Rental Agreement

WHAT IS A RENTAL AGREEMENT?

A rental agreement is a legal document defining that the owner and the tenant agree to follow the rental rules and the deal. Typically, a rental agreement is prepared by anyone either by the landlord or the tenant. To consider the agreement as valid, both the landlord and the tenant have to sign on the rent agreement in the presence of two witnesses. Also, the agreement must be attested by the witnesses.

WHAT DOES A RENTAL AGREEMENT INCLUDE?

The agreement covers the tenant’s name and landlord’s name and address of the property which is given on rent. Ensure the person you are transacting with is the actual owner/ landlord of the property. You can also ask the landlord to see the documents that prove all previous bills related to the house have been paid, especially the electricity, water, and gas bills.

A rental agreement includes the amount of rent paid and the tenure for which the rent agreement is made. The tenure of a rent agreement is usually 11 months. Also, a clear mention of the terms and conditions under which the agreement can be renewed after it expires should be incorporated in it at the outset. If the rental agreement is for more than a year, the owner must register the rent agreement by paying the necessary stamp duty.

Date of the Rent payment along with the penalty payment if rent is late

Rent escalation clause

WHAT IS RENT ESCALATION CLAUSE?

A tenant should verify whether the landlord has included a “rent escalation clause” in the agreement, which could be used to increase the rent after a certain period say after six months. Verify whether the agreement mentions the date after which rent charges would increase and the percentage of increase.

WHAT ARE THE WAYS TO GET THE RENT AGREEMENT EXECUTED VALIDLY?

Following are the requirements that need to be fulfilled:

The documents must be printed on Stamp Paper of due value.

It is necessary to get the document signed by both the parties (landowner and tenant).

The document must be attested by two witnesses along with their name and address.

If the term of the agreement exceeding 11 months then, you have to register the rent agreement at the sub-Registrar office after paying the required registration fees.

How Our Company can help in the Registration of Rental Agreement?

Our legal experts will draft your rent agreement on the E-Stamp paper of due value.

We will get notarised the rent agreement after getting the signature of both parties.

If it is a registrable agreement (i.e., more than 11 months of tenure agreement), we will take the date from the Sub-registrar office for the registration of rent agreement.

We will pay the registration fees and facilitate the process at the Sub-Registrar office.

We will collect the registered Rent agreement from the Sub-Registrar office.

We will also deliver the Rent agreement at your Doorstep.

Charges related to Registration of Rent Agreement in Various States/Cities:- 

Delhi- Stamp duty is payable @ 2% of the average annual rent in case of rent agreements for a term up to 5 years and @ 3% of the average annual rent in case of the rent agreements for a term greater than 5 years but up to 10 years. Registration fee is payable @Rs.1100 through bank pay order.

Noida and rest of Uttar Pradesh- In UP, Stamp Duty charges for rental agreements are 4% of annual rent + deposit, if the term of the lease is less than a year. Also, 2% of the rent + deposit charges are the registration charge.

Bangalore and Rest of Karnataka- In the state of Karnataka, maximum Stamp Duty that can be charged on any rental agreement is INR 500/-, however, it is to be calculated on yearly basis.

Up to 10 years – 1% of annual rent + deposit

Above 10 years – 2% of annual rent + deposit

Registration charges for rental agreements in Karnataka stand at 1% of rent + deposit.

Gurgaon, Haryana- Stamp duty is payable @ 1.5% of the average annual rent in the case of rent agreements for a term up to 5 years and @ 3% of the average annual rent in case of rent agreements for a term greater than 5 years, but up to 10 years. Also, Registration Charge is mentioned below: 

1 to 50000 = Rs. 100
50001 to 100000= Rs. 500
100001 to 500000= Rs. 1000
500001 to 1000000= Rs. 5000
1000001 to 2000000= Rs. 10000
2000001 to 2500000= Rs. 12500
above 25 Lakh =Rs. 15000

Chennai, Tamil Nadu- Stamp duty is 1% of the total amount of rent, premium, fine etc. and the Maximum Registration fee is Rs.20, 000.

Maharashtra- Stamp Duty will be 0.25% on the complete rent and non-refundable or 10% (for each year) of the refundable deposit. And Registration fees will be Rs. 1000/- if your property comes under Corporation and Rs. 500/- if the property is in the Rural Area.

Indore, Madhya Pradesh- Stamp duty & registration fee put together in Municipal Corporation Area of Indore is approximately 9.75% presently and it is due to increase by 1% from 01st January 2018 and Outside corporation area, stamp duty & registration fee put together is 8%.

Jaipur, Rajasthan- You have to pay the stamp duty from 0.1 percent to 5 percent of the property’s value and a registration fee is 20 percent of the stamp duty.