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Registering The Rent Agreement: Landlord Or Tenant's Responsibility?
February 10 2012 , 10:52 PM   #11
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Hi Fritolay,
Thanks a ton for such an invaluable post.

Would you say that 11 month lease and license agreement is a much better option for landlord to protect themselves in case of an overstay? If this is the case then registering the lease with the notary public would be sufficient on say Rs 100 stamp paper or does it again have to be properly registered?

Never heard of 48 months security deposit and it is definitely a lot for Mumbai? Do you have any idea about the security deposit for Haryana - primarily for Faridabad or Gurgaon? I am hearing different answers from various sources - ranging from 1 to 3 months. 1 month is the most I heard, but it looks quite less to me, so would like to know what is considered kind of safe?
February 10 2012 , 11:21 PM   #12
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25% Rent Increase

can landlord add following clause in lease agreement:
"if tenant stay beyond 11 months(i.e. period of agreement), it would be presumed that tenant agree to increase rent by 25% EACH YEAR"

In my opinion, recovery of rent is easy as compare to getting property vacated. If tenant refuse to vacate the property than Landlord can file suit for recovery of rent with 25% increase. Even if tenant contest in court against vacation, he has to deposit increased rent each month with court till the case settle and it would be difficult for a tenant to keep possession of property with such a big hike.
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February 10 2012 , 11:33 PM   #13
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But i guess such agreements are void mr parascam.. Because a person has to make another agreement after 11 months... It can be implied that tenant has agreed for an hike.. Its law..
February 10 2012 , 11:35 PM   #14
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I think what he meant to say is that in case tenant continued to stay without a new agreement after 11 months, then the rent liability would be a increase of 25% for the time he/she overstays.
Correct me if I am wrong.
February 11 2012 , 07:45 AM   #15
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25% increase clause

Yes, if tenant continue to stay beyond 11 months than he also agree for 25% rent increase(as agreed in agreement).

believe me, getting possession of property back is a very time consuming process however recovery of rent is easy.
February 11 2012 , 08:47 AM   #16
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Quote:
Originally Posted by djvjain
Hi Fritolay,
Thanks a ton for such an invaluable post.

Would you say that 11 month lease and license agreement is a much better option for landlord to protect themselves in case of an overstay? If this is the case then registering the lease with the notary public would be sufficient on say Rs 100 stamp paper or does it again have to be properly registered?

Never heard of 48 months security deposit and it is definitely a lot for Mumbai? Do you have any idea about the security deposit for Haryana - primarily for Faridabad or Gurgaon? I am hearing different answers from various sources - ranging from 1 to 3 months. 1 month is the most I heard, but it looks quite less to me, so would like to know what is considered kind of safe?
In NCR... 3 month rent is given as deposit... in Bangalore... many ask for 10 month... in Mumbai... it is up to 36-48 months...OR if rent is 20K than deposit could be 4-8lakh..


but 11 month is too short and after 11 month leased deed, if landlord increase 25% OR based on market rate rental (Gurgaon, Delhi)which is anyway more than 15% pa... than you dont have choice to pay it

Faridabad/Gurgaon should not be more than 3 months. that is sure..
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February 11 2012 , 08:52 AM   #17
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Quote:
Originally Posted by parasscam
can landlord add following clause in lease agreement:
"if tenant stay beyond 11 months(i.e. period of agreement), it would be presumed that tenant agree to increase rent by 25% EACH YEAR"

In my opinion, recovery of rent is easy as compare to getting property vacated. If tenant refuse to vacate the property than Landlord can file suit for recovery of rent with 25% increase. Even if tenant contest in court against vacation, he has to deposit increased rent each month with court till the case settle and it would be difficult for a tenant to keep possession of property with such a big hike.
Rent agreement is made based on both parties acceptance and both agreed on all T&M.

