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IREF® - Indian Real Estate Forum > Real Estate in India > Real Estate Noida > who must get the rent agreement registered??
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Old February 10 2012, 01:42 PM   #1
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Default who must get the rent agreement registered??

Hi All,

I need an urgent help from the people from Legal field,

who must get the rent agreement registered in Delhi.. is it Landlord's responsibility or Tenant's ??

Please give examples of Rent act or Stamp duty act..
I do not want to know any thing else about Rent agreement so please do not copy and paste every thing from google..

Thanks
Alok
 
Old February 10 2012, 02:09 PM   #2
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In case CLA (Company Leased Accommodation) agreement, company pay registry/stamp charges.. but if it is personal leased than amount is born by both landlord/tenant on mutual agreement due to own benefits in agreement.
 
Old February 10 2012, 02:30 PM   #3
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Thanks Fritolay... however this was not my question...

My question is who will initiate that agreement will get registered.. and whose responsibility is to get this registered??

in case of defalut who will pay the penelty???

I need legal advice on it..

this is bit urgent..


Thanks Alok

Quote:
Originally Posted by fritolay_ps View Post
In case CLA (Company Leased Accommodation) agreement, company pay registry/stamp charges.. but if it is personal leased than amount is born by both landlord/tenant on mutual agreement due to own benefits in agreement.
 
Old February 10 2012, 05:09 PM   #4
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Normally landlord insists for agreement with tenant… due to security of own property… …landlord will get more secure position than tenant. Pls note that landlord is giving property for rent so he should be more concerned on such agreement instead of tenant…

Landlord/tenant benefits –
1. Registered rent agreement is legal document and tenant cannot go beyond T&E of leased documents ( E.g. not vacating house after living of 2 year verbal agreement ). Tenant will also get benefit and rent can only be increased after one year as per agreement and not as per market rate OR as per landlord wish

2. Proper notice has to be given by tenant if he/she wants to vacate house.. In many case if tenant leaves the house within 6 month of agreement, landlord can forfeit initial deposit which is three month of advance rent in Delhi, Bangalore -12 months and Mumbai…48 months OR 10 lakh+ (depend on locality of house).

3. Without any agreement, if tenant does not vacate house OR illegally stay without any agreement OR does not pay landlord…than legal battle could be long in such cases. ..with proper legal “Registered” rent agreement, landlord will be more secure since he is owner of property so do tension.


In case of residential property…. I guess there is no penalty since many low class houses are rented on verbal communication OR on mutual understanding and not based on any leased agreement. In many cases in NCR, rent agreement is printed on Rs. 100 stamp paper and notarized but not got registered.
 
Old February 10 2012, 05:50 PM   #5
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1)As per law all rent agreements need to be registered.
2) Legally , the tenant has to bear all the stamp duty costs to get the rent agreement registered.
3) In most cases, its mutually decided to share the cost 50;50 between landlord and the tenent.
4)If rent agreement is not registered and is done on rs 100 stamp paper , sooner or later you will get notice from the court to pay up the stamp duty.
5)The court will send the notice to the property which has been let out and the notice will be in the name of the tenant.
6) Incase the tenent is reachable/available/traceble , then the court will ask him/her to pay up the dues or face action.
7) Incase tenent is no longer in possession of that property/premises, in that case court will ask whosoever is in possesstion of the property to pay up or else the court will seal the property. In such a event , the landlord pays up the dues and saves the property from being sealed.
NOTE- UNDER NO CIRCUMSTANCES COURT WILL LEAVE ITS STAMP DUTY TAX
 
Old February 10 2012, 07:09 PM   #6
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Rent agreement can only be registered if rent period on agreement is greater than 11 months...all agreements less than 12 months...can not be registered and no penalty at all by any state in India
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Old February 10 2012, 07:13 PM   #7
 
 
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fritolay Bhai, do u have anything ( any reference/article ) to support this statement ?


Quote:
Originally Posted by fritolay_ps View Post
Rent agreement can only be registered if rent period on agreement is greater than 11 months...all agreements less than 12 months...can not be registered and no penalty at all by any state in India
 
Old February 10 2012, 08:24 PM   #8
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All Lease Agreements for residential purpose are mostly made for 11 months which can be renewed at the option of any of the parties.

Now the question arises is that, why do they prefer to make 11 months lease agreement rather than to make it for a year i.e 12 months or more.
The basic reason for making it on 11 months basis by the property owner is to shy away from the law of giving 6 months notice.

if he makes it for 1 year i.e 12 months, then he has to give notice of 6 months at the end of those 12 months but if he makes the agreement for 11 months then there is no compulsion of giving notice, he can give him minimum period of notice which he think say 7 days notice .

Rents: Can landlord and tenant freely agree rents in India?

There are two types of tenancy agreements in India, Lease Agreements which are covered by rent control laws and Lease and License Agreement which are not.

A Lease (or Rental) Agreement is covered by restrictive rent control laws. The amount of rent that can be charged is based on a formula devised by the local executive, legislative or judicial government, as the case maybe. For Delhi, the maximum annual rent is 10% of the cost of construction and the market price of the land, but the cost of construction and the price of land are both based on historical values and not the current market valuation. So the older your property, the smaller the rent you can charge. Rents can only be increased by a fraction of the actual cost the landlord has incurred in improving the property.

The Lease Agreement transfers the right of ownership to the tenant for an indefinite period of time, which can be problematic because it encourages the tenant to claim the right to permanent occupation. In numerous cases, tenants have refused to relocate. When brought to court, these cases can take 10 to 20 years to resolve.

