Things to check while opting for co tenancy
Aug 26, 2013
Source : The Economic Times


MUMBAI: In 2007, when Mumbai-based PriyaVenkatramani saw an advertisement on a social networking site, she thought it was the answer to her prayers. "I was working in south Mumbai and was looking to share a flat since I could not afford one in central Mumbai due to the high rentals," says the 26-year-old. "So the ad for a female roommate in the same area seemed like a timely break for me," she adds. All Venkatramani had to do was pay around Rs 15,000 as her share of deposit money to the roommate, and Rs 6,000 as her share of rent.

However, it took barely two days before the trouble began. "Suddenly, my roommate started having problems with me. The situation deteriorated to the extent that I wanted to leave the place within the first five days," says Venkatramani. However, her roommate refused to return the deposit money, claiming that it had been forfeited since she had not stayed for the stipulated period of one year. "Though I contacted the local police, they could not help me and told me to approach the courts in order to address my grievances," she adds. Since she did not have any legal documents to back her claim, her friends advised her against taking any legal action and she complied, losing the entire amount in the bargain.

What can you do to avoid being in a similar situation? We spoke to several experts to find out about the things you need to consider.

Landlord's nod

According to advocate Rajan Hiranandani, a Mumbai-based real estate lawyer, the first thing one should check while going for cotenancy in a leased property is whether the arrangement for shared accommodation has the consent of the landlord. "The person who wants to stay as a co-tenant in a rented property must verify with the actual owner whether he has agreed to a co-tenant. Often, a tenant who cannot afford the entire rent keeps a co-tenant without the knowledge of the landlordand the housing society to share the cost. This, however, is completely illegal," he says.


Documents that are needed for a lease agreement

In such a scenario, points out Hiranandani, the co-tenant will not have any legal rights if there is a dispute. "However, in the case of a family that is living in the leased house, individual agreements with the landlord are not necessary," he adds. According to advocate Vinod Sampat, president of Cooperative Societies', Residents and Users Welfare Association, a verbal confirmation from the landlord in question won't be sufficient; the lease agreement should specifically mention co-tenancy. "The landlord needs to declare in the agreement that the property would have more than one tenant and the rental amount that the tenants would need to pay. The co-tenant also has to submit all the documents that are required for the necessary verification to the landlord," he says.

No-objection certificate from the housing society

It is important to remember that the housing society in which the property is located also needs to give a separate noobjection certificate to all the cotenants. "If there are three tenants in the house, the society will need to furnish a separate certificate to each. Moreover, distinct police verification would need to be done for each tenant as mandated by the law," says Ravi Goenka, high court advocate at Goenka Law Associates.

To enable this, separate police verification forms would need to be filled for all the co-tenants and submitted at the local police station, along with documents such as PAN cards, lease agreement and address proof. Police verification eliminates the risk of landing tenants with criminal backgrounds. The copies of these certificates would then have to be submitted at the housing society office.

Registering the agreement

According to Goenka, the lease agreements should be notarised and registered at the deputy registrar's office. "If the tenant is planning to stay in the property for more than a year, it is mandatory to have it registered.

Doing so offers legal security to the landlord in case of any dispute, say, when the tenant refuses to vacate the property," he says. The landlord needs to register the lease agreements of all the co-tenants concerned.

Shared liability

Sharing the rent burden also means shared responsibility for the property. In the case of damage, the liability needs to be borne equally by all the co-tenants, unless specifically mentioned in the lease agreement. So, if you have a lower share of the rent for a smaller room and are eligible to a proportionate share of liability, make sure your agreement clearly states this.

Tax benefits

A co-tenant in an apartment without a valid agreement also misses out on the tax benefits, which he could have received by way of house rent allowance deduction. You will need to submit copies of the rent agreement and receipts to avail of the deduction. Also, if the rent is more than Rs 1.8 lakh per year, the landlord's PAN card will also have to be submitted. If the rent paid is not availed of as deduction, the co-tenant also has the option to claim it while filing his tax returns.


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