Rental Agreements in India: Key Insights for Tenants & Landlords

In a world where buying property is no longer an option unless you’ve saved for more than your lifetime, renting has become the next best thing. A rental agreement is important for people who are looking to rent their properties, for people who are looking into renting a property and of course, anyone looking for a mode of shelter in a big city. Now, what exactly is a rent agreement?

What is a Rental Agreement?

A rent agreement is a legal contract that is made between the landlord of the property and the tenant who wishes to live there. Interestingly enough, it is one of the legal documents we don’t pay much attention to, but we should.

The agreement is a crucial legal document/contract which includes all the information, terms, conditions and clauses that come along with letting out a property on rent. It consists of components like security deposits, your monthly rent, information regarding the property, like size, address, type and of course the duration of the agreement. It is of utmost importance that you go read carefully the rent agreement, rules and clauses, before signing it.

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For the majority of the population who had dealt with properties or rent, it hasn’t always been smooth sailing, there’s always some instance or experience that led to some bumps along the way, and this has the possibility of causing friction in the tenant-landlord relationship. That’s why it is important to work on a rental agreement with both parties, to avoid any issues along the way.

According to the Registration Act of 1908, the registration of a rent agreement is of crucial importance if the renting period is more than 12 months. The agreement is important for both the person renting and the landlord as it brings about a property safeguard for the landlord, as well as protects the tenants from dealing with any illegitimate demands by the landlord.

The Process of Preparing a Rent Agreement

It is mandatory to register a rent agreement in India for anyone to reside – be it owners/landowners or tenants looking for a place to stay – residential or commercial or otherwise. Below are the steps involved in registering a rental agreement in India. Note that it is important for rent agreements of more than a year to be registered, and for agreements that are less than a year (i.e. less than 11 months), ensuring that it is notarised by a public notary along with stamp duty is good enough to become credible.

• Prepare an outline of a rent agreement with the preferable clauses related to rent and security deposit
• Get the rental agreement printed on stamp paper with an assigned value
• Get the signature of both the tenant and landowner on the designated places of the rental agreement
• Along with the tenant and landowner, visit the sub-registrar’s office at the relevant sub-localities
• Carry a copy of the passport-size photographs and ID cards for individual verification and validation
• As soon as the stamp duty is paid, the registration of the rent agreement is completed. The charge typically is about Rs 1100, regardless of the property value or rental amount

The registration process needs the Following Documents

The following are the important documents needed for a rental agreement registration in India:

1. Original proof of ownership or title of the property. This could be a sale deed, lease deed, or any other document that shows that the landlord is the legal owner of the property.
2. Property documents such as Index II or tax receipt of the property to be leased.
3. Two photographs of each of the parties and one of each of the witnesses.
4. Copy of the address proof of both the parties and witnesses. Any of the following documents can be submitted as the address proof: passport, Aadhaar card, ration card, bank passbook or driving license.
5. Route map of the property leased out.
6. Stamp paper of the appropriate value. The stamp duty payable for a rental agreement varies from state to state. You can check the stamp duty rates for your state on the website of the Ministry of Finance.
7. Registration fee. The registration fee is also payable to the sub-registrar's office. The amount of the registration fee varies from state to state.

How Much Does a Rent Agreement Cost?

The cost of a basic rental agreement in India can vary depending on the state, the city, the property type, and the duration of the agreement. However, in general, the cost of a rent agreement is made up of two components:

Stamp duty: This is a government tax that is charged on all legal documents, including rent agreements. The stamp duty rate varies from state to state, but it is typically between 0.5% and 2% of the annual rent.

Registration charges: This is a fee that is charged by the government for registering a rent agreement. The registration charges also vary from state to state, but they are typically between Rs. 500 and Rs. 1000.

Difference Between Lease and Rent Agreement

If you’d like to know about the lease vs rent agreement, the primary difference is the period covered by the contract. While a rent agreement tends to cover a short period i.e. a month, 6 months, 12 months, and even 18 months, a lease contract applies to much longer periods such as 99 years. Both have several similarities as well including specified security deposit, rental amount, utility and maintenance costs and responsibilities, rules of usage, allowance of pets, etc.

11 Months Rental Agreement Format

When a rental agreement is created for a fixed time, all the pre-discussed terms and conditions are mentioned within the format. An 11-month rental agreement format in Word for example, looks like something below, encapsulating everything from who the agreement is executed by, the day on which it is executed, the details of the tenants and landlord, the rent decided, to the purpose of the use of the property as well as the notice period for both tenant and landlord to vacate the premises.

