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All you need to know about Rent Agreement

What is a Rent Agreement?

A house rent agreement can simply be defined as a legal contract between the landlord and tenant for a fixed period. It is a set of terms and conditions, which have to be adhered to by both parties. The rent agreement is renewable every 11 months or more, or as per the timeframe mentioned in the contract.

Registered Rent Agreement

Any rental agreement for more than 12 months needs to be registered for both tenants and landlords. An amount of INR 1100 is charged for rent agreement registration in addition to the applicable stamp duty. Stamp duty usually varies across states. For example, in Delhi, stamp duty charges for a property rented out for up to 5 years are approximately 2%, and 3% if the property is rented out for more than 5 but less than 10 years.

Terms & Conditions for Rent Agreement

An ideal rental agreement should cover the following clauses:

  • Duration of the rent period
  • Monthly rent
  • Security deposit
  • Penalty for late payment of rent
  • Additional charges like maintenance, society, water, gas, etc to be borne by the tenant or landlord
  • Provision of parking, if applicable
  • Any damage or repair charges
  • Rights of tenant
  • Rights of landlord

How Do You Register a House Rent Agreement?

Rent agreement that is equal to or more than 12 months has to be registered as a mandatory requirement.

  • The original document of ownership required.
  • The detailed rental agreement should be printed on a stamp paper duly signed by the tenant and landlord/owner of the property.
  • Two witnesses’ signatures are required. The witnesses shouldn’t be related to either of the parties.
  • The tenant, landlord, and two witnesses should also submit their passport size photographs along with valid ID proofs for further validation.
  • The completed document is then submitted in-person to the Sub Registrar office.
  • On the payment of stamp duty and registration charges, your agreement becomes a registered deed.

Rent Agreement Online Registration

In case you do not have time to go ahead with the entire registration process offline, there is an option of registering your rent agreement online. This service is now very popular and comes at a very nominal charge.

  • You need to fill in the required details on a pre-approved template drafted by legal experts.
  • Submit a copy of your Aadhaar card with one more additional ID proof.
  • Make the online payment, which includes stamp duty, registration charges, and service charge.
  • Once approved, the service provider will initiate the legal formalities, and within a few days, your registered rent agreement will be delivered to your doorstep.

Advantages of Rent Agreement for Owners

Once you register the rent agreement online, the owner may use it as a protection if the tenant defaults in any way. It can be used successfully in a court of law until the agreement is registered. The stamp duty and the registration fee are included in the registration cost. According to Section 17 of the Registration Act 1908, if the lease extends to a period of at least 11 months, the arrangement must be registered.

Advantages of Rent Agreement for Tenants

Securing the tenant’s rights is the primary objective?? of registering a rent agreement. This may or may not include verbal disagreements, sudden eviction, unreasonable rent hikes, eviction of deceased tenant’s family, etc The tenant can also benefit from the provision that defines that rent can only be raised in compliance with the agreement after one year and not as per the market rate or as per the whims of the landlord. Confrontations are common between landlords and tenants, no matter what part of the globe we might be living in. Some of the often-quoted tenants' grievances are unannounced calls, overdue maintenance, and unreasonable guest policies. However, by getting a fool-proof rental agreement, most of these problems can be easily prevented.

Rent Agreement Format

Rent Agreement, whether registered or unregistered, is a practice followed in India quite religiously in Urban India. Whether you decide to approach a legal expert or do it online, you don’t have to worry much about the rent agreement format as it is pretty much the standard. Though as an informed and aware tenant/owner, you must check all the terms and conditions, making sure it covers all the important clauses as mentioned in this article.

Why Should You Register Your Agreement Without Fail?

There are numerous instances wherein parties don’t register their rent agreement to save some cost. The most prominent practice hence is to make a contract for 11 months to avoid the compulsory bracket. As per the Registration Act, it cannot be admissible as proof if a rental agreement is not registered. It implies that in the event of a dispute between the landlord and the tenant, there is no acceptance of the un-registered rental agreement, and thus, no claim or decision can be taken based on the un-registered rental agreement. To conclude, it is the responsibility of the landlord to register the agreement. If the landlord fails to do so, as a punishment, he/she will have to pay out INR 5,000 and/or be jailed for up to three months. Hence, make sure to have a rent agreement whenever you decide to rent out your home and vice-versa.

Any questions?
We are here to help.
  • What all documents are required to make rent agreement online?

  • What are the different types of rent agreements?

  • What are important things to include/check in a rent agreement?

  • How much stamp duty is payable on rent agreements?

  • Is rent agreement registration mandatory?

  • Who pays for the registered rent agreement?

  • Why rental agreement is generally prepared for 11 months?

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