Also known as ‘Leave and License Agreement’, the rent agreement mentions the property details, the security deposit, monthly/annual rent, the name of the tenant and the owner of the property, and other terms and conditions. It is a legal document that can be produced in court whenever there is a dispute between the owner and the tenant.
In Delhi, it is mandatory to register a rent agreement if it is for a period of more than 11 months. In case of less than or equal to 11 months, registering a rent agreement becomes optional. Let us delve further into the rent agreement details and its registration process
Cost of registering rent agreement in Delhi
| Rental Period | Stamp Duty (% of Consideration Value) | Registration Charges |
|---|---|---|
| Less than 5 years | 2% | Rs 1,100 |
| 5 - 10 years | 5% | Rs 1,100 |
| 10 -20 years | 5% of double the consideration value | Rs 1,100 |
Note: Consideration value refers to the average annual rent payable, as mentioned in the agreement.
Process of registering rent agreement in Delhi
Here are certain steps to follow for registering the rent agreement in Delhi:
Get a print of the rent agreement on the stamp paper of due value.
The owner and the tenant should sign the rent agreement in the presence of two witnesses at the sub-registrar office. Hence, make sure that the witnesses are ready and reach the sub-registrar’s office on the day of registration.
Once you have complied with all the formalities, pay the requisite fees at the sub-registrar’s office to register the agreement.
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How to draft the rent agreement document?
Here's how to draft the rent agreement document:
- Clearly mention the monthly rent, security deposit, maintenance charges, and any other terms and conditions in the agreement. Ensure that both parties agree to the points stipulated in the document
- Mention the names of the tenant and the of the property and the address of the rented property
- Specify the notice period that the tenant has to serve before vacating the property
- Clearly state the tenure of the rental agreement
Once you have filled in all the details, purchase a stamp paper of recommended value to print the draft. Post that, you may visit the sub-registrar office (SRO) to register the document as mentioned above.
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Procedure for e-stamping the rent agreement in Delhi
If you are e-stamping your rent agreement, visit the Stock Holding Corporation of India Limited (SHCIL) website, where you do not need a physical stamp paper. But if you are uncomfortable with it, you can order the physical stamp paper online procured from the nearest SHCIL branch or designated bank offices.
Documents required for rent agreement registration
- Proof of property ownership, i.e. property sale deed, registration document and property tax receipt, among others
- Passport size photos of the owner as well as the tenant
- Authorisation letter from the company in case the lease is being registered under a company’s name
- Address proof of the property to be registered
- Address proof and photo ID proof of the tenant (Original passport mandatory for foreign nationals)
- Address proof and photo ID proof of the owner
- Demand Draft of the Registration amount
- Two witnesses, along with their photo ID proofs
Consequences of not registering the rent agreement
An unregistered deed cannot be presented as evidence in court in case of any litigation. Hence, it is important to execute a rental agreement and register it in the sub-registrar office.
Consequences of not paying the stamp duty
Generally, people use stamp paper of minimum values like Rs 100/Rs 20/Rs 50 to save money from paying the actual stamp duty prescribed by the government. This works well if there is no litigation. But, if the agreement reaches the court, the court impounds the agreement for deficit stamp duty paid. The court can also impose a fine as high as 10 times the original stamp duty. Hence, it is the best to pay the requisite stamp duty while making the agreement.
Also, you must opt for registration of a rent agreement in Delhi to avoid any loss in the future if the tenant backs out on paying the rent or refuses to vacate the property. Remember, registration fees and stamp duty must be paid before presenting your rent agreement in court.
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