Registered Rent Agreement Format

As mentioned before, the registered rent agreement format includes both the details of the tenant and landlord, the terms and conditions of the rental arrangement, as well as the mention of the duration i.e. more than 11 months within the agreement. You will also need to have a notarised signature by the public notary as well as a stamp paper to add credibility to the registration. A registered rent agreement format, for example, looks like something below:

Rent Hike Process and Limitations

• Rent hikes are a common occurrence in the Indian rental market. The landlord has the right to increase the rent after the end of the lease period, subject to certain limitations. Here are some essential things that both landlords and tenants should know about the rent hike process:

• Legal Limitations: As per the Rent Control Act, landlords cannot increase the rent arbitrarily. The maximum rent increase that a landlord can ask for is 10% of the current rent. However, if the landlord has carried out any repairs or renovations to the property, they can charge an additional amount.

• Notice Period: The landlord must give the tenant a notice period of 30 days before increasing the rent. The notice should be in writing and should specify the new rent amount.

• Negotiation: If the tenant is not willing to pay the increased rent, they can negotiate with the landlord. If an agreement is not reached, the tenant can choose to vacate the property.

• Market Trends: The rental market is subject to fluctuations, and landlords can increase the rent in response to market trends. However, they cannot increase the rent during the lease period.

Steps to Follow for Rent Hike:

1. Check the Rent Control Act to understand the legal limitations on rent hikes
2. Decide on the new rent amount and the notice period that you will give the tenant
3. Inform the tenant of the rent hike in writing and give them the required notice period
4. Be prepared to negotiate with the tenant if they are not willing to pay the increased rent

Commercial Rental Agreement India Format

Essentially, a commercial rental agreement or a lease contract forms a legally binding covenant between the business tenant and the owner of the commercial property. So if you want to rent an office space for your new startup or move to a bigger place for a longer contract period, you must create a commercial rental agreement in the process. The sample below will give you a fair idea about the office rent agreement format or even a rent agreement format for shops.

The commercial rental agreement will also include several details or covenants between the tenant and the landowners including:

• The payment of rent and the frequency of payment every month/year
• The payment of electricity and utility bills within the office
• The instruction that any structural alterations cannot be made upon the rented premises without the consent of the owner
• The instruction that no one should suffer from the work done at the office due to noise or annoyance
• The instruction that no illegal activities or elicit businesses can be conducted on the premises
• The instruction to not sublet the premises to anyone else
• To replace all broken fixtures and fittings etc. over the lease period.
• The notice period for vacating the premises and the conditions of carrying out the necessary repairs etc within the notice period

Rental Agreement Format in English

Here is a sample of a rental agreement in English, for any reference in the future for your rental needs. You can also find several rooms, house, tenant agreement formats on the internet, for more insight, under names like- house rental agreement in English, pdf or word and so on. Be sure to include the relevant specific details in the blank spaces and ensure they are notarised by a public notary.

This Rent Agreement is made on this __________ (date of rent agreement) by ________________ (name of the landlord) S/o _______________ (father’s name of the landlord), Add: ___________________________________________________ (residential address of the landlord). Hereinafter called the Lessor / Owner, Party Of the first part

AND

_____________________________ (Name of the proposed company), through its proposed director __________ (name of the director) called Lessee/Tenant, Party of the Second Part

That the expression of the term, Lessor/Owner and the Lessee/Tenant Shall mean and include their legal heir's successors, assigns, representatives etc. Whereas the Lessor /Owner is the owner and in possession of the property No: ______________

_________________________________________________________________________________ (registered address of the company) and has agreed to let out the one office Room, one Toilet & Bathroom Set on said property, to the Lessee/Tenant and the Lessee/Tenant has agreed to take the same on rent of Rs. ______/- (In words) per month.

NOW THIS RENT AGREEMENT WITNESSETH AS UNDER:

