With the increasing inflation and property prices in Pakistan, owning a home is becoming difficult. In such situations, renting a property is the most suitable and budget-friendly option. Individuals can live in a proper home, and landlords can earn ample revenue from rental income. However, many tenants are unaware of their rights and sign the agreement before reading it. As a result, most of them fall victim to maligned practices.
Hence, it is essential to have a complete know-how of rent agreement laws in Pakistan to ensure a trustworthy tenant-landlord relationship. Let’s learn the basics first.
What is a Rent Agreement?
A rent agreement is a legally binding contract outlining the major clauses, terms and conditions of renting a property between two parties, a tenant and landlord. The rental agreement can be oral or written, but it is better if it’s written to avoid discrepancies in future. Both parties agree to the contract after negotiation and signing the official document. A rent agreement document is for residential and commercial properties.
In Pakistan, short-term rent is only valid for a period of six months. The majority of residential leases are for either six months or a year. However, the agreement’s duration is entirely up to the parties. If both parties agree to it, they can prolong it.
What are the Rent Agreement Laws in Pakistan?
You need to know that your rights are protected under the rent agreement laws:
- The Transfer of Property Act, 1882
- The Rent Restriction Act, 1949
- The Tenancy Act, 1887
- The East Pakistan Rent Restriction Ordinance, 1959
- Punjab Rented Premises Act, 2009
- The Contract Act 1872
What is Needed to Prepare a Rent Agreement Document?
A rental agreement must be written in Pakistan on stamp paper, which can be obtained from a bank or a vendor of stamps. Go to the courts and file a lawsuit to give the procedure a more legitimate appearance. Depending on the monthly amount and the lease length, different amounts of stamp duty are due on the rental agreement.
Foreigners must show documentation of their immigration registration to obtain a rental agreement. To prepare a rent agreement document, you need to mention:
- Contact information for both the landlord and the tenant.
- An explanation of the location.
- Duration of the lease.
- The due date and how to pay the rent.
- Rent growth rate on an annual basis.
- Intent to rent the space out.
- The total amount paid in advance for rent and security.
- Details of the bank account, if rent is to be paid by bank transfer.
Things to Consider Before Signing a Rent Agreement Law
If you are considering renting a particular property, here are certain things you must consider before shaking hands and signing.
- Ensure you understand the rental agreement’s terms and conditions before signing it. These terms should include the length of the lease, the monthly rent, the security deposit amount, and the upkeep obligations.
- Before agreeing to a rental agreement, the property must be thoroughly inspected. Verify the property for any harm, flaws, or other security or comfort issues.
- Understand your obligations and rights as a tenant. You have obligations and rights. Before signing the contract, be sure you comprehend these terms, including your need to maintain the property in good condition and your right to quiet enjoyment.
- Before signing a rental agreement, confirm the landlord’s credentials, including their name and property ownership. This will ensure that you work with a reputable landlord, not a con artist.
- Ensure that the document contains all information related to the rental agreement, including any verbal agreements you may have had with the landlord. You can avoid future misunderstandings and conflicts by doing this.
- Finally, if you have questions or issues about the rental agreement, contact an experienced attorney for guidance. They can assist you in comprehending the provisions of the contract and defending your rights.
Read More: How to Find the Best Rental Income Property?
What are the Rights of a Rental Agreement Laws in Pakistan?
You should know that you have rights being a tenant or a landlord, that can never be taken away from you.
If you are a tenant,
- Right to a secure and livable environment: Landlords must keep the property secure and livable and make any necessary repairs. In Pakistan, this is seen as a significant tenant right.
- Right to privacy: Tenants have the right to privacy in their living space, and landlords are not allowed to enter without the tenant’s consent.
- Right to peaceful enjoyment: Renters are entitled to take full advantage of the property without the landlord or other renters interfering.
If you are a landlord,
- Right to fair rent: Landlords have the right to fair and reasonable rent in exchange for letting tenants use their properties.
- Right to evict tenants: Landlords have the authority to evict tenants in certain situations, such as when they fail to pay rent or violate the terms of their lease. However, all applicable laws and regulations must be followed during eviction.
