When it comes to agreements especially in the case of renting out a property, there are few variations and it can heavily depend on the attitude of the owner. In most cases, the owners are always flexible as they are not too fussed on the agreement if they feel the client is good and would look after the premises properly. Let us study some situations that you as an owner might come across when renting out a property.
Renting out to Embassies and NGO's
This is a very interesting category. Here is what we have observed with Embassies and NGO's.
a. Some may have their own version of the lease agreement and there is no need to freak out and call the deal off if you are unhappy or uncomfortable with some of the clauses. You could always ask them to consider taking off / removing such clauses.
b. Security refundable deposit - since this is a grey area unless a real estate agency is involved in the process where the owner can at will deduct as he / she wishes, certain embassies and NGO's do not pay a security refundable deposit but instead they assure the owner that nothing would go missing or be damaged for that matter and if that does happen, the particular embassy / organization would look into it and resolve it for the owner. Remember, basic wear and tear is accepted.
c. Some have security checks and the team comes over to inspect the premises before giving the green light. Of course this is part of the process as they are concerned and answerable to the families of their employees who come over to this part of the world. Hence, a quality assurance team may visit the apartment to give the security clearance.
Renting it out to Companies
There are many occasions in which companies that come here for business look for accommodation for their directors and other staff members. Below are our observations:
a. Running the agreement through their HR / Legal Department.
This can be a hassle if the lawyers are not flexible and try to show that they know more than the other lawyer (of course, this is open for argument as each lawyer thinks differently). We have had issues with zero-probability matters concerning both parties which eventually go as the owner wishes at the end of the day unless there is a desperate owner wanting to rent it out somehow. This generally takes few days for the green light to come or for amendments to the agreement.
b. Registering the agreement
Most of the companies are quite adamant on the registration as it legalizes everything. Although it's important to build a great relationship with the owner, it is also equally important to understand the pros and cons of registering the agreement. It is always advised and recommended to register the agreement in order to avoid any issues in the future and to be properly covered but it must be mentioned that the owner to a certain degree can decide whether he/ she wishes to register it or not.
Renting out to Individuals and Families
This is mostly for those that come through 'relocation' or simply like to find a place on their own or for those who just like to spend time in Sri Lanka when they are in the retirement age. The observations are pretty simple when it comes to this category as most of it is open for discussion and the levels of flexibility are extremely high from both sides (tenant and owner).
a. Everything depends on what is agreed upon. Since there is no company or embassy with policies and rules to follow, you can take a long breath and sort out matters without being pushed around or anything of that sort.
b. The only risk for the property owner is that if the client turns out to be an absolute nightmare. This can happen. Yes! It can happen which is why it is always recommended to go with a reputed estate agency that carries out a background check on the client. World class agencies like
Mr. T - The Real Estate Giant do not do it for the money, if they are unhappy with the client, the deal ends there.
There is more to the above, please do continue reading this blog as more and more information will be available on the practices of renting and selling real estate in Sri Lanka.
