Ritu Mishra, 26, agreed to share an apartment with a friend who was already staying on leave and license. However, when Mishra wanted to leave the place due to a tiff with her friend, the friend refused to return her deposit. To Mishra's misery, there was no evidence on which she could fight or claim her deposit. Reason: The original agreement was in the name of her friend. The landlord had allowed them to share the apartment on an oral consent without filing a fresh agreement between both the tenants.
Vinod Sampat, advocate and property expert agrees that landlords are ignorant when it comes to filing and registering lease agreements. “For instance, most landlords won't bother to file a new agreement if there is an additional licensee (or tenant) to stay in his apartment.”
Landlords want to escape this procedure for two reasons. Firstly, those who don’t want to disclose their rental income in order to evade tax take this route. And secondly, they escape this because it’s cumbersome to draft and register the agreement and also involves some costs (usually up to Rs 2,000 or so).
Hence, make sure you demand a fresh agreement between the landlord and all tenants sharing the same apartment before you move in.
According to Prabhudas Lilladher's real estate report, lease registrations are seeing an increase. “Lease agreements in April 2013 increased by 6% compared to the same period last year.” These registration numbers are those of leave & license agreements of commercial and residential properties.
There could be various problems if the agreement is only in one licensee's name and not shared between other tenants also occupying the flat. It’s your responsibility to get hold of this agreement, as the landlord will be content as long as he is receiving his rent.
You can always complain to the landlord; however, one cannot be rest assured that he will stand by your side as after all he had only given you an oral consent to occupy his house. There are also chances of the room-mate harassing you in the absence of the landlord.
For instance, there are chances the tenant could refuse to release your deposit if you left on a bad note. In this case you will have to forgo your deposit money as you will have no legal documents to back it.
Next, you will not be able to claim tax-deductions by way of house-rent unless you possess copy of a fair agreement. One is required to submit copies of the rent agreement and receipts to avail of this deduction.
Anshuman Jagtap, advocate at Hariani & Company says that there are chances the landlord may not even take every tenant for police verification if he wants to evade tax and not disclose his rental income.
Police verification is mandatory for each tenant, which the landlords may again try to escape.
Experts say, police verification indicates that the tenant comes from a safe background. Hence, this will not only be good for the landlord but also the tenant. Reason: This police verification proof has to be submitted to the housing society and it can help safeguard his character if he is being harassed by any society member with a view to remove him from occupying that house.
Apart from the likelihood of losing the deposit and tax-benefits, you could also face problems when it comes to sharing regular charges of the apartment. Hence, make sure that when you get your final agreement, the do’s and don’t’s related to the property are clearly mentioned. For instance, make sure there are clauses that can result into termination of the agreement, or penalties that the tenants will have to bear in case of any damage to the property and so on.
