Online rent agreement: Process, format, registration, validity and much more

Gone are the days when landlords and tenants in big cities had to visit notary offices, for drafting rent agreements. Now, with various platforms allowing facilities to create rent agreements online, landlords and tenants can get this job done from the safety and security of their homes.

Apart from providing readymade templates for online rent agreement formats, these platforms also help one to custom-design the document. Platforms like Housing Edge, for example, not only help the two parties to draft an online rent agreement keeping in view their specific needs but also help them to incorporate terms and conditions to safeguard the interest of everyone concerned.

It is important to note that online rent agreements that are executed on e-stamp paper and signed by both the parties, are legally valid documents and act as an address proof for the tenant and a proof of tenancy for the landlord.

 

How to make rent agreement online?

To draft online rent agreements, the tenant or landlord has to fill in the details on a platform he chooses to go ahead with, make the payment and digitally sign the agreement. The service provider will then mail an e-stamped rent agreement to their respective mail boxes instantly.

Note here that since the entire process is completely online, you do not require a hard copy. However, you could get a copy of your registered online rent agreement printed from your email ID after downloading it in PDF format.

Also check out Housing.com’s rent receipt generator

 

Process followed to create an online rent agreement

Creating an online rent agreement in India has become a streamlined process, offering convenience and legal validity for both landlords and tenants. Here’s a step-by-step guide to help you through the process:

 

Choose a reliable online platform

Select a reputable service that specializes in drafting and registering online rent agreements. 

Gather necessary information

• Personal Details: Full names, addresses, and contact information of both landlord and tenant.

• Property Details: Complete address, type, size, and any specific amenities of the rental property.

• Lease Terms: Duration of the tenancy, monthly rent amount, security deposit, payment schedule, maintenance responsibilities, and any other mutually agreed-upon terms.

 

Draft the agreement

Utilize the platform’s templates to input the gathered information, customizing the agreement to reflect the agreed terms accurately. Ensure clarity to prevent future disputes.

 

Select stamp paper denomination

The stamp duty varies by state and is typically a percentage of the annual rent plus security deposit. The online platform will guide you in selecting the appropriate e-stamp paper value as per your state’s regulations.

 

Review and payment

Carefully review the drafted agreement for accuracy. Proceed to make the necessary payment, which usually includes charges for stamp duty, service fees, and, if applicable, registration fees.

 

Digital signatures

Both parties can sign the agreement digitally. Platforms often provide Aadhaar-based e-signature facilities, ensuring the process is secure and legally recognized under the Information Technology Act, 2000.

 

Registration (if applicable)

For rental agreements exceeding 11 months, registration is mandatory. Some platforms facilitate online registration by submitting the agreement to the Sub-Registrar’s office electronically. Alternatively, parties may need to visit the Sub-Registrar’s office for verification.

 

Receive the agreement

Upon completion, a soft copy of the e-stamped and, if applicable, registered rent agreement is emailed to both parties. Some services also offer doorstep delivery of the hard copy.

Also read how to claims tax deduction under 80GG is HRA is not part of your salary.

 

How to register a rent agreement?

Steps to register a rent agreement

Draft the agreement: Prepare a detailed agreement outlining terms such as rent amount, duration, security deposit, maintenance responsibilities, and termination conditions.​

 

Stamp paper procurement: Print the agreement on stamp paper of appropriate value, which varies by state.​

 

Signatures: Both landlord and tenant must sign the agreement, along with two witnesses.​

 

Visit sub-registrar’s office: Both parties, along with the witnesses, should be present at the local sub-registrar’s office to register the agreement. ​99acres

 

Online registration: Some states offer online registration facilities. For instance, in Tamil Nadu, agreements can be registered through the TNREGINET portal.

 

Documents required

• Proof of property ownership.​ 
• Identity proofs of landlord, tenant, and witnesses (e.g., Aadhaar card, passport).​ 
• Recent passport-sized photographs.​ 

Stamp duty and registration fees: These charges vary by state and are typically a percentage of the annual rent plus security deposit. It’s essential to check the specific rates applicable in your state.

 

How to correct errors in online rent agreements

Mistakes in e-stamped or registered rent agreements—such as spelling errors in names, incorrect rent amounts, or wrong property addresses—can lead to legal complications, rejection during registration, or denial of HRA claims. Here’s how such errors can be rectified:

• Before registration: If the mistake is detected before final submission to the Sub-Registrar, contact the online platform’s support team to revise the draft. Most services allow free edits before stamping or signing.

• After e-stamping but before registration: You will need to cancel the erroneous e-stamp paper and generate a new one. Cancellation policies differ by state—some allow online cancellation requests with supporting documents, while others may require manual applications at the SHCIL or treasury office.

