of the deals offered by different banks. Moreover, your brother’s offer for the same loan amount and tenure could be (and mostly, would be) different from what is offered to you, as it varies according to the credit profile of the borrower.
8. Processing fee If you have nothing in writing from the bank, it is possible that you might lose the processing fee that you pay to bank in case the loan does not get approved. So, either you get something in writing from the bank or factor in all this money for these kinds of losses.
9. Read the home loan agreement (fine print) carefully Most of us just close our eyes and sign on the dotted line. What we forget to read are the clauses that are in fine print in the loan agreement. You need to understand the significance and impact of these various clauses before you sign the agreement. Important clauses to watch out for are: the Force Majeure clause and Reset Clause on Fixed Rates.

So you have finally decided to buy your own house… With this single decision follows a chain of other decisions, ranging from choosing the property, choosing a home loan offer to deciding the furniture for the new house. However, believe me this is not as simple as it sounds… There are many important points to be looked into before signing on the dotted line… In this 2-part series, I will cover 9 important points that must be carefully considered.

1. Look deep in your wallet before deciding the property Now that you have set your heart on a house that is perfect for you, have you carefully thought of whether your wallet will be able to handle the cost of your dream home? Going for a house that you can’t afford to pay for is like eating more food than you can digest. You end up with indigestion, and in this case the indigestion may cost you dearly!
2. Look closely at your lifestyle and financial capabilities Plan for an unfortunate eventuality like loss of job or illnesses and ensure that your wallet will be able to take the pinch for a few months at least. Pay attention to your other debt liabilities before going in for the home loan.
3. Evaluate market conditions Understand the real estate market and evaluate if the property prices are stable and not likely to fall further. Do your research on home loan interest rates, see if they are likely to decrease or increase in future depending on the existing market conditions, you may not want to lose out on a good deal because you jumped in too early.
4. Higher loan amount increase burden of debts Having high credit card outstanding and a number of other loans not only brings the eligibility for higher loan amount down, it also increases the burden of paying all of these debts off.

Concluded in Part 2.

<< Government came to the rescue of CHS members

In the new amendment in the Maharashtra Cooperative Societies Act Clause, the onus of the co-operative housing society (CHS) lies on the secretary. Every committee member is required to execute an indemnity bond within 15 days of taking charge of the office. The committee members are also accountable to the residents and it’s time they pulled up their socks…

Although the judgement gives a strong message to office-bearers of housing societies, many believe it is sketchy. How many times will you keep filing a case for minor issues? In the earlier case, the problem of the lady was that she got no response to her letter from the secretary. Slapping a fine of Rs. 7,000 does not solve the problem. Instead of approaching the court, one should first treat the problem within the byelaws or go to the registrar, try other alternatives, not to forget the RTI act and also give the committee members’ equal chance to justify themselves.

One has to understand that the very concept of a co-operative society is to come together and work for the betterment of the society, says consumer advocate Anand Patwardhan. “If the secretary has not replied, the message is clear and there are thousands of letters that keep coming. By writing a letter one does not become a consumer, so where is the question of deficiency of service? This is hampering individual liberty. And considering the fact that the secretary is not even paid for the work he does, slapping him with a fine is not justified.”

The housing society committee members work on an honorary basis. If you are not comfortable with the work of any committee member, you have the option of passing a vote of ‘no confidence’ against them. The society is like a family where people stay together. There are various ways to put a check on the actions of the committee members but it is definitely not a commercial venture to ask damages. It is important to see things with a wider perspective.

The order may have got a mixed response but it has managed to ruffle some feathers, bringing respite for residents of co-operative societies and also striking a warning bell for the committee members with regards to their duties and responsibilities.

This could bring a ray of hope for numerous residents who have been struggling to get a proper response for their grievances from the office-bearers of co-operative housing societies (CHS). The committee members of a cooperative housing society (CHS) are accountable to the residents. The CHS secretary may now end up paying through his nose for any poor service rendered to the residents.

According to the new amendment in the Maharashtra Cooperative Societies Act Clause 73 (1 AB), the onus of the housing society lies on the secretary. Section 73 of the Act also states that every member is required to execute an indemnity bond within 15 days of taking charge of the office, acceptance of which makes the committee members accountable for all actions taken on behalf of the society.

In the recent case of senior citizen Madhuri Gujar, the Central Mumbai District Consumer Disputes Redressal Forum slapped the secretary of Chandra Bhuvan Cooperative Housing Society with a fine of Rs. 7000 for not replying to her letter asking for the nomination of an associate membership and deemed it as ‘a deficiency of service and negligence of duty’ under the Consumer Protection Act 2005.

According to the byelaws of the cooperative society, the secretary and the committee members are liable to perform their duties in good faith. Giving her reaction, Manjushri Patwardhan, panel auditor for Maharashtra state, Raigad division says, “There are many cases where the housing society committee members don’t perform their duties on time and harass the residents. It is good that the court is finally taking some action to redress the grievances of the residents instead of turning a blind eye and giving dates every time. Bringing along a monetary fine will ensure the secretary doesn’t get away and does his duty on time or exerts the necessary pressure on the committee members to act collectively. thereby attending to the heap of residents’ complaints that go unattended.”

In most housing societies, committee members are elected without even realising the depth of their responsibility. It is the duty of the secretary to respond to the official correspondence in time and convey his reply to the respective residents. There are cases where the secretary even refuses to acknowledge the receipt of a letter and sends it back to post. The Government is equally flippant about society matters and sometimes going through the registrar also does not yield any results because the officers keep changing.

Flip side of this judgement >>