Everything you need to know about rent agreements


We look at the process to draft an ideal rent agreement and how to register it, online or offline

Since home ownership may sometimes be inconvenient or unaffordable, a majority of the migrant working population in India’s major cities live in rented homes. For this, the tenant signs a rent agreement with the landlord, which includes the terms and conditions that shall be binding on both the parties.

To promote rental housing in India, the government has formulated a draft policy, to make the transaction beneficial for both, landlords and tenants. The provisions laid under this model policy, should be the guiding principles while drafting a rent agreement.

See also: All you need to know about the Draft Model Tenancy Act 2019

 

Legal validity of rent agreement

Until a rent agreement is registered with the sub-registrar’s office, it has no legal validity. It is in the favour of both the parties, to draft an agreement with specific terms and conditions and to get it registered. After drafting the rent agreement, the landlord should print it on stamp paper. Once the tenant and the landlord sign the documents in the presence of two witnesses, they should register it at the sub-registrar’s office, after paying the required fee.

 

Rent agreement format in English and Hindi

Click here to check out the format of a rental agreement in English.

Click here to check out the format of a rental agreement in Hindi.

 

Everything you need to know about rent agreements

 

Documents needed for rent agreement registration

 

Landlord

  • Two passport-sized photos.
  • Aadhaar card.
  • Identity proof (driving licence, voter card or passport).

Tenant

  • Two passport-sized photos.
  • Aadhaar card.
  • Voter ID card.
  • Passport for people from outside India.

 

Details to be included in the rent agreement

Key details included in a standard rent agreement are:

  • Names and addresses of the tenant and the landlord.
  • Signatures of the tenant and the landlord.
  • Monthly rental amount.
  • Security deposit.
  • Maintenance charges.
  • Period of stay.
  • Responsibilities/rights of the landlord.
  • Responsibilities/rights of the tenant.

See also: Most important clauses for any rental agreement

 

Stamp duty on rent agreement

You have to pay a stamp duty while registering the rent agreement, which will vary, depending on the city where it is registered. This amount is paid, by purchasing the stamp paper of value you owe to the government. In Delhi, the stamp duty is payable at 2% of the average annual rent, in the case of lease agreements for a term of up to five years. In Noida, one has to pay 2% of the annual rent as stamp duty, for rent agreements of up to 11 months.

See also: Income tax deduction on rent paid, under Section 80GG

 

e-stamping of rent agreement

In some states, where the e-stamping facility for rental agreements is available, you do not have to physically buy the stamp paper. You can log on to the Stock Holding Corporation of India Ltd (SHCIL) website and check, if the state where you reside offers this facility. Presently, Assam, Gujarat, Himachal Pradesh, Karnataka, Maharashtra, Delhi-NCR, Tamil Nadu, Uttarakhand and Uttar Pradesh, allow e-stamping of rent agreements.

 

Rent agreement: Important terms and conditions

For tenants

Security deposit and token amount: The agreement must clearly mention the security deposit and what happens to it, when you leave the premises. It should also mention the token amount that the landlord has received from you.

See also: How much security deposit can landlords charge?

Number of occupants: The agreement must state what happens, if your family members join you in future.

Repairs: The agreement must mention who will bear the costs associated with wear and tear.

Maintenance: The agreement must clearly state who will be liable to pay the monthly maintenance charges.

Visitors: The agreement must include a clause on who can visit you and at what time.

Pet policy: Do check out if your landlord will allow you to keep pets, if you were to adopt one.

 

For landlords

Conditions to vacate your property.

Visiting hours.

Damages to property and its consequences on the tenant.

Rules on subletting.

See also: Arbitration clause in rental agreements and how it can help landlords and tenants

 

Is it compulsory to register a rent agreement?

Note here that notarised rent agreements are not the same as registered documents. In case of a dispute between the landlord and the tenant, the court will not admit a notarised agreement as proof. Hence, it is important to get the rent agreement duly registered.

 

FAQs

Why rent agreement is for 11 months?

The Registration Act, 1908, makes it mandatory for a lease agreement to be registered, if the leasing period is more than 11 months.

What should be included in a rental agreement?

The rent agreement should include the names and address of the landlord and tenant, terms of the tenancy, period of tenancy, rent and security deposit amount, restrictions on both parties, conditions for termination of the agreement, conditions for renewal and details of who should bear other charges such as maintenance charges, repairs, etc.

 

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