As per the provisions of Section 55 of the Maharashtra Rent Control Act, 1999, every tenancy agreement, regardless of its tenure, must be in writing and should duly comply with the stamp duty and registration laws associated with the rental property.

When renting out a property or taking one on rent, there are a host of legal formalities involved. All agreements for leave and license must be stamped and registered. While this remains the basic rule, the rates and laws vary in accordance with the state you wish to lease a property in. For the purpose of this article, let’s take a look at the stamp duty and registration laws for a rental property in the state of Maharashtra.

Stamp Duty in Maharashtra

The stamp duty on lease agreements in Maharashtra is governed by the Bombay Stamp Act, 1958. It is administered by Article 36 read with Article 25 of Schedule 1 to the Act. All leave and license agreements must be stamped with a flat stamp duty charge of 0.25 percent of the total rent for the period. Note that the rate of stamp duty is the same for both residential properties as well as commercial properties, for a period not exceeding 60 months.

There are three ways to pay the stamp duty, viz. non-judicial stamp paper, e-stamping, and franking. In case of the non-judicial stamp paper procedure, the agreement consists of all details pertinent to the leave and license and is signed by the executants. Within the next four months, the agreement must be registered at the sub-registrar’s office.

The franking method, on the other hand, requires the agreement to be printed on plain paper, which is then submitted to a bank. The bank processes the documents by means of a special franking machine.

It is important to understand that, while stamp duty can be saved under certain circumstances, paying inadequate stamp duty can lead to a heavy penalty for the evasion.

Property registration laws in Maharashtra

As per the provisions of Section 55 of the Maharashtra Rent Control Act, 1999, every tenancy agreement must be in writing with mandatory registration, regardless of its tenure. One simply needs the tax receipt of the tenant, landlord, a few documents of the witnesses like passport-size photos, ID proof, electricity bill, and property documents.

The registration fee for tenancy agreements in Maharashtra varies from location to location. For instance, for properties that come under the municipal corporation area, the registration fee is Rs. 1000. For rural areas, on the other hand, it is Rs. 500. It is extremely important that both the landlord and the tenant get the rent agreement registered, as failure to do so could lead to penalising the landlord in the form of three months of imprisonment, and a fine of Rs. 5000.

Registering the tenancy agreement is also crucial for tenants in the way that the agreement consists of all provision regarding the lease. This document can aid in the resolution of any dispute that may arise between the landlord and tenant.