Tenancy Agreements: Types, Rights, & the Tenancy Act 2021
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17 APRIL, 2023

Tenancy is a form of ownership involving one party being allowed to occupy the property owned by another party in exchange for paying rent or providing services. The tenant and the landlord will sign a lease or rental agreement which outlines the respective rights, roles and responsibilities of both parties. This agreement also restricts the tenant from taking overall legal property ownership. The tenancy is a beneficial agreement for both parties as it provides security for the tenant and a steady income for the landlord. Both parties must adhere to the agreed-upon terms to get the most out of their arrangement. The tenancy is an agreement which enables both parties to reap the benefits of the property while also protecting each other's interests. Let's explore more about it.

What is Tenancy Agreement?

Tenancy or tenancy agreement is a legal arrangement between the landlord and the tenant, allowing the tenant to inhabit and use the landlord's property for a specified time, generally in exchange for an agreed-upon sum of money. The tenant is entitled to inhabit the premises, make required repairs, and utilise the property for their private purposes as long as they do not infringe on the landlord's rights. On the other hand, the landlord has the right to collect rent, enforce the conditions of the lease, and take action against the tenant if they fail to comply with the agreement.

Important Characteristics of Tenancy Agreement

There are three essential requirements for establishing protected tenancy. For starters, the tenant should have sole use of the premises during the tenancy. Rent payments are a common method of ensuring this. Second, the duration of the tenancy must be predetermined and acceptable to both parties.

Last but not least, a rental agreement between the landlord and tenant must be drafted, outlining the respective responsibilities of both parties. A binding legal relationship is established, and its terms must be observed during the tenancy. These three features are crucial for a pleasant and productive tenancy, so giving them some thought and checking that they're all present is necessary. A protected tenancy also gives tenants certain rights and obligations, such as repairing and maintaining the property or paying rent on time.

Types of Tenancy Agreements

1. Statutory Tenant: This tenant has inherited or been given a tenancy. It occurs when the original tenant dies or the tenancy is transferred to someone else. This type of tenancy is protected by law, and the tenant is entitled to remain in the property until it is sold or they are legally evicted.

2. Lessee: A lessee has been granted a lease by the landlord. This legal document outlines the rights and responsibilities of both parties involved, dictating the time one will be on the property, the amount of rent that must be paid, and any other conditions that may come into play. It is a binding agreement that ensures autonomy to the tenant and the landlord, allowing each to uphold their end of the bargain and enjoy their respective obligations.

3. Licensee: A licensee is permitted by the landlord to occupy the property. This type of tenancy is usually granted when the tenant requires temporary access to the property, such as for a short-term business venture. The licensee is not granted a lease and does not have the same rights as a tenant.

Key Landlord Rights in Tenancy Agreements

The landlord has certain rights which the tenant must respect.

Right to Evict

The landlord holds the right to evict the tenant if they fail to meet their obligations in the lease agreement. A notice must be provided to the tenant, who will then be given a chance to remedy the breach or make payment of the past-due rent. The landlord can legally proceed with eviction if the tenant cannot do so.

It is within the landlord's right to take action and evict a tenant if they fail to fulfil the lease agreement requirements. The landlord must inform the tenant in writing, allowing them to remedy the breach or pay any past-due rent. The landlord must go through with the eviction if either cannot be achieved.

Right to Charge Rent

Landlords can charge whatever rent they see fit, as long as it is competitive, with similar rentals in the region. The lease agreement between the landlord and tenant should specify the frequency and amount of this charge, usually paid monthly or annually. The landlord relies on this rental income to pay for maintenance and improvements to the property.

Right to take back possession of the property for repairs

The landlord can take back possession of the property for repairs, renovations, or other necessary work. The landlord must provide the tenant with notice and an opportunity to make alternative arrangements before they can reclaim possession of the property.

Basic Difference Between Tenancy Agreement and Lease

The main difference between a tenancy and a lease is that a tenancy is a legal agreement between a landlord and a tenant that creates a right to possess a property for an agreed-upon period, usually for years. In contrast, a lease is an agreement between a landlord and a tenant that creates a right to possess a property for a shorter period, usually for months.

All About Tenant Rights

The tenant can live in a secure, livable property without being unfairly evicted. Tenants also have a right to reasonable rent and the provision of utilities like water and power. Any modification to this lease, such as an increase in rent or termination of the lease, must be communicated to the tenant in writing. Furthermore, the renter is entitled to financial restitution for any property damage they may have caused via carelessness.

Lastly, if the tenant cancels the lease before its expiration date, they are entitled to a return of their security deposit and any prepaid rent.

Housing finance is the best option if you don't want to rent a house. You can apply for a loan from a bank or NBFC to buy a house. In this case, you will be the house owner, and there is no need to pay rent. Ensure to choose the best housing finance company for a hassle-free experience.


A housing tenancy or tenancy agreement is beneficial for both landlord and tenant alike. It provides the tenant with a secure and livable space while providing the landlord with a steady income. It is important to understand the rights and responsibilities of both parties so that the agreement is as beneficial to both sides as possible.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.