Let’s start first and foremost with the definition of Lock In Period
→ What is a Lock In period?
It is a time period which is mutually agreed by the landlord and the tenant in which the tenant cannot vacate the property and the landlord cannot evict you from the property.
→ How long should it be?
The lock in period can be anywhere from 3 months to 60 months. However in residential properties it averages around a 6 months to 24 months and 1 year to 5 years in commercial properties. A lock in period usually shows the intention of the person to stay in the property. Commercial renters usually have a longer lock in period since no one wants to move their office or showroom in 6 months. It takes a long time to setup a business. Once it is set, the location usually becomes a landmark in the long run. Especially in Mumbai as turns are defined by this restaurant, that bank, a panwale ki dukaan or even peepal ka pedh.
Lock in period for residential properties rented to students and bachelors usually are shorter period. They don’t know how long they will be in a job or their courses get done in a year or two. Families prefer longer lock in period. No one wants to uproot their family and move. Let’s face it, moving is a pain and no one wants to do it again and again! Moreover, with families there is a lot of planning that is involved with the main being the child’s school and education.
→ Why is the Lock In important?
It gives safety to both the parties in the transaction. The owner pays commissions and spends money in getting the apartment clean, painted and fixed to be move in ready. If a tenant leaves early then it is not worth it for the owner to go through the process.
For the tenant it is equally important since he does not have to move again and again. Moving is a painful task. The tenant does not need to be worried that he will be given a notice to leave if the owner gets someone else paying more money for the same property.
→ What happens when you break the lock in?
You really don’t want to do that! Why you ask? It is a very expensive ordeal. If you have to leave within the lock in period then you have to pay the remaining balance period irrespective. The second option is for you to forfeit your entire deposit amount. Either that or find another tenant to take over your place and pay the expenses of brokerage. The same is true for the owner also. If the owner says that you have to vacate then he has to pay for all your expenses. Mostly landlords wait it out. They don’t lose much since they are getting the rent anyways. So whenever you decide on the lock in period chose wisely and make sure that you stick to it.
You don’t want to be the one losing tons of money.