Lease agreements have become immensely popular with individuals and firms across the country. With the lease agreements available in two types-registered and unregistered, people should comprehend the usefulness of both, and get them accordingly. If people feel the need, they can either opt for Registered Rent Agreement or get unregistered ones registered.
What is the difference between unregistered and registered rent agreements?
- The validity of agreement: Unregistered rent agreements are valid for only for a maximum duration of 11 months, whereas Registered Rent Agreement is valid for any period.
- Cost: Unregistered agreements can be made at a fraction of the costs of the development of registered ones. For getting registered agreement landlord/tenant/both have to pay additional fees like stamp duty charges, registration fees, security deposit fees, fees of lawyers, and additional costs if any.
To get a registered Online Rent Agreement Delhi, the applicant has to pay a stamp duty charge of 2% on the total average annual rent of a year, for a leasing period of 5 years. If the owner is asking for a security deposit, then an additional charge of flat 100Rs is levied extra.
A flat registration fee of 1100Rs is also needed to be paid in the form of a demand draft. If the lease duration exceeds 5 years, but less than 10 years, then stamp duty charges are hiked to 3%. For registered Online Rent Agreement Delhi, with a leasing period ranging between 10 to 20 years, stamp duty charges go up to 6%.
The reason behind different types of lease agreements:
There are two separate kinds of lease agreements available in the Indian markets, due to the Registration Act, 1908. This act states that registration of a lease agreement is necessary if the leasing period of the contract is more than 12 months. Due to this obligation rent agreements are available in two separate types.
Where can rent agreement be registered?
For getting a lease agreement registered, landlord and tenants have to:
- Visit their nearest sub-registrar’s office. However, it must be noted that the registration should be done at least four months before the date of the deed expiration. After expiry, a fresh deed is to be created for all legal documents requiring registration, excluding wills of property.
- Be present: To get the rent agreement registered, both tenant and landlord must be present before the sub-registrar.
- Witness: Both parties should have two witnesses who need to carry identification proofs along with passport size photographs.
- Payment of stamp duty: For completion of registration of the document, payment of stamp duty is required.
If somebody or an organization says that they will register your lease agreement; then they are luring you in a trap. Registration of lease agreements can only be done in front of a sub-registrar, signed by both parties and two unrelated witnesses.
Essential documents for lease agreement registration:
- The government authorized Identity proofs such as passport, driving license or Voter ID card
- Aadhar Card
- Two passport size photographs of landlord, tenant, and both witnesses
- Proof of ownership in original or a copy of the title in the name of the property
- In case the tenant is an organization or a registered company, a letter of authorization is required from the company which validates the right to register the lease.
Penalty:
If anybody violates the law and fails to register his/her/their rent agreement in time, then he/she/they have to pay a heavy penalty of 10 times the original amount with stamp duty charges and left registration charges. They also have to pay a fine at an 18% interest rate from the date of commencement of the agreement.
What should you do?
People should approach the frontrunner firms of the domain such as Rentagreement.in, who provide genuine and correctly drafted lease agreements. Rentagreement.in also provides correct guidance and customer support to the people, so that they don’t fall into lucrative schemes/traps.