What Is an Indiana Lease Agreement
Indiana Lease Agreement is governed by Indiana landlord tenant law and Indiana lease laws. Under this agreement, the tenant is permitted to use the property belonging to the landlord or the property management company. The use of this property is permitted only upon payment of specified rent as determined in the agreement between the parties.
The agreement only intends to provide the use and possession for the property, and no ownership right is being transferred by virtue of the agreement. Although the lease agreement may confer some other rights like subletting, modification, etc. In order to enjoy these rights, a specified sum called rent is paid.
Parties Involved:
Under the Lease Agreement, the following parties are involved:
- Landlord or Property Management Company: The person or the company to whom the leased out property belongs is called the landlord or the Property Management Company under the Agreement. He/ She is the owner of the property. Upon receiving a specified rent by the tenant, the landlord grants permission to the tenant to use the leased out property.
- Tenant: Under the lease agreement, the Tenant is the person who is granted permission to use the property upon payment of specified rent. The right to and possession and use of the property are given under the lease agreement.
Purpose of Indiana Lease Agreement
The Lease Agreement is prepared keeping the following purpose in mind:
- The Lease Agreement helps those who are unable to make a huge capital expenditure to avail the benefit of property at a lesser expense.
- A well written Lease Agreement clearly lays down the rights and responsibilities of both landlords and tenants.
- After the Lease Agreement is negotiated and signed between the parties, it becomes binding on both of them. Both the parties are bound by the Agreement.
Key Terms of the Indiana Lease Agreement:
A well drafted Lease Agreement should include the following things:
- Identification of Parties: The Lease Agreement should clearly identify the parties to the agreement and shall provide all details regarding parties.
- Date of Commencement of the Lease: The Lease Agreement should provide for the date of commencement of Lease Agreement. It should determine the date on which such lease agreement shall become effective.
- Date of Termination of Lease: The Lease Agreement should also provide the date on which lease shall terminate or come to an end.
- Term of Tenancy: The Lease Agreement should also provide for the entire term of the tenancy.
- Payment of Rent: The Lease Agreement should determine priory about the rent, which is to be paid for the right to use or possession of the property.
- Security Deposits: The Lease Agreement should also lay down the security deposit needed to be submitted beforehand and the situations in which the security deposit shall be forfeited.
- Assignment and Subletting: The Lease Agreement should also provide complete details about the situations when the right to subletting and assignment is available to the Tenant.
- Possession of Premises: The Lease Agreement should also provide for the time when the possession of the premises shall be transferred to the tenant.
- Conditions of Tenancy: The conditions such as the maintenance of property, cleanliness, etc. are to be provided by the Lease Agreement clearly to avoid future conflicts.
- Damages, Repairs, etc.: The Lease Agreement should also provide for damages, repairs, etc. to be made to the leased out premises by the tenant.
- Dispute Resolution: The mode of dispute resolution, venue, time, etc. of dispute resolution should also be stated in the Lease Agreement to avoid future conflict. Typically, Indiana and Indiana tenant laws should be made applicable.
Drafting an Indiana Lease Agreement- Points to Be Considered:
Following points needs to be considered while drafting an Indiana Lease Agreement:
- Details of Parties: The Lease Agreement should contain the proper name and address of the parties to the agreement. It should provide complete information about the parties to Lease Agreement.
- Date of Commencement of Lease: The Lease Agreement should also provide for a date when the lease period will commence.
- Leased Property: The Lease Agreement should provide complete details about the property, which is to be leased.
- Mode of Rent Payment: The mode of Payment of rent should also be pre-determined while entering into a lease agreement.
- Condition of Tenancy: The Lease Agreement should clearly lay down the condition which will govern the tenant. The Tenant needs to adhere to these conditions in order to make the tenancy valid.
- Dispute Resolution: The mode of dispute resolution, venue, time, etc. of dispute resolution should also be stated in the Lease Agreement to avoid future conflict.