• After registration: If the rent agreement has already been registered, a rectification deed must be executed. Both parties must mutually agree to the correction, draft a rectification deed on appropriate stamp paper, and register it with the same Sub-Registrar’s office.

 

Details needed to create a rent agreement online

The details that one must be ready, with before stating to fill the online rent agreement form include:

• Name and address of the landlord and the tenant.
• Terms of payment.
• Notice period.
• Lock-in period duration.
• Date of execution of the agreement.
• Purpose of lease: Whether for residential or business purpose.
• Yearly increment terms.

See also: Everything you need to know about rent agreements

 

Essential clauses to be included in a rent agreement

Parties involved: Identify the landlord and tenant by their full names and addresses.​

 

Property description: Provide a detailed description of the rental property, including its address and any specific features.

 

Term of tenancy: Specify the lease duration, whether it’s a fixed term (e.g., one year) or a month-to-month arrangement.​

 

Rent details: Outline the monthly rent amount, due date, acceptable payment methods, and applicable late fees.​

 

Security deposit: State the amount of the security deposit, its purpose, conditions for its return, and any interest accrual, as required by local laws.​

 

Maintenance and repairs: Define the responsibilities of both landlord and tenant regarding property maintenance and repairs.​

 

Use of premises: Specify permitted uses of the property and any restrictions, such as prohibiting illegal activities or subletting without consent.​

 

Termination conditions: Detail the notice period and conditions under which either party can terminate the lease.​

 

Utilities and services: Clarify which utilities and services are included in the rent and which are the tenant’s responsibility.​

 

Pet policy: Indicate whether pets are allowed, any restrictions, and potential additional deposits or fees.​

 

Insurance requirements: Specify if the tenant must obtain renter’s insurance and any coverage requirements.​

 

Entry rights: Outline the landlord’s right to enter the property for inspections or repairs, including required notice periods.​

 

Dispute resolution: Include procedures for resolving disputes, such as mediation or arbitration.

 

Is the facility for registration of rent agreements online available all over India?

So far, online brokerage platforms have launched this facility only for big cities, where the rental housing market is quite robust. These cities include Delhi, Mumbai, Bangalore, Gurgaon, Noida, Hyderabad, Chennai, Kolkata, etc. Going forward, the facility to draft and register online rent agreements is likely to reach state capitals and tier-II cities, as well.

See also: Why landlords, tenants must go for online rental agreements

 

How much stamp duty is payable on online rent agreements?

The online rent agreement is drafted on e-stamp paper with a denomination value of Rs 100, on the Housing Edge platform.

 

State-specific stamp duty rates or variations across cities

Stamp duty on rental agreements in India varies across states and cities, with each jurisdiction setting its own rates based on factors like the property’s location, duration of the lease, and the agreement’s terms. Here’s a breakdown of stamp duty rates in major Indian metros:

Delhi

• Duration: Up to 5 years
• Stamp Duty: 2% of the average annual rent
• Additional Charges: A flat fee of ₹100 as a security fee; registration fee of ₹1,100 payable via Demand Draft

Mumbai (Maharashtra)

• Duration: Up to 60 months
• Stamp Duty: 0.25% of the total rent for the lease period
• Note: This rate applies uniformly across the stateBangalore (Karnataka):

• Duration: Up to 11 months
• Stamp Duty: 1% of the total rent plus deposit paid annually or ₹500, whichever is lower
• Payment Method: Stamp duty can be paid online through the government’s website

Chennai (Tamil Nadu)

• Duration: Up to 11 months
• Stamp Duty: 1% of the rent plus deposit amount
• Note: The state mandates registration for agreements exceeding 11 months

Kolkata (West Bengal)

• Duration: Up to 1 year
• Stamp Duty: 2% of the average annual rent plus security deposit
• Note: Rates may vary based on the property’s location within the state

Hyderabad (Telangana)

• Duration: Up to 11 months
• Stamp Duty: 0.5% of the total rent plus deposit
• Note: E-stamping facilities are available for payment

Gurgaon (Haryana)

• Duration: Up to 5 years
• Stamp Duty: 1.5% of the average annual rent
• Duration: 5 to 10 years
• Stamp Duty: 3% of the average annual rent

Noida (Uttar Pradesh)

• Duration: Up to 11 months
• Stamp Duty: 2% of the annual rent plus deposit
• Note: Longer durations may attract higher rates

Pune (Maharashtra)

• Duration: Up to 60 months
• Stamp Duty: 0.25% of the total rent for the lease period
• Note: Similar to Mumbai, Pune follows the state-prescribed rates

 

Biometric verification requirements in Maharashtra

In Maharashtra, the registration of rent agreements mandates Aadhaar-based biometric verification for all involved parties, including landlords, tenants, and witnesses. This process ensures the authenticity of the individuals and streamlines the registration procedure. The biometric verification can be conducted through various methods:​

• Doorstep service: Authorized service providers visit the individual’s location to perform the biometric verification. ​

• Designated centers: Individuals can visit specified centers equipped to carry out the biometric authentication.

