Rent Agreement in India |
A rental agreement is an official contract signed between the owner of a property and the tenant who wishes to take temporary possession of the property for a said period of time. Also called a rent deed and lease deed, a rental agreement contains basic details of the residential property, the owner of the property, the renter (or tenant, as he is also called), the term of the rental, and the amount of the rent for the said term.
Why should you register a rent agreement?
A registered rental agreement is one of the most important parts of a landlord-tenant relationship. Not only does it foster the relationship between the two parties but it also protects their rights. Further, it informs others about the ownership of the property. The landlord/tenant should never settle for an oral agreement since it is not bound by law and therefore, should always insist on executing a written agreement.Another key benefit of registering a rental agreement is that it acts as legal evidence and can protect the landlord from any legal dispute in the future. When a deal involves a large asset like a home, the landlord needs a document that protects him/her legally in case of any dispute or opposition from the other party in the future.
Here is the Rental Agreement Format shared for the reference:
Rental Agreement – Sample format
When to register the rent agreement?
According to the Registration Act, 1908, applicable to all states, (except Jammu and Kashmir), a ‘lease’ includes all entities such as residential property, commercial property, undertaking leased for cultivation, hereditary allowances, fisheries, ferries, rights to ways, lights and any other benefit arising out of the land (excluding timber or crops cultivation). All these properties should be registered if they are leased out to a tenant for a period of more than 11 months. A rent agreement that lasts only for 11 months does not require registration.How to register the rent agreement?
rent agreement registration visits to the nearest sub-registrar’s office for registration. However, it is important to keep a track of time when the deed was created. The registration must be made at least four months before the date of deed expiration. After this, a fresh deed has to be created. This is applicable to all legal documents mandating registration barring a property will.To register the deed, both the parties - tenant and the landlord should be present along with two witnesses for attestation. If both the parties are not present at the same time, he/she must sign the Power of Attorney, granting attorney the rights of agreement closure.
What are the documents required for rent agreement registration?
- The original proof/evidence of ownership or title of the property
- Property documents such as Index II or tax receipt of the property to be leased
- Two photographs of each of the parties and one of each of the witnesse
- Copy of the address proof of both the parties and witnesses. Passport, Aadhar Card, Ration Card, Bank Passbook or Driving License, any of them can be submitted as the address proof.
- Route map of the property leased out
What are the registration charges?
An amount of Rs 1,100 is to be paid for the registration of the rent agreement. The fee is regardless of the rental amount or property value. Stamp duty charges are also applicable.For instance, in Delhi, stamp duty charges for a property rented out for a period of 5 years is 2 percent. Similarly, a 3 percent stamp duty is levied on properties leased out for more than 5 years but up to 10 years.
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