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Tenancies on properties not controlled by the Rent Act have many upsides. The looser terms of tenancy in Sri Lanka allow for increased freedom of negotiation between landlords and their potential tenants. The terms and conditions of the tenancy contract can be freely and openly negotiated between the two parties. For this reason, tenancy is ideal for landlords or tenants seeking the opportunity to negotiate payment terms, deposit amounts, means of payment, manner of payment, and more. Tenancy agreements have the additional benefit of being free of fines and taxation fees. In contrast, lease contracts in Sri Lanka are taxed at a rate of 1%.
Tenancies, however, are not as well-defined as the official leasing of properties. As such, tenants may face more risks in renting these types of properties. A tenant’s right to lease a residence may be revoked with as little as one month’s notice. If a tenant refuses to leave within this time-frame, he or she could face eviction and further legal action from the landlord. Note, however, that these actions cannot occur if the residence is protected by the Rent Act. If a residence is not protected by the Rent Act, however, a tenant is at a higher risk for being evicted from their place of residence, as non-Rent-Act properties are governed by pro-landlord law. If you choose to draw up a tenancy contract on a non-Rent-Act-controlled residence, it is recommended that you put your agreements in writing. A tenancy contract ought to be signed by both the landlord and the tenant. For additional protection, consider enlisting a notary to officiate the process.
Tenancies, however, are not as well-defined as the official leasing of properties. As such, tenants may face more risks in renting these types of properties. A tenant’s right to lease a residence may be revoked with as little as one month’s notice. If a tenant refuses to leave within this time-frame, he or she could face eviction and further legal action from the landlord. Note, however, that these actions cannot occur if the residence is protected by the Rent Act. If a residence is not protected by the Rent Act, however, a tenant is at a higher risk for being evicted from their place of residence, as non-Rent-Act properties are governed by pro-landlord law. If you choose to draw up a tenancy contract on a non-Rent-Act-controlled residence, it is recommended that you put your agreements in writing. A tenancy contract ought to be signed by both the landlord and the tenant. For additional protection, consider enlisting a notary to officiate the process.