• Remote verification: For parties residing outside Maharashtra or India, certain service providers offer remote verification services, facilitating the process without the need for physical presence

Biometric verification in other Indian states

While Maharashtra has implemented Aadhaar-linked biometric verification for rent agreement registrations, similar requirements are not uniformly mandated across all Indian states. For instance, in Karnataka, although e-stamping is available and online agreements are gaining acceptance, certain procedures may still require physical presence. It’s advisable to consult local regulations or seek professional assistance to understand the specific requirements in other regions.

 

 

Legality of e-stamped agreements 

Online rent agreements are increasingly recognized across India, but their legal validity can vary by state due to differing regulations and acceptance levels.

Legal framework

• Information Technology Act, 2000: This act grants legal recognition to electronic signatures and records, making e-signed documents, including rent agreements, generally valid.
• State-specific laws: Each state may have its own requirements for stamp duty, registration, and the recognition of electronic documents. For instance, some states mandate physical registration of rental agreements exceeding a certain duration, while others accept e-stamped and e-signed documents.

Current scenario in major states

• Maharashtra: Online rent agreements with e-stamping and e-signatures are widely accepted. Platforms like eSahayak facilitate this process, ensuring compliance with state laws.
• Karnataka: E-stamping is available, and online agreements are gaining acceptance, though certain procedures may still require physical presence.
• Delhi and Tamil Nadu: While online agreements are used, the legal system may still prefer physically signed documents for disputes, especially for leases exceeding 11 months.

Considerations for legal disputes

• Registration requirements: Some states require rental agreements exceeding 11 months to be registered with the Sub-Registrar’s office, which may necessitate physical presence.
• E-signature acceptance: While e-signatures are legally valid, their acceptance in legal disputes can depend on the state’s digital infrastructure and judiciary’s familiarity with electronic documents. 

 

Online rent agreements in inter-state scenarios

When a landlord and tenant reside in different states from where the rental property is located, the jurisdiction governing the rental agreement is typically that of the property’s location. This means that the stamp duty and registration requirements of the state where the property is situated will apply.

 

Online rent agreements in inter-state scenarios:

Online platforms have streamlined the creation and registration of rent agreements, accommodating parties in different locations. These platforms allow landlords and tenants to draft, e-sign, and, in some cases, register agreements remotely. However, the applicability and legality of online rent agreements depend on the state’s regulations where the property is located.

 

Stamp duty and registration alignment:

Stamp duty rates and registration procedures vary across Indian states. For instance, in Delhi, the stamp duty is 2% of the average annual rent for agreements up to five years

key considerations:

• Jurisdiction: The rental property’s location determines the applicable laws and regulations for the agreement.
• Compliance: Ensure that the rent agreement complies with the stamp duty and registration requirements of the property’s state to maintain its legal validity.|
• Online registration: Some states offer online registration facilities, which can be utilized to register the agreement without the need for physical presence.

 

Validity of online rent agreements for HRA tax deductions

When properly executed, online rent agreements are generally accepted as valid proof for claiming House Rent Allowance (HRA) tax deductions in India. To ensure their validity, these agreements should be comprehensive, including essential details such as the names and addresses of both the tenant and landlord, the rental amount, duration, and tenancy terms. Additionally, the agreement must be signed by both parties and, in some cases, attested by witnesses. 

Employers typically require supporting documents like rent receipts or bank statements showing rent payments to process HRA exemptions. It’s important to note that if the annual rent exceeds ₹1 lakh, the landlord’s Permanent Account Number (PAN) should be furnished. While online rent agreements are convenient, ensuring they meet all legal formalities and are executed on appropriate stamp paper, per state regulations, is crucial for their acceptance as valid proof in tax matters.

