What are the tenancy agreements in Pakistan?
In terms of safety, investment growth and return on investments the real estate of Pakistan is the most viable investment sector. Most people tend to park their savings on rental properties in Pakistan so that their revenue stream is provided with a stable source of income. You must know a lot about the Landlord and Tenant Law of Pakistan before you purchase a rental property. If the regulation is not taken into account, the rental of property in Pakistan will become a whole bunch of trouble. Here are all you need to know and the many frequently answered questions about Pakistan’s landlord tenancy law. The guide contains tips on the application of the tenancy contract.
Rental agreement details
Rental agreement is a key document that acts as a roadmap to help landlords to establish better relationships with tenants. Rent is a written agreement between Landlord and Tenant that contains all terms and conditions for renting a property. Any period between the parties may be agreed upon in Rent Agreement / Tenancy Agreement. However, if such an agreement is for a year or over, it is registered according to section 17 of the Registration Act, 1908. As a practice both parties agree to an 11 month rental agreement that is not necessary for the submission to the registrar office. This arrangement must be registered according to section 17. There are many details to a valid rental agreement, some of which are important in the following.
- Details of the property owner and the tenant
- Details regarding the premises
- Payment method together with due date
- Tenancy Period
- Annual rate of rent increase
- Aim to rent the buildings
- Securities advanced rental payment
- Bank account details if the bank is the payment method
- Monthly rental receipt
Pakistan’s Tenancy Law
The agreement sets out all terms and conditions which both the tenant and the landlord must comply with. Some limitations laid down in the law include renting fairly based on the local price value and maintenance costs, taxes and the value of the buildings.
The rental agreement is valid until the date stated in the document. When the date is not specified, after receiving the evacuation letter sent by the landlord within a notice period specified in the letter, the tenant may be asked to leave the premises.
The landlord must submit to the authorities this Agreement after both parties have signed the Agreement. The law also stipulates that every year rents are increased by 10%. If not, after every 3 years, it will increase by 25%. The rule applies only if the landlord and tenant did not agree to incremental rents on their terms.
Whenever the landlord fails, the tenant is capable of bringing a complaint before the civil court because he is entitled to do so.
Stay tuned to Pakdial Blog for further advice on the terms and obligations of the rental agreement. Pakdial is an emerging proprietary oriented information and consultation portal in Pakistan. Subscribe to our newsletter for more property-based articles, blogs, news & updates.