I have seen many new clauses which no one even can not imagine...these clauses are made in high cost rental (50-2 lakh/pm in posh Delhi OR Mumbai)

-if tenant break lease than security deposit can be forfeited
-tenant cannot take own furniture/curtains/light after leased deed expire
- apart from rental.. another clause is to pay monthly maintenance which is more than 3-5k/pm and again security deposit for maintenance also
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February 11 2012 , 09:18 AM   #18
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Careful while getting that lease agreement

Taking a few precautions, such as making sure that the agreement is stamped, can go a long way in safeguarding your rights as a tenant
Proper execution of a lease agreement is of vital importance to safeguard the rights and interests of a lessee (the tenant) in the leased property.

Improper execution can create difficulties in enforcing the terms of lease agreement if a dispute arises between the lessor (the landlord) and the lessee. Taking a few precautions, such as making sure that the agreement is stamped and if required, registered, can go a long way in safeguarding the rights of the lessee.

Under Indian law, lease agreements are required to be adequately stamped. The rate of stamp duty varies from one state to another. It is recommended that legal advice be sought to determine the stamp duty payable.

Inadequately stamped documents are not admissible as evidence in a court of law. This may become an issue if there is a dispute between the lessee and the lessor. However, such documents are admissible on payment of the amount required to make up for such duty together with the penalty prescribed by the applicable stamp duty legislation.

Further, certain documents, including leases of immovable property from year to year or for a term exceeding one year or reserving a yearly rent, are to be compulsorily registered within the prescribed time frame.
An agreement that requires compulsory registration must be registered within four months of its execution.

For registration, the lease agreement should be presented to the office of the sub-registrar within whose jurisdiction the property is located.
Delay beyond the fourmonth period due to unavoidable circumstances may be condoned by filing an application before the sub-registrar.

A superior officer, the district registrar, can excuse the delay up to eight months from the date of execution of the agreement with the payment of a fine.

Registration, however, is not possible once eight months have passed after the date of execution of the agreement.

The main consequences of non-registration of a document compulsorily registrable are that, in the event of a dispute, the document will not: (i) affect any immovable property comprised therein; (ii) confer any power to adopt; and (iii) be permissible as evidence in a court of law in relation to any transaction affecting such property. The status of a lessee will be that of a month-to-month tenant, and under law, the lease can be terminated by a lessor by giving 15 days' notice in writing.

Therefore, the exposure of eviction from the leased premises is high.

In case a lease agreement has been improperly executed, steps should be taken to rectify the defect. If adequate stamp duty has not been paid on the lease agreement, the document can be presented for stamping to the local collector of stamps.

If a compulsorily registrable lease agreement has not been registered within the prescribed time, a fresh lease agreement should be executed and registered. Taking these simple steps will help ensure peaceful possession of the leased property and help avoid legal complications later.
The author is an associate at Trilegal, a law firm based in New Delhi. The views expressed in the article are that of individual lawyers and not particularly of the firm


-HT
February 11 2012 , 09:20 AM   #19
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Another important question - how is the lease suppose to be registered for lets say 11 months. Is it important that the proper registration (not just notary public) needs to be done in case dispute occurs and police gets involved?

Fritolay Bhai, what do you mean by this sentence - "but 11 month is too short and after 11 month leased deed, if landlord increase 25% OR based on market rate rental (Gurgaon, Delhi)which is anyway more than 15% pa... than you dont have choice to pay it"? If it is short then whose benefit it is for - landlord or tenant?
February 11 2012 , 09:33 AM   #20
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when you go for rent agreement... you sure want to go for long period leased deed and not 11 months deed and again go for 11 months....

Suppose after 11 months when your leased dead expired... and landlord ask for 20-25% increase than either you leave the house and search new lease and again pay household shifting and pay charges and tension… so you have to pay 20-25%...


But in long term leased deed, many landlord do not agree with 10% rent increment since market rate is more than 10% in Delhi/Gurgaon...if you find any suitable house and good landlord who is agreed on 10% increment and that too 3-5 years.. this is very rear chance in current days..
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