Dealing with Indian Landlords – A Challenge for Every Expatriate

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Dealing with Indian Landlords – A Challenge for Every Expatriate

Relocating and Living in India can be an exhilarating experience for any expatriate family, however there are some glitches/ hurdles which can take away some of  the vibrancy of living in this amazing,  colourful and crazy  country. One of the common, but major challenge typically expats face in India are  pesky landlords.

Read on to know what a foreigner/ expat moving or relocating to India needs to know about landlords here in India and some tips on how to deal with them.

Diverse country, vast variety of landlords

Like all aspects in life, landlords come in different varieties and types. It would behove important for an expat moving to India to know that India being a huge, diverse country has a wide array of mindsets and personalities. Thus, cultural sensitivity and alignment would take you a long way while adjusting to a new house here.

While an expat may come across a few highly liberal, educated, and cultured landlords who would give them all the space and privacy, they should   be prepared to face some who would be irritatingly inquisitive and interfering, or impose other limitations like what one can cook in the house or who one can entertain as a guest. Some landlords, like in any other country,  may even be inflexible when negotiating their lease terms or the commercials.

Unwanted, irritating curiosity: Dealing with extra attention!

If you are moving to India and looking to rent a home to live in, don’t be taken aback if your negotiation with the prospective landlord resembles a job interview. Most Indians are curious about other cultures and landlords being landlords just add to the curiosity quotient. Try not to be offended by personal questions such as how much you earn, are you married, who all are in your  family, what is your citizenship, where did you study, and who all you may know. These questions are born out of sheer eagerness and respect and inquisitiveness. One always have an option of politely denying or side stepping such questions and you will not be pushed or persuaded further to answer them. It may also be possible that on the first meeting itself, you may be asked to help one of the landlord relatives with a job in your company.

Since apartments are usually owned by individuals there are chances that you will live in close proximity to your landlord. In many cases, you may have to deal with the landlords personally in case of problems or issues, even if you use an agency or professional service to find your apartment. Many landlords tend to become informal quickly and expect to be invited and also may invite you to their homes. If you are a private person, it is recommended to handle such intrusive behaviour with tact as a good relationship during the term of your lease with your landlord is essential.

Bias for/ against certain foreigners/ expats: Learn to deal with it!

Expats from certain countries may enjoy certain privileges while some from certain countries may face prejudice.

It is usually observed that white-skinned expats or expats from developed countries have an advantage and they can’t be pushed around. Many restrictions or prohibitions can be relaxed when it comes to expats from certain nations.

Need for a third-party intervention: Or else hone your negotiation skills!

If you are a novice at negotiations or find it difficult to get people to your terms, it’s highly advisable that you opt for a relocation consultant or an agency. Although it’s possible to avoid using a broker by finding an apartment advertised on an expat group, portal or through a personal reference and by dealing and negotiating directly with the landlord, considering the Indian Real Estate market is complex and highly unorganized, it is advised to hire a local validated expert for the negotiations. While you might save on the finder’s fee by closing a property on your own, the tedious paperwork and coordination involved may make that saving not very worthwhile.

Be prepared for the bureaucracy: Wearisome yet required and advisable  

Finding a suitable home may not be the end of your worries. The process that follows may be a long drawn one with substantial paperwork. Firstly, to officially start sealing the deal you need to sign a LOI, or an agreed term sheet, followed by payment of a token fee to stop or discourage the landlord to show the apartment to other prospective tenants. Negotiation of the lease and terms and reaching an agreement is another challenge. Once an agreement is reached, the process of executing the Lease Agreement/ Deed or a Leave and Licence Agreement, varies from State to State in India. Once the lease agreement/ leave and license agreement is executed, , , you need to pay a sizable security deposit (negotiable, but usually ranges from a month’s rent  and may go up to ten months’ of rent in some locations in India – e.g. Bengaluru and Chennai); and, finally, you need to register your  lease agreement / Leave and Licence Agreement with the Sub – Registrar’s office where in at least a half a day may be spent and the landlord needs to cooperate and make himself available for this registration process..

