00:00Hello friends, this is advocate Tasman Singh from NRI Legal Services.
00:05We regularly receive a lot of queries on tenant and landlord issues.
00:11These issues range from disputes arising between the lesser and lessee or questions regarding
00:17how to have contractual binding agreement with the tenant which would be completely
00:23protective in the scenario where a dispute arises.
00:27So I am going to cover the entire landscape which governs the relationship between a landlord
00:33and a tenant in two videos.
00:36In the first video, we would discuss all aspects of what a perfect rental agreement looks like,
00:44which should be completely sufficient in case there is a conflict between the two parties.
00:51In the second video, I would discuss in an in-depth manner the legal landscape which governs
00:58the relationship between a landlord and a tenant in different parts of India.
01:04So what is a rental agreement?
01:07A rental agreement is a binding agreement between the landlord and the tenant which defines the
01:14terms and conditions of the tenancy comprehensively from the perspective of both parties.
01:21In the earlier days, the understanding between the two could have been oral, verbal or even
01:28outside.
01:29But today, with the property prices surging and housing demands and supply both hitting the
01:35sky, it is advisable for both the landlord and the tenant to secure themselves by executing
01:43a written rental agreement which comprehensively defines all terms and conditions in an acceptable
01:50legal format to serve as evidence in any court of law in case a dispute arises.
01:59Most people draft and execute a rental agreement while letting out or renting a house, apartment
02:07or commercial space for rent.
02:10The most important fact before executing a rental agreement is to remember its sole purpose,
02:18which is to enshrine the complete understanding between the two parties in such a way that
02:24could hold in any court of law if either side does not keep their part of the bargain.
02:32So a background knowledge of the governing laws of the state is a must in which it needs to
02:38be applied.
02:41To achieve this, I cannot stress more that a rental agreement should always be drafted and
02:47executed with the guidance of a professional legal expert rather than using boilerplate templates
02:55or with the sketchy knowledge of real estate brokers.
03:00The important points to be covered in a valid rental agreement are as follows.
03:07Number one, rent and deposit.
03:10Number two, payment of utilities like electricity and water charges.
03:15Number three, damages, repairs and alterations.
03:19Number four, tenants responsibilities.
03:23Number five, owners responsibilities.
03:26Number six, payment of maintenance charges.
03:29Number seven, lease termination and extension.
03:34And lastly, miscellaneous clauses like visitation rights of the landlord, etc.
03:40So remember, an error-free, comprehensive and conclusive legal rental agreement should be
03:47executed and registered with the local authorities to document and to enforce all general specific
03:55clauses contained therein.
03:58To make it legally enforceable, keep in mind the following points.
04:03Number one, prepare the document in the specific format as per the convention and laws pertaining
04:10to that area.
04:12The stamp duty of the appropriate value needs to be paid and then the document needs to be
04:18printed on the stamp paper of the recommended value.
04:22A stamp duty paid rental agreement is considered a proper and legally valid document.
04:30It has evidentiary value as it is admitted as documentary evidence in courts.
04:37The rental agreement draft should be printed on a stamp paper of a suitable stamp value according
04:43to the Stamp Act of each state to make it legally valid.
04:48Next, ensure that both parties, the landowner and the tenant, sign at the bottom of each page
04:55and at the end.
04:58Signatures of the witnesses along with the name and addresses should also be included, with
05:04details of fixatures and schedule of the property as an attachment.
05:10Now, let's discuss types of rental agreement.
05:14Most commonly found agreements are of a period of 11 months only.
05:19The reason for this is that any agreement exceeding 11 months will have to be registered with the
05:26stamp duty paid.
05:28Agreement of 11 months and less are valid and can skip the formalities of the registration
05:34process.
05:35Hence, are very commonly found in India.
05:39Next, long term lease.
05:41Another popular mode of renting is on a long term lease for a certain number of years.
05:47There is no monthly rent payable by the tenant.
05:51At the end of the term of lease, the owner has to return the lease amount to the tenant.
05:56Electricity, water and maintenance charges have to be paid regularly by the tenant.
06:02There is no interest paid on the lease amount.
06:06Next, commercial rental lease.
06:08The procedure of registration and stamp duty are the same as residential properties for
06:14renting of the commercial properties also.
06:17The procedure for registering a commercial lease and the stamp duty associated with it are
06:23very similar to that of rental agreements.
06:27Even though registered commercial leases are for much longer periods and also some residential
06:33ones as well.
06:35There is no bar on the duration of the lease and should be mentioned in the agreement.
06:41General and specific clauses refer following issues and should be made part of the document
06:48on mutual consent of both parties.
06:501.
06:51Visitation rights of the landlord to inspect his property.
06:55Generally, after the property is tenanted, the rights of the tenant are absolute and a landlord
07:01cannot just visit the property at his own free will unless he is in possession of a portion
07:06of the property or else his rights are clearly elucidated in the rental agreement.
07:12For all else, he will have to seek the tenant's permission to visit once the tenancy commences.
07:192.
07:20For deposit by the tenant, there are no rental laws governing this.
07:25So, it has to be decided as per the mutual understanding which should be a part of the agreement
07:31that whether a tenant will pay one month rent as a deposit or three or even ten months covering the entire
07:39period of the lease.
07:40It is also negotiable.
07:423.
07:43Payment of maintenance charges by the tenant is also a variable clause and needs to be
07:49clearly reflected in the agreement as to who is responsible for paying the same for maintenance
07:55of common facilities of the property.
