Rental Agreement

MeaningA rent agreement is a legal document, also known as contract between the landlord (owner of the property) and tenant for a fixed period of time, that contains the pre-discussed norms and conditions under which the tenant has the temporary possession of the property.

This agreement or document must be followed by both landlord and tenant.Moreover, the tenure of contract or agreement can be renewed if the owner of the property wishes to. The terms and condition of the contract or agreement can be changed according to the understanding between the tenant and the landlord. Unless registered,this notarized agreement is not a legal binding. Therefore, to register the same the tenant needs to pay stamp duty and registry charges on the agreement.

Registration of 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 a registration.

How to register the rent agreement

Visit 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.

Get Your Rental Agreement

    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 witnesses.
    • 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
    Benefits of Registering Rent Agreement

    If you won’t like to end up with something unwanted, you need to get a rental agreement registered under the authorized registrar. There are various advantages of registering rental agreement with an authorized government body.

    a)  Legal Evidence of Rental Agreement

    One of the key benefits of registering your rental agreement is that you can have legal evidence regarding the same. It means that if you face any sort of legal dispute, you can use this registered rent agreement to get rid of the legal mess. Obviously, it is an important benefit that can help you in long run.

    b)  Avoid Unnecessary Legal Issues

    Obviously, you will never and ever like to be trapped in legal situation. Thus, you need to look for a legal agreement before handing over your property to a tenant. There is no doubt that if you get your rental agreement registered under the local registrar, you can easily be able to avoid unwanted legal situations.

    FAQs on Rent Agreement

    How long the is the agreement is valid?

    Most rent agreements are signed for 11 months so that they can avoid stamp duty and other charges. According to the Registration Act, 1908, the registration of a lease agreement is mandatory if the leasing period is more than 12 months. If an agreement is registered, stamp duty and registration fee need to be paid for it.

    Whose responsibility is it to register the agreement?

    The landlord is responsible for registering the document while tenants typically bear the monetary charges. As it is the general responsibility of landlord but both should take care of agreement.

    Can a landlord evict a tenant?

    A landlord should have a valid reason if he wants to evict a tenant. The reason could be wrongdoing as prescribed by the Rent Control Act and Indian law, including terrorism or crime against the state or any matter mentioned in the agreement.

    What should a landlord do?

    If you are an owner, you can prevent your tenant from prolonging his stay in your property by including a clause in the rent agreement on increasing the rent to four or five times the existing rent, if he does not leave when the contract ends. This would put a check on such tenants who play foul. However, if the tenant does not vacate the property even after the notice, you can move court. The court can favor a landlord if it finds out that the tenant was involved in any wrongdoing or the owner needed the property for his personal use. You can also seek police help to throw out the tenant.

    What should tenants do?

    A tenant can’t do much about the eviction if the owner wants the property for personal use. However, if the landlord is trying to evict the tenant without any lawful reason, he can seek police protection. The Supreme Court judgment may help you prove your tenancy rights.

    The Supreme Court ruling-

    To avoid litigations arising out of landlord-tenant disputes, the Supreme Court in the case Anthony versus KC Ittoop and Sons passed an order that a landlord cannot eject a tenant for at least five years, if the tenant has been paying the rent regularly as per the agreement between the two parties. However, if the landlord wants to use the premises for his personal use, he is free to throw the tenant out.

    Which stamp paper is required for rent agreement?

    The renting should be for either residential or commercial purposes. There should be a written agreement between the owner and the tenant. The agreement should be printed on a Stamp paper of a minimum value of Rs.100 or 200/-. Stamp duty is 1% of the total rent plus deposit paid annually or Rs. 500/- whichever is lower. (This also varies from state to state)

    What should a tenancy agreement include?

    Best practices state that a rent agreement should include basic information like rent amount, tenancy term, purpose, and allied details.

    Are Rent agreement and Lease agreement same?

    No, lease and rental agreements are not the same, However , there is a thin line of difference between the both.

    Leaseagreements

    A lease agreement is an accord where the tenant is given the right to live in a dwelling for a definite time-frame (often for 12 months). The stretch of the tenure may vary depending on the tenant’s preference and owner’s will. Typically, a lease binds the tenant and the landlord for a longer span of time. Further, it is divided into Financial Lease and Operating lease.

    Rental agreements

    Contrariwise, a rental agreement is a mutual deal for a more concise time-period i.e. a month-to-month concurrence. This concord permits both, the tenant and the owner to change the terms of agreementwhenever they like.

    Therefore, a landlord can raise the rent amount anytime and the tenant can decide to pack his/her bag and leave no matter when. Veritably, these rent agreements are auto-renewable after every 30-days provided no proper notice is being given by either party (that is mentioned by the clause in the Agreement).