The outbreak of COVID-19 affected the entire world, but it was particularly tough for both landlords and tenants. It’s the physical process that made things more challenging for both parties, especially if one wants to vacate the premises or rent a new one. Two of the biggest areas of concern include the refunding of the security deposit and rent deferment due to the contagion. These things became challenging because most lease agreements don’t factor in the virus as a force majeure event.
For some time, there has been an array of launches of tech interventions meant to deal with these problems. One of them is the launch of an escrow account that caters to the know-your-customer process, generates legal documents, and also holds the advance and security deposits digitally. It even generates rent receipts every month.
This escrow mechanism may become regular once the government manages to implement the draft model tenancy act. The same mechanism will go a long way in preempting litigation.
Ashwin Chawla, the founder, and CEO of Escrowffrr said that the escrow account mechanism is gaining popularity. Therefore, one may notice legal cases regarding real estate dropping from 66% to 33%, as almost half the cases are to do with rental and resale transactions.
In India, almost 66% of the pending court cases are about matters concerning real estate and the county holds a global rank of 163 in terms of contract enforceability.
Chawla says that they are trying to introduce digitization of escrow to democratize the rental process by using technological enhancements and interventions.
They managed to launch the facility across nine cities, including Delhi, Noida, Gurgaon, Bengaluru, Pune, Jaipur, Hyderabad, Mumbai, and Indore. The tenant has to pay Rs. 3,999 while the landlord has to pay Rs. 999. The rental documents will even have an inbuilt COVID-19 protection clause that treats the lockdown period as a force majeure event and makes it clear that the landlords won’t charge rent during the period.
The conventional processes of renting and vacating properties are full of innumerable bottlenecks. Also, they depend heavily on multiple physical interventions to close the loop. In the current environment, where social distancing is the de facto norm, following these processes becomes problematic. These processes also led to a slowdown in rental activities across the subcontinent.
The design of “Neo Rent” systems allows it to be the one-stop solution to address all challenges. Chawla and his employees crafted this offering by leveraging their unique escrow-based approach to create a holistic trust-based rental transaction suite. They can take care of the users during the entirety of their rental journey.
Anyone can register on the platform, whether it’s the landlord or the tenant. Once the registration process is over, it’s possible to conclude the KYC process seamlessly as the Digilocker of the government remains integrated into the software program. After that, the program generates a standardized contract between the two parties.
The user has to punch-in the variable information with regard to the property digitally. Then, both parties become available on the platform. The software program automatically captures the data submitted by both parties in a standard contract that’s accessible to them through their dashboards.
