Important 8 Point Checklist Before You Rent a Flat in Mumbai
Most home buyers are who rent a flat in Mumbai know that it wasn’t an easy task. A lot of Expats and Non Resident Indians (NRIs) relocating to Mumbai are unaware about the basic details on how to rent a flat in Mumbai. Unlike most of the major cities in western countries, renting a flat in Mumbai is a bit tricky. In Mumbai you are dealing with individual property owners and not professionally managed apartment complexes. There are several things you need to know before you meet the owner. Be ready with this important checklist when you are sitting down with the property owner at the time of negotiations.
Decide what is the maximum rent you want to pay for your Mumbai apartment. Keep in mind that most Mumbai property owners keep a margin for negotiations. This is basically between 5% to 10%. If the flat was rented previously, then the property owner will expect the last rent received as the minimum rent. By the way, the word ‘Rent’ in Mumbai is NOT used anywhere in the agreement. It is called a ‘Leave and License Agreement’. You will be the ‘Licensee’ and the land lord is the ‘Licensor’.
The rent deposit ranges vastly. It is calculated in multiple of the rent. It ranges from 3 months rent up to 6 months rent. So if your rent is Rs. 50,000 then the maximum deposit amount will be Rs. 50,000 x 6 = Rs. 3,00,000 (Rupees Three Lacs or Rupees Three Hundred Thousand). On an average, for South Mumbai and premium suburbs, deposit for a semi furnished 1 Bedroom flat is Rs. 1 Lac, 2 bedroom flat is approximately 3 Lacs, a 3 bedroom flat is approximately 5 Lacs. The more amenities & appliances you get in the flat, more will be your rent deposit.
This means the total duration of the stay. You have the choice of renting your flat in Mumbai for a minimum of 1 year and a maximum of 5 years. A 1 year rent agreement in Mumbai is calculated as 11 months and not 12 months. It is unusual to calculate 1 year in 11 months and not 12 months. The origin of this strange calculation is unknown.
4. Lock In Period
This term refers to the time duration where you cannot break your rent agreement. In Mumbai if you leave your flat within the lock in period, then be ready to pay heavy penalties. You are liable to pay rent for the balance of the lock in period. In most cases, the land lord will deduct rent of the balance of the lock in period from your deposit.
5. Notice Period
This is the time period in which you will give notice to vacate the flat. In normal cases it ranges from 30 days to 60 days. This can be negotiated. It is good to have a minimum of 30 days. It is reasonable enough time for you to find another accommodation. The land lord will also be able to find another individual to rent out his flat.
This is a touchy point for some land lords. The rent prices in Mumbai are expensive. Land lords do not like to leave their flats empty for longer times. It is loss of rental income for them. They will always try to get you to rent the apartment as soon as possible. In some cases you might need immediate possession of the flat. Other times you will need a minimum of 30 days. This can be negotiated with the land lord.
Just like all other major metropolitan cities, Mumbai has a huge parking problem. Some flats will come with parking, some without parking and some with paid parking. In some building societies, owners are allowed to park their vehicles for free. However, parking for rented flats, may incur additional charges. Clarify in advance if there are any parking charges. Negotiate with the property owner if he is willing to pay for any additional parking charges. He probably will not agree to it, but there is no harm in asking. Make sure to visit the parking spot! Figure out what type of parking is it? There are various types of parking spots in Mumbai. Stack parking, stilt parking, podium parking and open parking to name a few.
8. Type of Rent Agreement
There are two types of rent agreement – ‘Company’ lease and ‘Individual’ lease. If the rent agreement is going to be signed by your company’s authorized signatory, then it is called a ‘Company’ lease. If you are going to sign the rent agreement, then it is called an ‘Individual’ lease. Your company might give you a “House Rent Allowance’ (HRA), but they might not sign the rent agreement. This is also called an ‘Individual’ lease. The owner might ask you for a ‘Comfort’ letter. It is basically proof that you are working for the company you claim to. The ‘Comfort’ letter could be your appointment letter or your last pay stub. This is easily provided by your company’s HR Department.
These 8 sum up the major points. Besides these 8 points, there are some miscellaneous items such as property maintenance and property tax. They are always borne by the land lord. On the other hand, consumables such as electric, cable TV are borne by the tenant. All you need are these 8 points in mind before meeting a Mumbai property owner. They will prepare you in negotiating with the land lord.