Here’s why rental agreements
are made for 11 months
Along with saving money on
the stamp duty and registration fee,
there are many other benefits to renewing rental agreements every 11 months. Read on to know why most tenants and
landlords prefer this arrangement
As a tenant, one desires to get the ideal house on an
affordable monthly rent. However, while
signing the agreement, you might have probably wondered why it is made for 11
months and not a full year. Here’s why
some tenants and landlords prefer the 11-month tenure for the rental agreement:
Study the documentation
A rental agreement, also known as a lease agreement, is a
legal document signed between the landlord and the tenant. It is usually drafted on stamp paper. It lays down all the conditions for both
parties to follow and safeguards the interest of both parties too.
It is an
important document that protects the rights of the landlord and tenant and
prevents unscheduled rental hikes and eviction without prior notice of at least one month.
A typical
rental agreement consists of components such as the security deposit, monthly
rent, information regarding the property ( square footage, address, and type ),
contents of the property, and most importantly, the duration of the agreement. The rental agreement has to be signed by the
landlord and tenant, as well as two witnesses who are not related to either the
landlord or tenant.
The duration of the agreement
A rental agreement is a crucial document to resolve any
future disputes between the landlord and their tenant. Across India, the rental agreement is usually
made for a period of 11 months. This is
because according to section 17 of the Indian Registration Act, 1908, every
agreement for the leasing of immovable property from year to year, or for any term
exceeding one year, is required to be compulsorily registered. Thus, this section will be applicable on
lease agreements that last for a year, significantly increasing the cost. In order to avoid the registration of the
rent agreement, most agreements are drafted for a period of 11 months instead
of 12 months.
Another significant reason for the 11-month rent agreement is that once
an agreement is registered, it gives the tenant certain rights to the property
itself. This can turn out to be in the tenant’s
favour under the Rent Control Act and a tricky situation for the landlord if
the tenant does not move out. Because,
under this Act, tenants can claim ownership of the property after staying in
the same premises for at least 10 years.
The landlord has no recourse to evict the tenant or even increase the
rent if the rent agreement is registered.
For a longer tenure
It is not mandatory for a landlord to draft an 11-month
rental agreement. If tenants want a
longer tenure, the landlord can extend the rental period provided the rental
agreement is registered legally. In
fact, even an 11-month agreement can be renewed and extended on mutual agreement
between the landlord and tenant. A
registered rental agreement prevents landlords from overcharging and gives
tenants more rights, as it is governed by rent control laws.
Registration and stamp duty
As a tenant, if you’re seeking a longer tenure, then inform
your landlord about the exact period so that the agreement can be drafted
accordingly. The parties then need to
visit the sub-registrar office under whose jurisdiction the property falls, pay
the stamp duty on the tenure of the lease, and register the lease
document. The registration of the rent
agreement can also be done online.
Stamp duty
rates and laws vary across states in India.
Thanks - TIMES PROPERTY
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