Penalty Clause In Rental Agreement

If one person is liable for the contract, the other party has the right to seek damages to place it in the position in which they would be if the contract had been executed as intended. A punitive clause is therefore only fair if it is intended to reimburse the lessor for the actual costs incurred by the tenants for non-compliance with the tenancy conditions. A rental agreement guarantees you that you later have a reference in case of a problem between you and your landlord, which is why it is important to be careful with the clauses contained in the agreement. Here are some clauses to make for the lease. Also clarify the prohibition period during which neither the tenant nor the landlord can terminate the contract and make sure it is also mentioned in the contract. “The agreement should clearly mention the consequences of the termination by one of the parties before the end of the lockout period,” said Rajat Malhotra, a partner at Laware Associates, a Delhi-based law firm. As a general rule, if the tenant has to evacuate the house before the end of the prohibition period, the deposit is cancelled by the landlord. If the landlord wishes to evacuate the house before the expiration of the prohibition period, he must compensate the tenant in addition to the actual repayment of the deposit by paying an amount equal to the deposit. RENTAL WATCH: The nine provincial rental units are responsible for claims of unfair practices between landlords and tenants of residential leases. While the CPA doesn`t say whether landlords should include a termination clause in their leases, it`s a good idea to have one in writing, Kara says. For example, agreements often provide a fee when a tenant is not granted an appointment. This is only fair if the clause provides that the lessor or his representative is also liable to the tenant if he does not participate in an appointment.

Case Analysis In Ip Ming Kin, supra, the complaining tenant (“tenant”) had tried in December 2009 to lease the surfaces of the defendant landlord`s store (“owner”). They entered into a lease in a standard Form in Chinese, according to which the landlord agreed to rent the store for 12 months at a monthly rent of 17,300 HK to the tenant. At the end of the tenancy agreement, two clauses have been inserted in Chinese and, if translated into English, the tenant must pay 10 months` rent in advance and the landlord is required to compensate double the rent if he is unable to deliver the free property to the tenant on March 15, 2010 (the “compensation clause”). The tenant was also required to pay two months` rent as a rental deposit.

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