Rent in Nepal: Rental Law and Practice in Nepal

Rental Agreement in Nepal refers to a legally enforceable document signed by both the Owner of the House and the Tenant (The Individual who desires to rent) that includes critical Details of the Tenant, the Price of Rent, and all other Essential Documents required to complete an agreement. Rental Law in Nepal has been regulated by Chapter 9 Provisions relating to House Rent from Section 383 to Section 405.

1. House Deemed to be Rented

In this context, house refers to the Whole House, a Room of the House, or the Land of the House and the Storey of the House. An individual who owns or possesses a house or its land can transfer the right to use the house/land or part of the house for a specific period, after which the house is deemed to have been rented.

However, an Individual has been prohibited from renting or taking on rent of a House considered unsafe for Human habitat either from a Security Standpoint or a Health Standpoint.

1.1 Period of House Rent

The Rental Agreement in Nepal for Rental Purposes mentioned above mustn’t extend beyond five years. However, if the house is rented for Commercial Purposes, the agreement will prescribe the period.

2. Matters to be Included in Rental Agreement

It is lawfully required in Nepal to enter into an agreement in written form with the tenant by the Owner while renting the house if the Monthly House Rent is above NPR 20,000. The Following Matters must be included in the Rental Agreement:

(a) Full name and address of the Owner and the tenant, their citizenship number, and passport or identification certificate, in the case of a foreigner,

(b) Place and plot number of the land where the house is located,

(c) Purpose for rent,

(d) Date of commencement of rent,

(e) Validity period of rent,

(f) Monthly rent,

(g) Time and mode of payment of rent,

(h) Liability to pay tariffs of electricity, water supply, telephone, used in the house,

(i) Matter on payment of house rent tax,

(j) If the rented house is to be insured, matter relating to it,

(k) Matter on leaving the rented house and eviction of the tenant from it,

(l) Matter as to whether the rented house can be sublet to another, and

(m) Other necessary matters.

While The Rental Agreement is prepared, two Witnesses from each side must also sign the agreement and a copy of the agreement. After the above matters have been clarified and the Witnesses have signed the Document, a Rental Agreement is said to be concluded in Nepal.

While renting a House, the House Owner is required to disclose the weakness or fault associated with the house, if any.

3. Duties of House Owner and Tenant

Both the House Owner and the Tenant are lawfully required to do the following:

3.1 Obligation of House Owner:

(a) To allow the tenant to use the house in accordance with the agreement,

(b) To arrange for such water and electricity supply, sewerage, and sanitation in the rented house as may be required, except as otherwise provided for in the agreement,

(c) To prevent the tenant from insecurity, harassment, or unrest from other persons dwelling in the house,

(d) To abide by the other matters outlined in the agreement.

3.2 Obligation of Tenant

(a) To pay the rent to the house owner within the specified period,

(b) To maintain sanitation in, take care of, protect, and safeguard the rented house appropriately and reasonably, as if it were their own,

(c) Not to do any act such as causing unrest, harassment, or insecurity to the other dwellers in the house or neighbors,

(d) To abide by the other matters outlined in the agreement.

 

3.3 Payment of House Rent

Rent in Nepal can be paid by Cheque or Cash or any other mode or Procedure of Payment as laid out in the Rental Agreement. The tenant must pay the rent to the House Owner within seven days of the expiration of each month. The House Owner must pay the Taxes related to the House Rental Agreement in Nepal. Such Taxable Amount must be deducted from the rent if the tenant pays the Tax.

 

3.4 Repair and Maintenance of Rented House

The Tenant (the one who rents and requests rent of the house) must conduct the repair and maintenance of their rental property. However, if the House Owner is required to do so persistent to their Rental Agreement, the House Owner must conduct due repair and maintenance of the house.

4. Additional Laws regarding Rent in Nepal

4.1 Sub-Renting Provisions in Nepal

If the agreement signed between the House Owner and Tenant allows sub-renting of the House/Room/Storey of the House by the tenant to another person, they are legally authorized to do so. The tenant can sublet the Entire House or its portion to another Individual. For Sub-Renting the House, the tenant must provide such information to the House Owner 15 Days before the Subletting. It must include the name and address. The rent must be paid to the tenant and not the House Owner by the Individual who Submits the Rent. The Sub-Tenant must comply with the terms and conditions required by the Original Tenant. When the Sub-Tenant fails to comply, the tenant has the right to evict the Sub-Tenant.

 

4.2 Rental Agreement in Nepal and its Alteration

The House Owner and Tenant can make necessary alterations in the House Rent Agreement with Mutual Consent.

4.3 Leaving Rented House

A Tenant has the right to leave the rented house before the Expiration of the Rental Period in the following circumstances:

  1. a) If the house owner fails to perform their obligations

(b) If the tenant no longer needs the house for the purpose for which they rented it,

(c) If the house owner does any act contravening the agreement or this Chapter.

However, the tenant must give the House Owner advanced written notice over 35 days before leaving the Building.

4.4 Eviction of Tenant

In the following circumstances, the House Owner can remove the tenant from the house:

(a) If the tenant fails to perform their obligations,

(b) If the tenant commits in the rented house any offense related activity prohibited by law,

(c) If the house owner needs the house for themselves,

(d) If it is necessary to repair and maintain the house by removing inhabitants from the house,

(e) If the rented house does not appear to be appropriate for human habitation from technical and health perspectives,

(f) If the period of house rent expires,

(g) If the tenant does any act in contravention of the agreement or this Chapter,

The House/Land Owner must give Written Notice to the tenant 35 days in advance to evict the tenant.

4.5 Power to Vacate House

A House Agreement is deemed to be terminated in the following circumstances:

(a) If the tenant leaves the house,

(b) If the house owner evicts the tenant from the house,

(c) If the house owner and the tenant cancel the agreement with mutual consent,

(d) If the period of house rent expires.

The Power to Vacate the House has been granted in the following Conditions of Violation of the Rental Agreement in Nepal:

  1. If a tenant disappears without paying rent for three months or more without notice.
  2. If the tenant, successor, or agent cannot be found.
  3. If the Tenant doesn’t appear within the Designated Period after Issuance of Official Notice.

4.6 Statute of Limitation

The Statute of Limitation for Taking Legal Actions or Lawsuits against Individuals lies in Six Months from the Date of Action.

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