Lease deed : Contents & Essential Documents Required For It’s Registration!

When a person acquires possession of property & gets its enjoyment rights in exchange for consideration with the actual owner, the property is said to be leased.

When a property is given on lease, it means that the tenant or the lessee can use the property for a fixed period of time for which they would be required to pay a fixed amount of rent. In this article, we’ll discuss the meaning of lease, documents required for a lease deed & key contents of it. 

What is the Lease Deed?

A Lease Deed is a form of contract between the lessor (owner) and the lessee (tenant) for the use of the property in question on a rental basis. It is closely related to a rent agreement between a landlord and a tenant, but a lease is executed for a longer time period, at least a year or more. 

In a rent agreement, a tenant pays rent to the landlord to use the property, whereas, in a lease deed, the lessee buys the lease rights of the lessor’s property as compensation for using the given property. Additionally, as per section 17(d) of the Registration Act, 1908 – registration of a lease deed is mandatory.

Documents needed to register a Lease Deed

For registration of a residential lease deed, basic documents are required, such as :

  • A lease deed.
  • ID proof such as Aadhar, Driver’s license, etc.
  • A Stamp paper.
  • Registration fee receipt.

For registration of a commercial lease deed, the following documents are required :

  • Power of attorney/board resolution on company letterhead.
  • ID proof like Aadhaar Card, Passport, Driving Licence, etc.
  • Coloured photographs of the authorized signatory(Passport size)
  • Address Proof of the signatory.
  • Company seal or stamp of authorized signatory.
  • PAN Card of the company. 
Essential Contents of a Lease Deed in India

Contents usually differ depending on the type of lease; however, the most important provisions that must be included are :

1. Property’s description: The lease deed must contain the description of the property like the area, location, address, structure, furniture and fittings, etc.

2. Termination clause: The lease deed must state the reasons for which the lease agreement can be terminated. This can include breach of lease deed, use of the property for any illegal acts, failure on rent payment, nuisance by the tenant, etc.

3. Rent, Security & other Maintenance: The amount of rent, mode of payment, due dates, security deposit to be paid, interest on delay in payment, etc. must be clarified in the lease deed. The lease deed must also include the details and responsibility for paying any maintenance charges, utility bills, society charges, etc.

4. Duration of lease: The lease deed must clearly state the time period for which the lease deed will be valid. This provision can include the information related to the renewal of the lease deed in case both parties wish to continue and renew their contract. 

5. Laws Applicable: This provision states the laws which will be applicable to the lessor and lessee in case of a dispute and which court will have jurisdiction to deal with such matters.

6. Dispute Resolution Mechanism: The lease must mention the manner in which the legal disputes between the landlord and tenant arising out of breach of the lease deed will be dealt with. It may include any ADR processes like Mediation or Arbitration.

7. Subletting Clause: The lease deed must state whether the tenant is allowed to sublet the property or not. 

The above-mentioned heads must be used in both residential as well as commercial leases. However, a corporate lease deed can be more detailed and include other details. Any advocate in India can draft a customized lease deed in accordance with the requirements.

Finally

When the lease deed is drafted for the Property in Mumbai or any other locations in India, it needs to be registered with the Registrar of the district in which the property is located. A lease deed is registered only after paying the requisite stamp duty, which varies from state to state. Thus, after the registration of the lease deed, it finally becomes legally binding on the parties.

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.

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