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Posted by on Mar 25, 2022 in Uncategorized | 0 comments

Registration of Lease Agreement in India

We have encountered several cases where natural and legal persons choose to ignore the requirements for the payment of appropriate stamp duty and the registration of these instruments in accordance with applicable law. Circumvention of these mandatory laws often leads to serious complications at a later stage, either when disputes arise between the parties or when the instrument is seized by a government agency due to a shortfall in the payment of stamp duty. You will then be asked to enter the details of the parties to the lease. You will need to provide details, for example. B if you are an individual or a company, what is your profession, address, etc. People also read this: Why should you register your lease? Section 52 of the Indian Easements Act, 1882, defines vacation and licensing agreements. This article states: “If a person grants to another person or a number of other persons the right to do or continue to do something in or on the grantor`s immovable property that would be unlawful without such a right, and that right does not constitute an easement or interest in the property, the right is called a license. ยป The following documents are required for the registration of rental deeds: In some states, the registration of rental agreements can also be done online. For example, in the Maharashtra rental agreement, online check-in can be done. Let`s take a look at the online lease registration process: stamp duty and instrument registration have always been a complex and discussed topic. Several questions are usually asked by people, such as: The basic framework of stamp duty is set out in the Indian Stamp Act of 1899, which allows states to modify it according to their needs. As a result, the Government of Maharashtra passed the Bombay Stamp Act in 1958.

Payment of stamp duty on public holidays and licensing agreements falls under section 36A of the Bombay Stamps Act 1958. After successfully paying the required fees, the applicant must make an appointment with the Sub-Registrar. Arriving at the Sub-Registrar with the required documents in printed form will ensure that the successful registration of the applicant`s assets is completed quickly. On the 25th. In November 2020, Durga Shankar Mishra, secretary of the Ministry of Housing and Urban Affairs, said that once implemented in the states, the new law would free up vacant homes trapped in the clutches of the old law via a crore and encourage investment in the real estate sector. Renting a house or commercial property requires a lease deed. A lease deed is a written agreement that governs the terms between a landlord and a tenant. To enforce the terms of a rental deed, you need a lease deed registration. Let`s see what are the different aspects of a lease deed When the development authority assigns the land development rights to the builder, it is usually a 99-year lease. This means that anyone who receives leased land owns it for 99 years, after which the property is returned to the landowner. Long-term leases control the transfer of land and its use. This period is considered a safe choice of interval, as it covers the life of the tenant and protects the lessor`s property.

To reduce the frequency of stamp duty, people used to pay a large amount in the form of an interest-free deposit with the nominal rent. This gap has been closed, and now, in cases where a refundable deposit is collected from the owner, a fictitious annual interest rate of 10% will be charged on that interest-free deposit, and you will have to pay stamp duty at the same rate on that interest for each year of the license term. Property documents of the property for rent. A tax document can be submitted as proof of ownership. The registration fee for a lease in Maharashtra depends on where the rented property is located. The registration fee is Rs 1,000 if the property is under a municipal body area, and it is Rs 500 if it is located in a rural area. Unless otherwise agreed, the costs of stamp duty and registration are the responsibility of the tenant. For example, if you sign a holiday and license agreement for 24 months with a monthly rent of Rs 25,000 and a refundable deposit of Rs five lakhs, you will have to pay a stamp duty of Rs 1,750 (0.25% on the rent of Rs six lakhs for two years and interest of Rs one lakh for two years). Once you have entered all the details, you will be asked if you would like to pay the stamp duty and registration fees for rental deeds online.

You can pay these fees via an online challan. You will need to enter certain information such as the address of the property, the name of the owner and tenant, the CTS number of the property (for properties that are already in the city survey), the location of the property, etc. Under the Registration Act 1908, any property leased for residential, commercial, cultivation, hereditary allowance or fishing purposes must be registered if it is leased for more than 11 months. The law applies to all states (except Jammu and Kashmir). A rental agreement that lasts only 11 months does not require registration. It is mandatory to register a rental deed if the rental period is longer than 11 months. The rate of stamp duty for holiday and licence contracts is the same for residential premises as well as for commercial premises. The holiday and licence agreement can be concluded for a maximum period of 60 months. It is the landlord`s responsibility to ensure the registration of the lease, otherwise the landlord could have to pay a fine of Rs 5,000 and face a prison sentence of up to three months. In the event that the holiday and license agreement is not registered and there are disputes between the owner and the tenant, the terms of the contract claimed by the tenant will be considered the true and correct conditions according to which the property has been delivered for rent, unless proven otherwise. Although online lease registration is easier than physical registration, it is not widely used in many states.

It is always best if you ask for legal help to draft a lease. A lawyer will guide you through the design and registration process and help you save time. If your rental deed exceeds 12 months, you will need a lease registration. If you have not registered your lease, you will not be able to present it as evidence in court. The registration of leases also contributes to the protection of the rights of the parties. A landlord is more convenient to give his house to a tenant if the lease is legally and validly registered. A rental agreement does not need to be registered if it is only valid for 11 months. For this reason, you would see a common practice of renting properties for as little as 11 months. Duration: You must specify the period for which the rental agreement will be concluded.

If the period is less than 12 months, you do not need to register. Lock-in period: This is the minimum period for which the parties must agree. You cannot terminate the contract during this period. Stamp duty varies from state to state. In Delhi, you will have to pay a stamp duty of 2% for rental contracts with a maximum duration of 5 years and an amount of 3% if the rental deed exceeds 5 years. The registration fee for the rental deed is 1100 INR. These fees do not depend on the value of the property. The content of this document does not necessarily reflect the views/positions of Khaitan & Co, but remains solely those of the author(s). For further questions or follow-ups, please contact Khaitan & Co at legalalerts@khaitanco.com In this article, we have attempted to address some important aspects regarding the payment of stamp duty and the registration of leases, as well as the risks associated with non-performance.

For the registration of the deed of rental, the tenant and the owner must be present in the office of the sub-registrar and pay the stamp duty on the instrument. .