 

Online rent agreement role in HRA tax exemptions

Online rent agreements play a pivotal role in simplifying the process for tenants seeking House Rent Allowance (HRA) tax exemptions. Here’s how:

1. Streamlined documentation: Digital platforms enable tenants to create legally valid rent agreements online, ensuring all necessary details—such as rental amount, duration, and parties involved—are accurately documented. This comprehensive documentation serves as primary evidence when claiming HRA exemptions.
2. Immediate access to rent receipts: Many online services provide instant generation of rent receipts upon payment. These receipts are crucial, as employers often require them to process HRA claims. Having timely access to these documents facilitates smoother interactions with employers and tax authorities.
3. Secure record-keeping: Digital agreements and receipts are stored securely online, reducing the risk of loss or damage associated with physical documents. This secure storage ensures that tenants can readily access and present necessary documentation during tax assessments or audits.
4. Compliance with legal requirements: Online platforms guide users through the inclusion of essential clauses and adherence to state-specific regulations, ensuring that the rent agreements meet legal standards. This compliance is vital for the acceptance of HRA claims by employers and tax authorities.
5. Efficient submission to employers: Digital agreements and receipts can be easily shared with employers via email or dedicated portals, expediting the submission process for HRA exemption claims. This efficiency minimizes delays in tax benefit processing.

 

Limitations of online agreements

While online rent agreements offer convenience and efficiency, they come with certain limitations that both landlords and tenants should be aware of:

1. Legal recognition and enforceability

• State-specific acceptance: The legal validity of online rent agreements can vary across different states in India. Some states may not fully recognize digitally signed agreements, potentially complicating enforcement in legal disputes.
• Registration requirements: Agreements exceeding 11 months typically require registration. Online platforms may not facilitate this process, necessitating physical presence at local registration offices.

2. Stamp duty and compliance issues

• Varying stamp duty rates: Stamp duty rates differ by state, and online platforms may not always calculate these accurately, leading to potential legal complications.
• Compliance with local laws: Ensuring that online agreements adhere to specific state regulations can be challenging, especially when platforms offer standardized templates that may not account for regional legal nuances.

3. Limited customization

• Standardized templates: Online platforms often provide generic templates that may not accommodate unique terms or conditions specific to individual agreements, potentially overlooking critical clauses.

4. Security and authenticity concerns

• Verification of parties: Establishing the true identity of the involved parties can be challenging online, increasing the risk of fraud or misrepresentation.
• Data security risks: Storing and transmitting personal and property information online may expose parties to data breaches if the platform lacks robust security measures.

5. Exclusion of essential processes

• Tenant police verification: Some states mandate police verification of tenants, a process not typically integrated into online rent agreement services, requiring landlords to undertake this separately.

6. Limited scope for negotiation

• Rigid terms: The online format may restrict real-time discussions and negotiations, leading to agreements that might not fully reflect the intentions of both parties.

 

Renewal of online rent agreements

Renewing an online rent agreement in India is a streamlined process that ensures the continuity of the landlord-tenant relationship while complying with legal requirements. Here’s a detailed guide on how to renew your online rent agreement:

1. Initiate renewal discussions:

• Advance notice: It’s advisable for tenants to inform landlords of their intent to renew the agreement at least 30 to 45 days before the current lease expires.
• Negotiation: Both parties should discuss and agree upon any changes in terms, such as rent adjustments, maintenance responsibilities, or lease duration.

2. Choose the renewal method:

• Online renewal: Many platforms offer online rent agreement renewal services, allowing for a convenient and efficient process.
• Offline renewal: Alternatively, parties can opt for the traditional method by drafting a new agreement on stamp paper and getting it notarised.

3. Online renewal process:

• Select a platform: Choose a reputable online service that offers rent agreement renewal.
• Fill in details: Enter the necessary information, including personal details of both parties, property address, and updated terms.
• Review and payment: Review the draft agreement, make any necessary amendments, and proceed with the payment for stamp duty and service charges.
• Digital signatures: Both parties can digitally sign the agreement legally recognised under the Information Technology Act, 2000.
• Receive e-stamped agreement: After completion, the platform will provide an electronically stamped copy of the renewed contract.

4. Offline renewal process:

• Draft a new agreement: Prepare a new rent agreement incorporating the updated terms.
• Stamp paper: Purchase stamp paper of the appropriate value, which varies by state.
• Signatures: Both parties and two witnesses should sign the agreement.
• Notarisation: Visit a notary public to get the agreement notarised, which adds a layer of legal validation.

 

Tenant Police Verification: Integration with online rent agreements

In India, tenant police verification is a crucial step mandated by law in several states to ensure the safety and security of rental arrangements. This process involves the landlord submitting the tenant’s details to the local police authority for a background check, aiming to prevent unlawful activities and maintain community safety.

 

Integration with online rent agreements

While online platforms have streamlined the creation and registration of rent agreements, the integration of tenant police verification varies:

• Separate processes: Many online rent agreement services focus primarily on drafting and registering the agreement. Tenant police verification often remains a separate process that landlords must initiate independently. This involves visiting the official police department website of the respective state or physically visiting the local police station to submit the verification form.
• Platforms offering integrated services: Some platforms, such as Housing.com, provide tenant verification services that include police registration. These services facilitate background checks and ensure compliance with local laws, offering landlords a more comprehensive solution.

