How to register a rental contract?
NEW DELHI: Registration of the rental agreement It has become an arrangement par excellence in India. Therefore, it is mandatory for both tenants and owners to register their rental agreements (for more than one year).
Ergo, if you live in rented accommodation or if you are running a commercial business on leased land, registering a rental agreement of more than one year becomes an obligatory exercise. Au contraire, if the rental agreement is set up for tenure for less than one year, you only require to pay the stamp duty.
Let's quickly take a walk through the different steps of registering a rental agreement :
Paying stamp duty for a rental agreement
1. Rental contracts of less than one year.
All tenants who have set up a rental agreement of fewer than 12 months need to pay stamp duty that's equal to 2% of the annual rent.
2. Rental contracts between one and five years.
In this scenario, the stamp duty payable is 2% of three times the average annual rent.
3. Rental contracts between six and ten years.
Tenants who have signed rental agreements that are between 6 and 10 years old must pay 2% of four times the average annual rent.
4. Rental contracts between eleven and twenty years.
The stamp duty that users must pay under this type of rental agreement is 2% of five times the average annual rent.
5. Rental agreements beyond twenty years
The stamp duty payable, in this case, is 2% of six times the average annual income.
What is the process to register the rental agreement ?
Only the rental agreement s of more than one year should be registered. For other agreements that are of less than one year (for instance of 11 months), notarizing it with a notary public and paying up the stamp duty is good enough and credible.
So, a step-by-step procedure for registering a rental agreement goes like this:
- Principalmente, debe esbozar un rental agreement con cláusulas preferidas que incorporen elementos relacionados con el depósito de seguridad y el alquiler (que pagará).
- Once this is done, you must obtain the rental agreement printed on a specific value stamp paper (see previous section).
- Both tenants and landlords need to sign at the designated places on a rental agreement .
- Along with this, it is also necessary to obtain the signature of two witnesses who are not related to tenants or landlords in any way.
- After this, both the landlord and the tenant are required to be physically present in the sub-registry office of their sub-locations.
- Both tenants and owners together with the two witnesses must carry their passport-sized photographs and identification cards for validation.
- Registration of the rental agreement is not allowed by another person or an agent.
- As soon as you pay the stamp duty, the registration deed is completed.
What are the rental contract registration fees?
Typically, an amount of Rs 1100 is needed to be paid for the registration of a rental agreement . This registration fee is payable regardless of the rental amount or property value. The stamp duty charges are also applicable to this registration charges.
Penalty for not registering the rental agreement
Anyone who fails to register the rental agreement with the authorities may end up paying a hefty penalty up to 10 times the original amount plus the stamp duty charges and the remaining registration charges. Defaulters will also be obliged to pay a fine at an interest rate of 18% from the date the rental agreement started.
Documents needed for the rental agreement registration
- Original copy of proof of ownership or a copy of the title of the property.
- Two passport-sized photographs (tenant, landlord and two witnesses)
- Aadhar card
- A proof of identification authorized by the government (voter identification, passport and driver's license)
- If the tenant is a registered company, a letter of authorization from the company is needed that validates the right to register the lease.