All you need to know about rental (residential) agreements, bylaws, and contracts

The rules and regulations of a rental property are always a matter of dilemma. In many cases, the tenants fall victim to several unfair dilapidations. Other than these, the undisputed hike of fares every year can cause serious trouble to a limited-budget run family. There are several rental contracts and agreements in Bangladesh that you need to know and understand properly in order to sort out these problems. Most of these bylaws are homogeneous in nature, but there are some exceptions which are highly exclusive to some areas. Bproperty has a dedicated team of experts who deal with all these legal issues. You can reach out to them anytime whenever you are facing trouble.

Terms and conditions in a rental agreement and contract

While preparing a rental agreement, it is important to focus on the operation of the bylaws. Rental contracts and agreements in Bangladesh are generally formulated by scrutinizing these bylaws. These vary with different homeowners as well as the ordinance of the municipal corporations of those particular societies. Below is a brief elucidation of the terms and conditions of rental contracts that are most common (and subject to minimum changes with mutual adjustments or third party arbitrations).

Rent of the Flat

The rent of the flat can be of two types. This may include service charges such as water, common electricity and gas bills. And utility charges include security, lift, garage, and generator maintenance bills. The landowners will be responsible to pay the applicable taxes under Bangladesh Tax Law.

Increment Clause

The tenants and the landowners should mutually sign an understanding of rent increment (in percentage). According to the Premises Rent Control Act 1991, the increment of 10% rent can be made after every 2 years. A violation of this law, such as asking for the more or continuous increase of fare every month/year is punishable by law.

Advance and Security Deposit

The tenants must make an advance of security deposit of at least 1 month and not more than 2 months during signing the contract. As per law, the landowner will refund the amount while the tenants leave the property.

Mode of Payment

The tenant must pay the rental fees within the 7th day of each International calendar month. The homeowner must provide a money receipt for documenting evidence of the credit.

Service Charge

The homeowner is responsible to bear all the charges related to taxation and other charges imposed by the government.

Miscellaneous utility fares/bills

The tenant will only pay the monthly electricity bill for their own rental flat. They should only bear the charge of their own connected meter. Paying internet and cable operator bills for TV is also a part of rental contracts and agreements in Bangladesh.

Duration, expiry, and termination of the rental contracts and agreements

The agreement will automatically renew after a certain period. The tenant must sign the new contract two months prior if they want to stay in that property more. If they want to terminate the contract, they must provide advanced notice at least one month before. The house owner must refund the security deposit after adjusting any damages.

Transferring the rental property or sublets

Rental contracts and agreements in Bangladesh of residential properties do not allow the transfer of a rental property to any other entity or having sublets for commercial purposes. Some homeowners allow sublets but for residential purposes only.

Taxes & levies

The house owner is solely responsible to pay the income tax at the present rate from the house rent as per the law of the country. They will deposit the tax to Bangladesh Bank and will provide copies of deposit slips and taxes paid certificates to the tenants.

Deed amendment and dispute settlement

In need of an amendment, modifications are legal. But a third party arbitrator is necessary to approve of it. The third-party must be an authorized representative. The tenant and the homeowner along with their arbitrator must sign the amendments and henceforth approve them. The third-party is responsible to solve any form of disputes or conflict of interest.

Tenants responsibilities

For different homeowners, they have their own choices of their prospective tenants. Notwithstanding, there are some rental property maintenance issues of tenants in Bangladesh. These responsibilities also fall under rental contracts and agreements.

Force Majeures

The rental property during the time of lease might face destruction due to fire hazards or any other natural calamities. These forms of accidental destruction is not an act or default of the tenant or the owner. The tenant thereby has every right to terminate the lease with immediate effect without paying off any rent.

Rental contracts and agreements in Bangladesh are quite complex due to the heterogeneous nature of bylaws in different municipalities. But there are some common laws that every tenant should know. Understanding these can help you to avoid falling in traps and can help you to find your most desired home with the best neighborhood.