 

State-specific procedures

The process and requirement for tenant police verification can differ across states:

• Delhi: The Delhi Police offers an online portal where landlords can submit tenant verification forms. This digital approach simplifies the process, allowing for efficient submission and tracking.
• Maharashtra (Mumbai): Landlords can perform tenant verification online through the Mumbai Police’s official website. The process involves filling out an application form with details of the property and tenant, uploading required documents, and submitting the form electronically.
• Karnataka (Bangalore): The Karnataka Police provides an online platform for tenant verification, enabling landlords to submit necessary details and documents digitally. This initiative aims to enhance security and streamline the verification process.

 

Legal implications of non-compliance

Failing to conduct tenant police verification in states where it is mandated can lead to legal consequences for landlords:

Penalties: Under Section 188 of the Indian Penal Code, disobedience to an order duly promulgated by a public servant can result in penalties, including fines or imprisonment. Landlords may face legal action if they neglect the mandatory verification process.

 

How to conduct online police verification for rent agreement?

Conducting tenant police verification is a crucial step for landlords to ensure the safety and legality of their rental arrangements. Many Indian states have streamlined this process by offering online platforms, allowing landlords to perform verifications without visiting a police station.

Steps to follow

1. Access the official portal:
   • Visit the official police department website of the state where the property is located.
   • For instance, the Mumbai Police provides an online tenant information form.
2. Locate the tenant verification form:
   • Navigate to the ‘Citizen Services’ or equivalent section.
   • Find and select the ‘Tenant Verification’ option.
3. Complete the form:
   • Provide accurate details about both the landlord and tenant, including names, addresses, and contact information.
   • Ensure all mandatory fields are filled correctly to avoid processing delays.
4. Upload necessary documents:
   • Attach scanned copies of required documents, such as:
     • Tenant’s identification proof (e.g., Aadhaar card, passport).
     • Tenant’s address proof.
     • Recent passport-sized photograph of the tenant.
     • Copy of the rent agreement.
5. Declaration and submission:
   • Review the entered information for accuracy.
   • Submit the form online.
   • An acknowledgment receipt or reference number is typically generated; save this for future reference.

 

State-specific platforms:

• Delhi: The Delhi Police offers a mobile app, ‘Suraksha,’ facilitating tenant verification.
• Maharashtra: The Mumbai Police provides an online tenant information form on their official website.
• Karnataka: The Karnataka Police have integrated tenant verification services into their online citizen services portal.

 

 

Measures taken by online platforms to ensure document protection from fraud

Online platforms facilitating rent agreements implement several measures to protect documents from fraud and ensure the authenticity of transactions:

1. Identity verification

• KYC procedures: Platforms employ Know Your Customer (KYC) protocols to verify the identities of landlords and tenants, reducing the risk of fraudulent activities.
• Document authentication: Users are required to upload government-issued identification and property ownership documents, which are then cross-verified for legitimacy.

2. Digital signatures

• E-signature integration: Utilizing secure electronic signatures ensures that only authorized parties can execute the agreement, maintaining its integrity.
• Audit trails: Digital signatures often come with time-stamped records, providing a verifiable trail of the signing process.

3. Secure payment gateways

• Encrypted transactions: Payments for stamp duty and service fees are processed through encrypted channels, safeguarding financial information.
• Fraud detection systems: Advanced algorithms monitor transactions for unusual activities, flagging potential fraud attempts.

4. Data encryption

• SSL certificates: Platforms use Secure Socket Layer (SSL) encryption to protect data transmitted between users and the platform.
• Encrypted storage: Sensitive documents and personal information are stored in encrypted formats, preventing unauthorized access.

5. Regular security audits

• Vulnerability assessments: Routine security checks are conducted to identify and address potential weaknesses in the platform’s infrastructure.
• Compliance certifications: Adherence to industry standards and obtaining relevant certifications demonstrate a commitment to security.

6. User education

• Awareness campaigns: Platforms educate users about common fraud schemes and provide guidelines on safeguarding personal information.
• Support channels: Accessible customer support assists users in verifying the legitimacy of communications and transactions.

 

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FAQ

How to make rent agreement online?

Platforms like Housing.com provide the facility to create online rental agreements. Simply visit Housing Edge, to create a rent agreement online, as per your needs.

What are rent agreement online charges?

To create an online rent agreement on Housing Edge, one has to pay the cost of the stamp paper plus a nominal convenience fee.