How to finalise a house rent agreement in Nepal? Here’re the basics

monetary policy - real estate
Photo: Max Pixel

Disputes between tenants and house owners in urban areas are a common problem in Nepal. But, a simple agreement can solve them. Further, the agreement is also rendered necessary by the law these days for various matters such as rent tax.

However, many landlords and tenants are unaware of the house rent agreement to be concluded between them. But, do not worry. We will have you covered. Here are the things to be considered while preparing a house rent agreement.

Legal provision

As per section 383 of Civil Code, 2017, a person who has right, possession or ownership in a house lends, for rents, the house to another person to use it for a certain period of time.

However, it is not necessary to enter into an agreement in writing with the tenant if the monthly house rent does not exceed Rs 20,000.

Period for house rent

The period of house rent shall be explicitly mentioned in the housing agreement. The period of the house rent shall not exceed five years.

However, if a house is rented for a commercial purpose, the period shall be as set forth in the agreement without considering the maximum limit of five years. Upon the expiry of the period of house rent, the period may be extended with the consent of the house owner and the tenant.

Photo: Pixabay

Things to include while conducting agreement

While making a house rent agreement, the owner shall enter into a written agreement setting out the following matters:

  1. Full name and address of the owner and of the tenant, their citizenship numbers (or passport or identification certificate, in the case of a foreigner)
  2. Place and plot number of the land where the house is located
  3. Purpose for rent (Commercial/ personal or residential)
  4. Date of commencement of rent
  5. Validity period of rent
  6. Monthly rent amount
  7. Time and mode of payment of rent
  8. Liability to pay tariffs of electricity, water supply, telephone etc used in the house
  9. Matter on payment of house rent tax
  10. If the rented house is to be insured, matter relating to it
  11. Matter on leaving the rented house and eviction of the tenant from it
  12. Matter as to whether the rented house can be sub-leased to another, and
  13. Other necessary matters

Responsibilities of the house owner

The responsibilities of the house owner shall be as follows:

  1. To allow the tenant to use the house in accordance with the agreement
  2. To arrange water and electricity supply, sewerage and sanitation in the rented house as may be required, except as otherwise provided for in the agreement
  3. To prevent the tenant from insecurity, harassment or unrest from other persons dwelling in the house
  4. To abide by the other matters set forth in the agreement

Responsibilities of the tenant

The responsibilities of the tenant shall be as follows:

  1. To pay the rent to the house owner within the specified period
  2. To maintain sanitation in, take care of, protect and safeguard the rented house properly and reasonably, as if it is his or her own
  3. Not to do any act such as causing unrest, harassment or insecurity to the other dwellers in the house or neighbours
  4. To abide by the other matters set forth in the agreement 
Photo: Pixabay

Repair and maintenance of the rented house

Except as otherwise explicitly mentioned in the agreement, the tenant shall be obliged to repair and maintain the rented house, as required.  If the agreement provides that the house owner is obliged to repair and maintain the rented house and it is necessary to carry out any repair and maintenance of the house, the tenant shall give notice in writing to the house owner on time.

However, if the owner fails to repair and maintain the rented house despite the notice, the tenant may repair and maintain such a house. The expenses shall be deducted by the tenant from the rent payable to the house owner.

Provisions relating to sub-lease

The agreement entered into with the house owner provides that the tenant may sub-lease the whole or any portion of the house rented by him or her to another person. 

Whenever the tenant sub-leases the house rented to another person, the tenant shall, no later than 15 days, give information in writing, indicating the name and address of the sub-tenant to the house owner.

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Regmi is an advocate associated with Associates Hub Law Firm.

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