- Right to enter the property for inspection: Landlords can enter a rental property for necessary maintenance or inspections, but they must give the tenant adequate notice first.
- Right to a reasonable return on investment: Landlords are entitled to compensation for their financial investments in the property.
Sample Rent Agreement Contract
Here is an example of a rent agreement you can make with the other party:
- The sum of the monthly or quarterly rent payments.
- How much notice (often 30 days) is required before moving out?
- Who is in charge of paying for upkeep, utilities, and other costs of living in the house, such as water or rubbish collection fees?
Additional significant information that should be included in rental agreements include:
- If animals are permitted on the property.
- Is smoking inside the property permitted?
- Visitors are only permitted with prior consent from either party.
- Subletting is acceptable.
- What happens if one party breaks any agreement provision (for instance, if they fail to pay their fair portion of the utilities)? This section may also set forth the consequences of breaking specific regulations, such as late fines.
- What happens if either side decides to terminate the lease early? Usually, this entails paying a penalty fee dependent on how soon the lease expires.
Considerations Regarding the Rent Agreement Laws in Pakistan
In addition to rights, certain elements must be understood and agreed upon to enjoy the benefits in full essence.
A fair rent is a sum assigned to the property based on a number of elements, including its size, condition, and surroundings. Tax rates, the cost of repairs, and general property maintenance are additional elements that go into the final price tag put on the property.
However, the final rent sum that may be determined may differ from the value assigned to the property as fair rent. The final sum might be discussed between the two parties. Depending on the bargaining process, the agreed-upon rent may be greater or lower than the fair rental value.
Rent Agreement Policy
The rent increment policy is viewed differently in different parts of the nation. The country’s cantonment districts have their own rental procedures, while the provinces and the federal capital have laws.
According to KPK, Punjab, and Balochistan rental legislation, landlords can raise rent by roughly 25% of the previous rent. The present lease agreement must expire before this increment becomes effective, which happens after a year.
The increment policy in Sindh is unique from other provinces and uses tenants’ rights in Pakistan. According to the law, landlords are prohibited from raising rent for at least three years after establishing an initial fair rent amount. In addition, the rent increase is limited to 10% of the present sum.
Since Pakistan bases its tenants’ rights on justice and equity, there are specific guidelines for these expenses. According to the rulings, both parties are liable for maintenance and repair expenses. Simple rules apply in these situations.
The tenant is liable for any damage they cause to the property. On the other hand, the landlord is responsible for paying for damage to the property brought on by outside forces like natural catastrophes, leaks, etc.
Subletting the Property
The act of a tenant renting out the home to another person is referred to as subletting. This is often against the law because a tenant cannot sublet the property without the landlord’s permission. You can sublet the property, albeit it must be done via a documented agreement, provided the landlord permits it. Without a written agreement, a landlord may sue you for subletting even if they previously gave you the go-ahead orally.
How to Extend Rental Contract?
The rent contract may be extended if the parties’ terms and conditions are satisfactory. The contract’s renewal saves both parties time and hassle. Since practically everything is contained in the record, the process is quick.
Message to Tenant
The landlord notifies the tenant in writing that the lease is about to expire and requests that it be renewed. The landlord requests a rent increase, considering the market rates and circumstances. The authorities may also request the creation of a brand-new contract.
Meeting with the Tenant
A meeting is scheduled between the tenant and landlord following the note’s delivery. They make decisions on contract changes and renewal procedures.
Addition of New Conditions
As a result of their discussions, the parties eventually agreed on new terms and conditions. The renewed agreement will be subject to these conditions.
New contract drafting
The contract will be renewed once the terms and conditions are written down. The parties agree on minor revisions, and a new contract is created. The tenant may use the residential tenancy agreement up until its termination date.
What are the responsibilities of Tenants and Landlords in Pakistan?
While tenants have rights, they are also responsible for
- Rent payment: The tenant must pay the rent on time and in line with the provisions of the rental agreement.
- Keep the property clean: Tenants are in charge of upkeep, which includes keeping the place tidy and organized and notifying the landlord of any required repairs.
