How has tech disrupted the 5 clauses you must have in your rent agreement construction industry
Technology has disrupted almost every facet of the real estate business today. However, the creation of the core product is and will remain the most important aspect of this business, and advanced technologies are certainly playing a major role there. By adopting innovative technologies like automation in construction, innovative designs, sustainability, use of prefabricated material and online marketing, developers can value-engineer their product. Let’s look at some of the existing and upcoming technology disruptions in real estate construction.
Among the many new technologies already adopted by the construction sector, 3D Printing (large-scale printing of homes) is anticipated to change the way real estate is built over the next decade. Though still very nascent, 3D Printing can potentially replace a substantial amount of construction across major segments, including residential, commercial or even retail.
This will be a massive paradigm shift in real estate development. Apart from seriously reducing waste, cost and labour requirements, 3D printing will help builders penetrate the hitherto inaccessible areas of dense urban centres, where it is impossible to set up heavy machinery for construction. 3D printing technology will eventually also involve the printing of internal structures such as walls, plumbing, electrical systems, venting and so on.
Given the rapid rate at which technology is reimaging everything in modern life, it would perhaps be rash to tag 3D printing in construction as ‘hopelessly futuristic’. It will happen sooner than we may expect. While 3D printing in the construction sector is yet to kickstart in India, anentire two-story house was 3D printed from concrete in Beijing in just 45 days - from start to finish. The potential of this highly disruptive construction technology is therefore beyond dispute.
Of course, there are considerable costs involved in this technology. 3D printing machines usable in the construction sector can cost as much as $2,000,000. Also, their current capacities are limited to structures of less than 33 feet (10 meters) in height, with a throughput of less than 550 pounds(250 kilograms) per hour.
In other words, 3D printing technology in the construction sector can change the way real estate functions but currently they are largely limited to printing small buildings. For largesize buildings including multistorey offices or large malls, machinesof considerably higher capacities would be needed.
BUILDING INFORMATION MODELLING (BIM)
An existing construction tech- nology which is fast gaining ground is Building Information Modelling (BIM) software that allows designers to produce 3D mock-ups of planned structures along with critical information about costs and construction timelines. Many small and medium organizations are shying away from the adoption of BIM technology as it involves high implementation fees and training costs, including the cost of hiring experts, training the existing workforce - apart from the investment in the technology itself. Since many of India’s developers simply don’t have budgets to meet these additional expenditures, they prefer to follow traditional methods.
However, BIMtechnologyhas certainly found a foothold in India. Some examples of companies using BIM software include the Nagpur Metro Rail Corporation (NMRC) that adopted 5D BIM technology for practical completion of the project and create an Issue-Based Information System(IBIS) for each phase of the project.
In Amritsar, a rapid transit system was constructed using Virtual Design andConstruction technology. Spread over 4 km, this rapid transit system is one of the finest examples of the application of BIM technology in India.
Construction companies worldwide and also in India have begun using Virtual/ Augmented Reality technology to enhance construction worker safety training. VR allows workers and work managers to visualize the more serious construction site hazards and prepare for them adequately. Firms also use apps that link VR/AR tech to their BIM software. This allows contractors and developers to create virtual walkthroughs of a structure even before it is complete, enabling them to make more informed design decisions early in the construction stages and save on both time and costs.
OTHER MAJOR TECHNOLOGIES
Drones: Although expensive, the use of drones is gaining popular- ity for managing and inspecting sites. Drones allow developers to map a site and create 2D as well as 3D images. Most of the advanced drones use a coordinate-based system which helps achieve absolute accuracy in measurements.
Brick- laying robots: Construction is a highly labour-intensive industry. However, labour costs can be significantly reduced, and quality and precision standards considerably increased by using robotics for the repetitive, mechanical functions such as bricklaying. We have already seen the introduction of a semi-automated mason aptly called ‘SAM’. This robot, which lays bricks rapidly and precisely, has been designed and engineered by Construction Robotics. It is the first commercially available bricklaying robot which works in collaboration with human masons and increases their productivity up to five-fold. For all its innovativeness, it is definitely only the first iteration of manyevenmore efficient machines to come.
All this is important if we consider that while technology can and is replacing humans in various ways and that an entirely new alternate ‘online universe’ has now opened up, humans themselves will always require constructed buildings to live and work in. There is no immediate foreseeable way of catering to all the physical needs of mankind purely by means of technology.
