Everything to know about Rental Agreement Process
Most people, when moving into a new city, prefer to rent an apartment on a year-long lease rather than buy or spend their nights in a motel. Apart from renting living spaces, people can also opt to rent flats, entire sections of a building, or a floor for offices, storage, and even a small production line. The process is usually pretty straightforward, but if you are new to it and don’t even know the basics, your landlord can easily take advantage of your situation.
So to avoid that outcome, we will answer the how, when, and why of renting an apartment or any commercial space without getting ripped off.
What is a rental agreement?
A rental agreement or a lease agreement is a contract between the landlord and the tenant (that’s you) stating that the tenant has the right to occupy the area/apartment or property for a set amount of time. The contract may contain anything from living conditions and maintenance to the safety deposit amount. The mutual agreement protects both parties in case of disputes or malpractice; you can take it one step further by going to a lawyer and making it legally binding.
These written agreements can be extremely useful as evidence for payment, condition of the property, and most importantly, the terms and conditions under which it was signed, pretty useful if the landlord decides to hike up the rent. Everyone who signs if there are multiple occupants should get a copy of the rental agreement.
When should you get a rental agreement?
In India, if the tenant plans to lease a property for more than 11 months, a rent agreement is obligatory and is then legally registered with the local authorities. On the other hand, tenants are not required to file a lease agreement or register if the lease period is less than 11 months.
Most people take advantage of this by drafting rental agreements of 11-months, as they are not legally required to register it to the authorities, no need to pay stamp duty or the registration fee. But it’s still beneficial to get a rental agreement, even if it’s for a short period, especially if you are using it for commercial purposes. After registration, it becomes a legal document safeguarding the tenant and the landlord in case of a dispute, even if it ends up in court.
The fees & charges
Tenants generally pay the registration fee and the stamp duty in India; the amount varies from state to state. In Maharashtra, the registration fee is 1000 to 1100 Rs with a 2% – 5% stamp duty; it depends on the district, the duration of the lease, and the total rent amount.
How to register
First, print the rental agreement fixed value stamp paper with all the essential aspects of the lease like duration, maintenance, security deposit, dates, rights of the tenant and landlord, among other details. You can find many online templates for this or seek help from a real estate agent.
Both the tenant and the landlord should be present in-person to sign the deed at the sub-registrar’s office. The agreement also requires the signatures of two independent witnesses for attestation after that agreement becomes valid as soon as the stamp duty and other charges are paid. The landlord keeps the original agreement while the tenant gets a copy.
Documents Required
● Original copy of ownership or a copy of the title to the property, which can be presented as evidence.
● 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.
● A government authorized ID proof such as driver’s licence, Aadhaar card, passport, voter id.
Nowadays, most states allow online registration; in Maharashtra, you need only this site for registration. Just fill out the details, pay the stamp duty via challan, e-sign it and sent the printed copy to the sub-registrar’s office. If that is still not comfortable enough, you so visit PropertyPistol.com, the entire process is much simpler, and you get a pdf of the agreement in the end. As of now, the states of Assam, Himachal Pradesh, Karnataka, Tamil Nadu, Maharashtra, Delhi-NCR, Uttarakhand, Gujarat, and Uttar Pradesh, allow e-stamping of rent agreements.
Remember, rent agreements are compulsory if the leasing period is more than 11 months; if it is not registered, then the landlord or sometimes the tenant will be fined ten times the rent amount, plus stamp duty.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