- Obey laws: Tenants are responsible for adhering to any and all laws and rules that may be in force, including safety and health restrictions.
- Respecting others’ rights: Renters must respect the rights of others, especially those of their landlord and fellow tenants.
Landlords also have specific responsibilities. These include,
- Providing a secure environment: Landlords keep the property secure and livable and take care of any required repairs.
- Respecting tenant’s privacy:
- Tenants’ privacy must be protected, and landlords are not allowed entry into the premises without the tenant’s consent.
- Laws and regulations compliance: Landlords are accountable for adhering to all relevant laws and rules, including safety and health standards.
- Returning security deposits: By the provisions of the rental agreement, landlords are required to restore security deposits.
- Respecting tenant rights: Landlords must respect tenant rights and may not obstruct them from peacefully using the property.
What is the Legal Process of Eviction?
Eviction is the act of sending a notice to the tenant to leave the property. This is usually done if the tenant has broken the contract or the landlord wants to evict that tenant without any reason.
- Notice of Eviction: Before beginning the eviction procedure, the landlord must provide the tenant with the required eviction notice, often 30 days in advance.
- Proceedings in court: The landlord may initiate an eviction lawsuit if the tenant does not vacate after getting notice.
- Order of Removal: An eviction order will be issued if the court rules in the landlord’s favour.
- Implementing the Order: A bailiff or law enforcement official must carry out the eviction order
Note: Depending on the particulars of each case and the regulations governing the rental agreement, the legal procedure for eviction in Pakistan may change.
Eviction laws are among the most crucial rules tenants need to consider. A landlord does not have the authority to remove a tenant suddenly and without good cause. However, some circumstances, such as the following, may subject you to eviction under state law:
- Not making the required rent payment on time.
- The landlord does not want to extend the rental agreement because it has expired.
- Using the place for illicit activities.
- Any violation of the terms of the rental agreement.
- The property was sublet without seeking the landlord’s permission.
- The value of the entire property could be reduced due to damage.
Any of the provisions above may subject you to eviction based on Pakistani tenants’ rights. Landlords must give tenants reasonable time to find a new home and a notice of eviction. The legislation stipulates that the renter must be given at least 4 weeks’ notice before being evicted from the property.
The Bottom Line
We hope you have gotten a clear understanding of the rent agreement laws in Pakistan. These laws are designed to ensure a smooth, clear, and quick rental process and ensure a reliable relationship between the landlord and the tenant.
What is Section 22 of the Punjab rented premises Act 2009?
Section 22 of the Punjab Rented Premises Act, 2009 states Leave to contest. (1) A Rent Tribunal shall not allow a respondent to defend the application unless he obtains leave to contest. (2) Subject to this Act, a respondent shall apply for leave to contest within ten days of his first appearance in the Rent Tribunal.
What is Section 24 of the Punjab rent Act?
Section 24 of the Punjab Rent Act states the Right to recover immediate possession of premises to accrue to widows, handicapped persons, old persons, freedom fighters and nonresident Pakistanis.
What is the value of stamp paper for rent agreement in Pakistan?
The value of stamp paper for rent is 500 rupees for a property with a rent of 100,000 yearly. The stamp duty will be 1,000 rupees for a yearly rent of 100,0000-500,000. Moreover, the stamp duty is 2,000 rupees for an annual rental of more than 500,000
What is Section 15 of the premises act?
Section 15 of the Punjab Rented Premises Act 2009 deals with the eviction of a tenant from a rented premises, the tenant cannot be ejected from the rented premises, whether executing a decree or otherwise, except in accordance with the provisions of this act.
What are the rights of tenants in Pakistan?
Tenants in Pakistan have certain rights under the law, including the right to a safe and habitable living environment: Landlords are responsible for maintaining the property in a safe and habitable condition and for making necessary repairs. This is considered an important Tenant Right in Pakistan.
What is fair rent in Pakistan?
Under the tenancy laws in Pakistan, fair rent refers to a reasonable sum that is assigned to private property, by a rent officer. This is fixed keeping in mind the size, condition, and usefulness of the property.