- Indemnification and Warranty: The Lease Agreement should clearly lay down the indemnification and warranty given to the landlord or tenant.
- Due Diligence: The tenant, before entering into the Lease Agreement, should find out who is the actual owner of the property.
Negotiating Strategies:
A Lease Agreement should be well negotiated by keeping the following strategy in mind:
- Rent: The Tenant should compare the market value of a similar property while entering in the Lease Agreement. The Tenant should take a rough idea about whether the lessor is charging extra fare or not.
- Landlord’s Rule: The extent of the right of the landlord should also be negotiated on leased out premise. There should be sufficient restriction on the right of a landlord to enter a leased premise or eviction without just reason.
- Just and Equitable: The agreement should be negotiated in such a manner that the terms of the agreement conferring various rights on parties appear just and equitable to both the parties without prejudicing the interest of any party.
- Non-Monetary Benefits: The Tenant should also negotiate the Lease Agreement in such a way as to confer non-monetary benefits on the tenant.
- Inclusive: The Lease Agreement should try to address all issues, which is possible. It should be inclusive.
Benefits and Drawbacks of Indiana Lease Agreement:
Following are the advantages of entering into a Lease Agreement:
- Certainty: The Lease Agreement is for a fixed period of time. It is certain and provides certainty of rights and duties to the tenant and landlord.
- Clarity: Entering into Lease Agreement should provide clarity on various issues that may arise in the exercise of the rights conferred under the Lease Agreement.
- Low Capital Expenditure: The Lease Agreement helps in availing the benefits of property at a lesser expense, which involves huge costs when purchased.
- Tax Benefits: The Lease Agreement also helps in securing Tax Benefits as no Capital Expenditure is made.
- Better Usage of Capital: The capital can be employed for other purposes when it is not incurred on acquiring the property.
Following are the Disadvantages of entering into a Lease Agreement:
- Binding: The Lease Agreement Indiana binds the tenant to the premise for a specified time, which may not be in the interest of tenant.
- Expensive: The Lease Agreement turns out to be a costly affair for the parties entering into it.
- Limited Access: The lessee is granted limited rights concerning the property, and these rights are not absolute.
- Maintenance of Assets: The Lease Agreement also provides that the lessee is obligated for maintenance of the asset and liable to pay huge damages in case of any loss or harm is done to the asset.
What happens in case of Violation:
Following Remedies are available to the Landlord in case of violation of Lease Agreement under the Indiana rental laws:
- Evict Pre-maturely: The Landlord has the right to evict the tenant before the termination of the agreement in case any default or contravention of terms of Agreement is made by the parties.
- Suit for Rent: The Landlord can also bring legal action for default of rent payment.
- Damages: The Landlord can also claim damages for the loss or ham done to the leased property.
- Lien on Transfer of Property: The Landlord also gets the right of lien on the property of tenant.
- Right to Recover Property by force: The landlord has the right to recover property by force in case of default is made in rent payment.
- Security Deposit: The Landlord can also retain security deposit when there is any harm done to lease out premise or default in payment of rent.
Following Rights are available to Tenant in case of violation of Lease Agreement:
- Damages: The Tenant can claim damages when the landlord breaches the rights of tenant.
- Reformation: The Lease Agreement can also be reformed by the Tenant in case the loss is suffered by the tenant.
- Recession: The Tenant also has the right to seek recession of the Lease Agreement in case of breach of the terms of the Lease Agreement.
One of the benefits of entering into a lease agreement is the clarity and certainty that it provides with respect to the use of the property and the extent of the right to be exercised by the tenant over the property. The Lease Agreement benefits the landlord also. He/ She can employ the property which is lying unutilized into an income generating source. The Lease Agreement, Indiana provides for a certain right in favour of tenant to use the property without any disturbance on the part of the landlord. The lease agreement also helps the tenant to get the benefit of property at less cost. It helps in maintaining the balance of the economy.
Sample for Indiana Lease Agreement
A sample of the agreement can be downloaded from below.