07:58Even though the tenant is liable to pay for it mostly but in some cases the landlord is responsible
08:05to pay the maintenance charges to the society after duly collecting it from the tenant included
08:11within the rent.
08:13This needs to be clearly mentioned in the agreement as well.
08:184.
08:19Notice period to terminate the lease can vary from one to three months and this needs to
08:25be clearly mentioned with mutual understanding in the agreement.
08:30Same applies for an early termination if need be.
08:345.
08:35Any other special privileges or rights extended to a tenant or a landlord clearly needs to
08:42be mentioned.
08:43If not contained in the agreement and done, it will be constituted as a violation and can
08:49be grounds for eviction or injunction against the landlord.
08:536.
08:54The lock-in period.
08:55The period before which neither the owner nor the tenant can terminate the agreement.
09:017.
09:02Pets.
09:03Whether the tenant can have pets in the rental property also has to be mentioned.
09:088.
09:09Overstay.
09:10If the tenant continues to stay in the rental property even after the agreement term has ended,
09:15the owner can charge on per day basis.
09:189.
09:19Penalty for late payment.
09:2010.
09:21If the tenant fails to pay the rent on the scheduled date, a small penalty or fine can
09:26be charged by the owner.
09:2810.
09:29Painting maintenance and repairs are to be included in the agreement mentioning clearly the duties
09:35of the landlord or owner and that of the tenant.
09:39Now let's talk about broad procedure to make a rental agreement.
09:431.
09:44Draft the agreement with the help of professional guidance.
09:482.
09:49Take a print of the agreement on stamp paper of appropriate amount of the stamp duty to
09:56be levied.
09:573.
09:58Both parties should sign the agreement in the presence of two witnesses who would attest the
10:04document.
10:054.
10:06Register the agreement at the sub registrar's office paying the appropriate registration
10:12fee.
10:13Let's have deeper understanding of stamp duties and the registration process.
10:195.
10:20More and more developed towns especially in Maharashtra and other developed states are digitizing
10:26rental agreements and there is no need to even take any printouts and stamp duties can
10:31be paid as a fee separately.
10:335.
10:34Stamp Duty.
10:35It is the duty paid to the government on any agreement or transaction taking place.
10:416.
10:42Stamp duty is valued on the basis of the value of the transaction.
10:467.
10:47It is paid to the government by purchasing a stamp paper of the due value.
10:51There are two kinds of stamp papers, the traditional stamp paper and the e-stamp paper.
10:58More and more states are now adopting e-stamping and doing away with the traditional stamp papers.
11:07For example, most major metropolitan towns have shifted entirely to the e-stamping system
11:15operated by Stockholding Cooperation of India.
11:20If a person needs stamp paper, he can approach the e-stamping vendors and purchase it from them.
11:27You need to provide your name and the purpose in the application form.
11:32The conventional stamp papers are now less and less in use.
11:377.
11:38Registration.
11:39Charges related to registration.
11:42As property is a state subject, the registration amount varies for each state.
11:48General approximate guidance is for lease deeds up to 5 years, which is between 1.5% to
11:542% plus a possible 100 rupees for the security deposit paid.
11:59Up to 10 years, it could range from 3% to 5% and more than 10 years to 5% to 6%.
12:07Consequences of not paying the stamp duty or registration charges.
12:11An inappropriate stamp duty paid can result in penalties in case of dispute by the court,
12:18leavening a 10 times penalty to even make a rental agreement good in law.
12:24Registration of rental agreement where needed and not done can have fatal consequences for
12:31the agreement losing its evidentiary value in the court of law as the binding contract between
12:38the two parties.
12:40So, till there is no dispute, people do not realize the value of a rental agreement which
12:47is duly stamped and paid and registered.
12:52Shortcuts, thus, should be avoided while executing such important contracts.
12:58Documents to be presented by the owner for registration are
13:021.
13:03The original proof of ownership or title of the property.
13:072.
13:08Two passport size photos.
13:103.
13:11Aadhaar card or its receipt while applying for it is mandatory.
13:154.
13:164.
13:17ID proof like driving license, voters ID and passport etc.
13:215.
13:22The rental agreement printed on the stamp paper.
13:256.
13:26D.D.
13:27That is demand draft of Rs. 1100 towards registration charges.
13:32Documents to be presented by the tenant for registration are
13:361.
13:37Two passport size photos.
13:392.
13:40Aadhaar card or the receipt received while applying for it.
13:432.
13:44If the person is an Indian, if the person is a foreigner, then the original passport is
13:50needed.
13:513.
13:52If the tenant is a company, then the person coming for the registration should bring a
13:57board resolution or an authorization letter from the company mentioning the person's
14:03right to register the lease along with the company C.
14:074.
14:08If one person represents another person for the registration, then the power of attorney
14:15deed should be brought.
14:174.
14:18Do not confuse notarization with registration.
14:21Notarization of the rental agreement is optional as notarization is not registration
14:28and can never replace it.
14:30Courts do not accept them as evidence in case of disputes.
14:34Even if the deed is notarized, you still need to register it.
14:39Notary seal simply states that you have attested it in front of a notary public.
14:45So, I earnestly hope that you are now better informed about rental agreements in India.
14:51However, we will still be happy to address all queries regarding rental agreements and any
14:56guidance or consultation if needed.
14:59Simply reach out to us at query at the rate nrilegalservices.com and our team will promptly
15:05respond.
15:06Thanks and have a great day.
15:08Have a great day.
15:09Have a great day.
15:13Bye.
15:14Bye.
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