Why Rent Agreement Is Required

A tenancy agreement is a legal document stipulating that landlords and tenants agree to abide by the tenancy rules and the agreement. As a general rule, a rental agreement is established by the real estate agent hired by the landlord and tenant. To validate the agreement, the lessor and the tenant would have to sign the agreement in the presence of two persons who are not beneficiaries of the property and who sign the agreement as witnesses. In most cases, the real estate agent is considered one of the witnesses. If the agreement contains a security deposit, add Rs100 and Rs1.100 as a registration fee, bringing the total cost to Rs 6,240. The fees of lawyers or other intermediaries for all documents are not taken into account. A clause clearly stating who is responsible for periodic repairs to the property must also be included in your contract. As a general rule, small repairs to the property are taken care of by the tenant. If a property is rented for 24 months with a monthly rent of Rs20,000 for the first 12 months and 22,000 Rs. per month for the next 12 months. The registration fee of this agreement would be: 2% of the average rent for 12 months: Rs5.040, (average monthly rent is Rs21,000, average annual rent is 21000 – 12 and 2% is Rs5,040). The agreement also mentions when the rent must be paid.

For example, it could be the 5th or 10th of each month. If the tenant does not pay the rent before the scheduled date, the penalties they should pay should also be set in the contract. Six months later, however, the landlord increased the rent by 10% of the monthly rent, which is 700 million euros, due to the increase in rents in the area. Kunal now had two options: pay a monthly rent of Rs 7,700 or find alternative cheap accommodation. As nothing was mentioned in the lease, Kunal had little choice but to pay the additional rental fees. To avoid these fees, many landlords and tenants mutually agree not to register the agreements. If you want to register a rental agreement, tenants and landlords can agree to share their costs. Under Section 17 of the Registration Act, an agreement between a tenant and a landlord involving the occupancy of a tenant`s premises for a period of one year must be registered with the Lower Office. Registration of a rental agreement is optional if it is made for a period of less than 12 months. The majority of leases in India are developed for an 11-month period to avoid the wrath of registration by both parties. “Despite the absence of registration, an 11-month lease is valid and allowed in court in the event of a dispute between the tenant and the landlord. It is precisely for this reason that most lease agreements are concluded in this way and are regularly reviewed or not, as both parties consider appropriate,” says Brajesh Mishra, a Gurugram-based lawyer specializing in real estate law.

The registration of the contract becomes mandatory if the duration of the tenancy is equal to or greater than 12 months. Unlike an 11-month agreement that remains legally valid despite the absence of registration, a lease for a period of 12 months or more would be null and void if it is not registered. Why enter into a lease if your landlord is willing to sign an oral contract? Well, oral contracts have no legal validity and both parties may violate pre-established terms and conditions without having to face them.

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