Registration Of Rent Agreement What is the rent agreement? Rent agreement is a popular and well-known property related agreement, where the owner of a property let a tenant use the property for the agreed purpose. The rent agreement legally binds both parties with certain likabilities and rights to protect their agreed interest. The registration of the rent agreement is beneficial for...
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Registration Of Rent Agreement
What is the rent agreement?
Rent agreement is a popular and well-known property related agreement, where the owner of a property let a tenant use the property for the agreed purpose. The rent agreement legally binds both parties with certain likabilities and rights to protect their agreed interest.
The registration of the rent agreement is beneficial for both parties and it is mandatory if the rent agreement is for a year or more.
Necessary Details of a Rent Agreement
Rent agreements usually follow a similar format which must contain these clauses:
• Identification - The name of the parties must be written clearly. Along with the landlord and tenant, the identification of the witnesses is also necessary.
• The Rent- The amount payable by the tenant to the landlord on a monthly, quarterly or yearly basis, must be mentioned clearly.
• Duration- This is an important clause that the rental agreement must be precise about the time period for which the property is let out. The expiration of such a period is subject to either renewal or vacating the property.
• Reasons for Rent- The purpose of the tenant to use the property must be clear and unambiguous. If the rent is taken for residential purpose, it can not be used for commercial purpose without the permission of the landlord.
• Maintenance or Repair- The extent of responsibility of the tenant and the landlord must be specified on the rental agreement regarding the maintenance and repair required on the property.
Notarisation of Rent agreement
The rent agreement must be notarized by the parties for the purpose of authentication that the identification document and the purpose of rent are legally valid.
For the claim of TDS deducted and the benefits under Sec. 15H for the senior citizens, it is mandatory to get the rental agreement notarized.
For the registration of the rent agreem3ent, it has to be for a period of one year or more. The value of the stamp varies based on the rent purpose.
Is Rental Agreement necessary for HRA exemption?
The rental agreement is not mandatory if you have a rent receipt for the said period, at the time of claiming for HRA exemption.
However, as in today's period, most of the landlords accept rent through online transfer, there is hardly any rent receipt is provided. Rental agreements are a must in such a situation.
Checklist in a rent agreement
At the time of entering into a rent agreement, it is always recommended to check these facts:
• Stamp paper of right value
• All the identification details and documents are clearly mentioned and attached - landlord, tenant and witnesses.
• The purpose and tenure of the rent are clearly specified.
• The right description of the property is provided such as the address and dimension.
Is Security Deposit Mandatory?
Security deposits are not mandatory but are an integral part of the rent agreement. The purpose of a security deposit is to cover any unnatural damage caused to the property by the tenant or by any reason which was under the control of the tenant.
The deposit amount is adjustable with the rent or refundable is subject to mutual understanding between the landlord and tenant or as mentions in the rental agreement. However, under Indian laws of tenancy in most of the states, there is no cap for the highest amount that can be claimed.
What Makes a Rental Agreement Legally Unenforceable?
For any contract in India, it is necessary to oblige to certain terms and conditions. The requirements for a rental agreement is already explained, but it is recommended to double-check because any one reason mentioned below may make your rental agreement questionable:
• The rental agreement is not printed on the right stamp paper.
• The identification document of any of the parties is fake or invalid.
• Any of the signatures is ambiguous.
• The details of the property are not mentioned clearly or wrongly mentioned.
How much is the cost of the stamp paper for a rental agreement?
The cost of the stamp paper for a rental agreement varies depending on the purpose and the state where the property is located.
Why Rental Agreements are usually made for 11 months?
Most of the residential rent agreement in India are made for 11 months, which does not require any registration. Registration is mandatory only when it is for 12 months minimum.