In other words, real estate will remain relevant no matter how rapidly technology evolves - the virtual space has inherently insurmountable limitations when it comes to serving organic life- forms. However, a lot of ‘human inputs’ related to the conception and creation of the required real estate can and is either being replaced or improved upon by technology. Many people leave their home townsandmovetodifferentcities to study, for work, for businessor for better lifestyle. Thefirst thing theyneedinthenewcityisaplace to stay. Given that it’s not easy to buy a home to live in as soon as youmovetoanewcity, especially in metros, most people tend to take aflat onrent. Butbeforeyou take a property on rent, it is prudenttoknowthetermsandconditions and execute a rent agreement.
Arentagreementensuresyou have legal recourse later in case there is a problem between you and your landlord, which is why it’s important to be careful about the clauses included in the agreement. Here are a few must-have clauses for the rent agreement.
AMOUNT OF RENT, SECURITY DEPOSIT, OTHER PAYMENTS
The agreement should clearly mention the amount of rent that you have to pay each month and the due date by which it has to be paid. Inmostcases, landlords ask for a security deposit which is usually equal to one or two months’ rent amount. Mention the security amountintheagreement and when it will get refunded. Also, ensure that the agreement clearly states what else you’ll have to pay for like electricity, water, PNG, maintenance, and so on. Also, it should be clearly mentioned if there is a separatemeterforutility connections based onwhichyouhaveto pay bills or you got to pay a fixed amount every month.
DURATION OF AGREEMENT AND RENEWAL CRITERIA
Typically, rent agreements are executed for a tenure of 11 months. However, youcanenter into an agreement for a longer period aswell. Makesurethetenure is clearly mentioned. Also, clarify about the lock-in period, during which neither the tenant nor the landlord can terminate the agreement, and ensure it’s mentioned in the agreement as well. “The agreement should clearly mention the consequences of terminating it by either partybeforetheendofthelock-in period,” said Rajat Malhotra, partner, Laware Associates, a Delhi-based law firm. Typically, whenthetenanthastovacatethe housebeforetheendofthelock-in period, the security deposit gets forfeited by the landlord. Similarly, if the landlord wants the house vacated before the end of thelock-inperiod, shehastocompensate the tenant by paying an amount equal to the security deposit, in addition to the actual securitydepositrefund. Notethat the lock-in period is not the same as the notice period, which typically lasts one or two months. If the notice period is two months, youwillhavetogiveatwo-month notice to your landlord in case you plan to vacate the house. However, thenoticeperiodistypically notvalid duringthelock-in periodforeitherparty. Whenand how the agreement can be renewed, by how much will the rent go up at the time of renewal, whether or not there are provisions for re-negotiation of rent and so on should be mentioned. Also, in cities like Mumbai, in the initial agreement, real estate agents put in clauses related to paymentofbrokerageatthetime of renewal. Discuss this clause, and get to know in advance what the amount of brokerage for renewal will be and whowill pay it.
LIST OF FITTINGS, FIXTURES
The agreement should also have the description of the house you are taking on rent such as the floor or apartmentnumber, area of the house, number of rooms, bathrooms, living area, kitchen and so on. If it is a furnished house, makesurethereisalist of all the fixtures and fittings like beds, sofas, tables, chairs, wardrobes, numberoffans, air conditioners, lights and so on.
REGISTRATION OF AGREEMENT
“Ideally, one should register the rent agreement,” said Malhotra. In case of disputes, unregistered rent agreements are not considered as primary evidence by the court and you may have to provideothersupportingdocuments to proveyourstand, headded. To register a rent agreement you would have to pay charges such as stamp duty and registration fee. The charges are typically shared by the tenants and the landlords butmentionthatinthe agreement. Also, there shouldbe clarity on who will pay charges like legal fee, if any, or brokerage to agents.
Manylandlordsdonotallowtenantstokeeppets. If youhaveapet, discuss theissuebeforefinalising a house on rent. A few also have issues with non-vegetarian tenants. Other issues to clarify include whether you can use the terrace, parkingspace, gardenor any other amenities in the society.
Landlords typically keeps the original copy of the rent agreement, butyoushouldalwayskeep a copy of the same.
Construction companies have begun using augmented reality to enhance worker safety
A rent agreement ensures you have legal recourse