Most landlords prefer a Lease and License Agreement. This agreement only grants the tenant a license to occupy the property for a period of 11 months, with an option for periodic renewal. Because the rent control laws (which are largely in favor of tenants) only apply for lease agreements of at least 12 months, establishing an 11-month agreement serves as a pre-emptive measure.

To avoid complications, since landlord prefer these agreements, we will only discuss Leave and License agreements for the rest of the article.
Deposits

Prior to occupancy, tenants usually pay a security deposit of three months’ rent. This is usually refundable at the end of the contract, if no other liabilities have been left unsettled. Deposits are expected to be returned within a month after the end of the tenancy, or as stated in the contract. Until the deposit is returned, contracts commonly stipulate that interest must be charged on the deposit, computed at a daily rate. Advance payments for six months up and full payment for 11 months are popular.

Since Lease and License Agreements are designed to escape restrictive regulations, all terms are governed by agreement between landlord and tenant. Aside from the most basic condition that the tenancy is only for 11 months, everything must be stated in the contract. (For a copy of a sample l Residential Lease & License Agreement, click here.)

Typical contracts include a provision that, if either party wishes to prematurely terminate the contract, three month’s notice must be given.
The typical agreement also prohibits subleasing. To deter tenants from overstaying, experts recommend including a clause quadrupling the rent if the tenant does not leave when the contract ends

By. S. R. Agarwal, Advocate There is a practice prevalent in Bombay that Leave & Licence Agreement in respect of a residential premises is entered into and executed for a maximum period of 11 months. The question arise whether it can be for more than 11 months. A licence has been defined in Section 62 of the Indian Easement Act, as a right to do or continue to do something in or upon an immovable property . It does not transfer the interest or create any interest in the immovable property , like a “ LEASE”, as defined in Section 105 of the Transfer of Property Act, as a right to enjoy property for a certain period in consideration of the price paid.

Provisions of Section 62 of the Indian Easements Act do not prescribe , any minimum or maximum period for which a licence may be granted. A lease of a immovable property in Bombay is governed by the provisions of Bombay Rents Hotel & Logging House Rates Control Act, 1947 ( Popularly known as Bombay Rent Act, ) which no where provided , prior to 1.2.1973 for giving a residential premises on Leave & Licence basis. Still the practice was in vogue to give the residential premises on Leave & Licence basis .

An instrument creating a lease of immovable property for a term of one year and above was required compulsorily to be registered by virtue of provisions of Section 17(d) of the Indian Registration Act. Therefore, such Leave & Licence Agreements were being executed for a period of 11 months with duel intention namely to avoid the stamping of such agreement and its registration and , secondly, to avoid interpreting such Leave & Licence Agreement as a lease of the immovable property to avoid protection against vacation of the occupier, as per the provisions of the said Bombay Rent Act.

In the year 1973 an amendment was carried out in the said Bombay Rent Act buy the State of Maharashtra, where section 15A was introduced therein providing that any person in occupation of any premises as a License on 1.2.1973 shall be deemed to have become a tenant in respect of the premises in his occupiers of residential premises as licensees as on 1.2.1973 , became the statutory tenants of the premises with the benefit of protection against vacation of the premises, except in accordance with the provisions of the said Bombay Rent Act.

Thought, the State Government of Maharashtra regularised an illegal practice of creating Leave & License in respect of residential premises, which was contrary to the provisions of the said Rent Act, yet the Landlords, who did not or do not require the premises for their own use, were not willing to give the premises to others which created imbalance in the Society in as much as on the one hand sufficient was available and on the other, people were starving of the accommodation, albeit for a temporary period. These were being held back by the owners because of the apprehension of not getting the premises vacated, when they needed in view of the protection provided to the tenants by said Bombay Rent Act. Therefore, it recognized the need of giving the premises on Leave & Licence basis as a practical solution, to this problem and, consequently, made a specific provisions by way of Section 13A2 for giving the residential premises on licence basis, which also provided that in case of the failure of the licencee to deliver the possession of the licensed premises on the expiry of the period of licence , the licencee could be summarily evicted from the premises by the Competent Authority as per the provisions of Section 31D of the said Bombay Rent Act. Again Section 13A2 does not provide for any specific period of a licence and further clarifies that an Agreement of Licence in writing shall be conclusive evidence of fact of the licence. By virtue of Sub-Clause (V) of Section 17(2) of the Indian Registration Act, and Instrument or Deed, which by it does not create any right, title or interest in an immovable property does not require registration. As stated above, a licence has been defined in Section 62 of the Indian Easements Act as an act, which does not create or transfer any interest in an immovable property. When the concept of Leave and License has been recognised by the aforesaid Bombay Rent Act by Section 13A2, which does not provide for any specified period of licence and an agreement of Leave & Licence, which does not create any right title and interest in an immovable property does not require registration under the Indian Registration Act, the author is of the opinion that a Leave & Licence Agreement for more than 11 months is legally valid and can be entered into for a period for more than 11 months , and such an Agreement can simply be executed on a non-judicial stamp paper of Rs. 20/- as per Bombay.

pls refer different states registration act...


Delhi
Department of Revenue

Haryana -
http://revenueharyana.gov.in/html/ac...LE%20book3.pdf

Department of land resouces (Govt of India)
REGISTRATION ACT, 1908
 
Old February 10 2012, 08:31 PM   #9
 
 
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Thanks, fritolay_ps . Need to study all the links .
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Old February 10 2012, 08:39 PM   #10
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Few year back, I opted for rental house and landlord (lawyer) did not want to go for more than 11 month leased deed… I insisted but finally had to go for 11 months.

Now if you go to Delhi OR any court to register your lease agreement, local lawyer will not register ur leased deed unless it is made with more than 11 months
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