It is hence advisable that before any money changes hands, make sure that everything agreed to is in writing at every stage. Also, check the clauses and conditions of the lease draft for any direct/ indirect/ financial impact. Review the lock-in period; notice period, to ensure everything is in order. Having a lawyer to cast his or her eyes over the contract or lease is a highly sensible idea.

Typically, landlords in India do not like to sign a lease for under one year and do expect a minimum commitment to the lease for at least one year by the tenant

Written Contracts: Always a safe option to have!

Insist on a written contract signed by both parties when renting a property for although verbal promises would be included as part of a law case, it is quite hard to prove what someone said if it is disputed by the other party. Capture all the important terms and conditions agreed in the negotiation stage and ensure it is written down and included as a part of the agreement.

An array of national and state laws are applicable on rented property providing protection to both, the tenants and the landlords regarding length of lease, fair rental fees, and eviction process. If you seek court redress, your contract will be considered alongside applicable laws for a verdict.

Chances of overcharging: Be careful!

Typically, landlords know that expats/ corporates can usually afford to pay a higher price for the same property or assume that they may be unaware of prevailing rentals.

Quite a few landlords look only for expat tenants and corporate leases, for the reasons of higher suitable rents and also it is understood that there may be less chances of legal hassles and the tenant would vacate the premise at the time of repatriation.

Usually, the landlord and the broker would have clearly established the target price but it would not include additional costs viz. cost of security, maintenance, and grounds maintenance. These costs along with the utility costs are, in most cases, borne by the tenant and not the landlord. Thus, an expat should obtain a schedule or table of these costs before agreeing to a tenancy, as later complaints about what was told and what was not may be confidently dismissed.

As a smart expat you must check whether the landlord wants the payment each month or a lump sum payment quarterly or annual payment in advance and always pay rents by way of checks / bank transfers and never by cash

It is also recommended to not pay any security deposit from overseas remittance as remitting this refundable deposit back to the international remitter is not easy for Indian landlords due to certain fiscal and monetary controls in India. Most landlords are usually not aware of these challenges and this has become a big issue in the past for many concerns.

Be careful about utilities and furnishings: Forewarned is forearmed! 

You would have the options of both furnished or unfurnished apartments. Ensure you make sure to check out the place beforehand to see just how “furnished” it is, what is the quality of furnishings offered etc. Some landlords also offer an option of furnishing the property with customized new furnishings, but this involves increasing the monthly rental price proportionately. So, it is recommended to take your pick as per your requirements and preferences. Do a comparison of purchasing furniture vs renting. There are also some companies, who provided long and short-term furniture and appliances on rent. Also, before moving in to the property, ensure to perform a detailed inventory check and identify any pre-existing damages and document and inform the landlord/ landlord’s representative as well.

As for the utilities, ensure all are installed in the property and are in working condition. In India, electricity, water and piped gas are always in the name of the landlord, please check the last paid utility bills so as to be sure that all past dues have been settled by the landlord.

As it is usually the tenant’s responsibility to maintain the property and as per the lease terms agreed, landlords don’t like to get involved with day to day maintenance and redressal of issues at the property. This is unique to India and unlike many countries, they refuse to get involved once they hand over the house. It is hence recommended that a thorough check be done before taking possession of the property and get any pre-existing issues and defects settled prior to commencement of the lease.

 

Anuroop Pande
anuroop.pande@ikan.com

Anuroop is a Seasoned Professional with Masters in Business Administration in International Business and having over 7 years of Industry experience and an overall 10 years of experience in developing & establishing multifunctional support and responsibilities, corporate leasing & transactions, relationship management, client servicing, administrative support, business development and hospitality consultancy.

1 Comment
  • Harveer Singh Chadha
    Posted at 15:32h, 15 July Reply

    Resolving this aspect of Relocation is complicated, especially with high value rental budgets.

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