What is the Assignment of house rent arrears?
An assignment of rent is a binding contract between a lender and a borrower stipulating that in the event the borrower defaults on the mortgage, the lender will be entitled to collect any rent payments made by a tenant occupying the property. Suppose the lender is aware that the borrower intends to use the mortgaged property as a rental property. In that case, the lender may include an assignment of rent clause in the mortgage agreement to protect its interest further. A lender may enter a general assignment of rents or a specific assignment of rents.
The buyer pays the seller for the rent arrears and the seller assigns the arrears, together with the right and power to sue for recovery and give effectual discharge for them in the name of the seller, to the buyer. The rent arrears are detailed in a schedule.
Need for Assignment of house rent arrears?
n a general assignment of rents, the agreement is binding on all future leases. A specific assignment of rents is only binding on the specific parties listed in the agreement. In the context of a real estate transaction, an assignment of rents, whether general or specific, may be registered on title. An assignment of rent may also be registered under the Personal Property Security Act as a secured interest. An assignment of rent is typically only deleted from the title when the corresponding mortgage is discharged and paid in full.
FAQ For Assignment of house rent arrears
Q1. How will you treat the arrears of rent?
Ans – The amount of arrears of rent received from a tenant or the unrealized rent realized subsequently from a tenant, as the case may be, by an assessee shall be deemed to be the income from house property in respect of the financial year in which such rent is received or realized, and shall be included in the total income of the assessee under the head “Income from house property”, whether the assessee is the owner of the property or not in that financial year.
Q2. How can I recover my rent arrears from a tenant in India?
Ans – If the tenant does not pay the rent despite the legal notice, one can file a case against them in an appropriate court. One can approach a civil court for smaller rent amounts while a district court or a high court for larger amounts.
Q3. What is the limitation for recovery of arrears of rent?
Ans – Recovery of arrears of rent Article 52 of the Indian Limitation Act prescribes three years from the date the arrears become due.
Q4. How can I recover rent arrears?
Ans – Court proceedings can be brought for the recovery of unpaid rent. In many cases the tenant will have no defence against such a claim, and summary judgment can be obtained.
ASSIGNMENT OF HOUSE RENT ARREARS
THIS ASSIGNMENT _________ (as in Form No. 1).
Whereas
AA. is the owner/landlord of house ___________________________________________.(give full description of the house, its boundaries and No. if any, along with its situation in Mohalla __________________________________________), And MN. is the tenant from month to month under a lease or rent note dated _______________ and is in occupation of the said house at a monthly rent of Rs _________ payable on _________ day of every month.
Whereas the said
BB. has not paid the rent of the said house for a period commencing from ______________and ending on _________in spite of repeated demands and a written notice dated _____________The amount of the past rent due comes to Rs ______________
NOW THIS DEED WITNESSES AS FOLLOWS:
In consideration of Rs______________ paid by the said Assignee BB. (the receipt of which is hereby acknowledged) the Assignor AA. hereby assigns to the said Assignee BB. the right to recover Rs______________due as arrears of rent from the said tenant MN. The said Assignee has and shall have all the rights to recover the said arrears of rent with interest and appropriate the same to his use.
IN WITNESS WHEREOF ______________________
Sd.
