Leasing Your Home To Companies? Mind This
Corporate leasing is popular among those real estate investors who own properties in different locations or countries. Apart from the fact that is a source of steady, corporate leasing also more convenient from the landlord's point of view. For instance, an NRI (non-resident Indian) would prefer this mode rather than getting into the hassle of tenant verification, etc — things that can be taken care of only if your property is close to the place of your own residence.
However, landlords shouldn't miss out on certain points while leasing out their home to companies as the entire deal includes formal documentation of clauses and conditions. These clauses need to be formed keeping in mind the requirements and interest of the company as well as the landlord.
Here are few other things which you should keep in mind in this regard:
Do negotiate the rental value of the property beforehand according to prevailing market prices. Also, add a clause about a 10 per cent annual hike in the monthly rent in the rental agreement.
The renewal & exit
It is important to understand the requirement of renewal and exit clause in the agreement. Lay down your conditions on which you can demand the company to vacate the premises. Similarly, terms of renewal should also stand clear to both the parties. For instance, both the parties should agree to the renewing of the lease. Only then the renewal should happen or extended to a certain period.
The furniture and fixtures
If you are leasing out a furnished unit, factor in the cost of rent of furniture and fixtures. You can also include it into the total rent or can keep it as a different cost to negotiate as suits your budget.
The security deposit
Corporate leasing involves huge amount to be deposited as security money. While the property maintenance and minor repairs are the responsibility of the renter, you should also mention in the agreement that the security money will have to be returned or adjusted during the notice period. The notice period can vary from one to three months.
The likely damages
Mention the definition of damage and conditions as well as compensation to be paid if the property is found damaged. Also, claim the right to deduct the suitable amount from the security deposit if the property is not found in a satisfactory condition.
As most of the companies lease accommodations through consultants, it is easier to deal with a professional as clauses are clearly spelt and utmost care is taken that interest of either party is not harmed.
Also read: Tenant Problems That Landlords Face