1. That the Tenant/Lessee shall pay the monthly rent of RS. _________/- (In words) per month, excluding electricity and water charges.
2. The Tenant /Lessee shall not sublet any part of the above-said demised premises to anyone else under any circumstances without the consent of the Owner.
3. That the Tenant / Lessee shall abide by all the bylaws, rules, and regulations, of the local authorities in respect of the demised premises and shall not do any illegal activities in the said demised premises.
4. This Lease is granted for a period of Eleven (11) months only commencing from ___________ (date of rent commencing from) and this lease can be extended further by both parties with their mutual consent based on the prevailing rental value in the market.
5. That the Lessee shall pay Electricity & Water charge as per the proportionate consumption of the meter to the Lessor /Owner.
6. The Tenant/Lessee shall not be entitled to make structure in the rented premises except for the installation of temporary decoration, wooden partition/ cabin, air – -conditioners, etc. without the prior consent of the owner.
7. That the Tenant/lessee can neither make addition/alteration in the said premises without the written consent of the owner nor the lessee can sublet part or entire premises to any person(s)/firm(s)/company(s).
8. That the Tenant/Lessee shall permit the Lessor/Owner or his Authorised agent to enter into the said tenanted premises for inspection/general checking or to carry out the repair work, at any reasonable time.
9. That the Tenant/Lessee shall keep the said premises in clean & hygienic condition and shall not do or cause to be done any act which may be a nuisance to others.
10. That the Tenant/Lessees shall carry on all day-to-day minor repairs at his/her own cost.
11. This Agreement may be terminated before the expiry of this tenancy period by serving One-month prior notice by either party for this intention.
12. That the Lessee shall use the above-said premises for Official Purpose Only.
13. That the Lessee/Tenant Shall not store/Keep any offensive, dangerous, explosive or highly Inflammable articles in the said premises and shall not use the same for any unlawful activities.
14. That the Lessee shall pay the one month’s advance rent to the Lessor the same shall be adjusted in monthly rent.
15. That both the parties have read over and understood all the contents of this agreement and have signed the same without any force or pressure from any side.

In WITNESS WHEREOF the lessor/Owner and the Tenant / Lessee have hereunto subscribed their hand at ______ (place) on this the _____________ (date of rent agreement) year first above Mentioned in presents of the following Witnesses.

WITNESSES

___________ (name of the landlord) _________________ (name of the proposed Company)

Rental Agreement Format in Hindi

यह रेंट एग्रीमेंट ________________ (मकान मालिक का नाम) S / o _______________ (जमींदार के पिता का नाम), _________________________________________________________ (मकान मालिक का आवासीय पता) द्वारा इस __________ (किराए के समझौते की तारीख) पर बनाया गया है। इस प्रकार एफेट्रस भाग के लेसर / मालिक को पार्टी कहा जाता है

तथा

_____________________________ (प्रस्तावित कंपनी का नाम) , अपने प्रस्तावित निदेशक के माध्यम से __________ (निदेशक का नाम) जिसे लेस / टेनेंट कहा जाता है, पार्टी ऑफ़ द सेकंड पार्ट

शब्द की अभिव्यक्ति, लेस्सर / मालिक और लेस / टेनेंट शेल का मतलब है और उनके कानूनी उत्तराधिकारी उत्तराधिकारी, असाइन, प्रतिनिधि आदि शामिल हैं, जबकि लेसर / मालिक मालिक है और संपत्ति के कब्जे में है: ______________

_________________________________________________________________________________________ (कंपनी का पंजीकृत पता) और लेसियन / टेनेंट के लिए एक कार्यालय कक्ष, एक शौचालय और स्नानघर सेट को बाहर जाने के लिए सहमत हो गया है, पट्टेदार / किरायेदार और पट्टेदार / किरायेदार ने रुपये के किराए पर समान लेने के लिए सहमति दी है ______ / - (शब्दों में) प्रति माह।

अब इस समझौते के रूप में इस किराए पर लेने की आवश्यकता है:

1. कि किरायेदार / पट्टेदार बिजली और पानी के प्रभार को छोड़कर, प्रति माह _________ / - (शब्दों में) के मासिक किराए के रूप में भुगतान करेंगे।
2. टेनेंट / लेसी उप-स्वामी को उपर्युक्त के किसी भी हिस्से को किसी भी परिस्थिति में मालिक की सहमति के बिना किसी भी स्थिति में उप-नहीं करेगा।
3. यह कि किरायेदार / पट्टेदार सभी उप-कानूनों, नियमों और विनियमन का पालन करेंगे, स्थानीय अधिकारियों के लिए निर्धारित परिसर के संबंध में और उक्त निर्धारित परिसर में कोई भी अवैध गतिविधियां नहीं करेंगे।
4. यह लीज केवल ग्यारह (11) महीने की अवधि के लिए दी जाती है, जो केवल ___________ (किराए पर लेने की तारीख) से शुरू होती है और इस पट्टे को बाजार में प्रचलित किराये के मूल्य के आधार पर अपनी आपसी सहमति से दोनों पक्षों द्वारा आगे बढ़ाया जा सकता है। ।
5. कि पट्टेदार / मालिक को मीटर की आनुपातिक खपत के अनुसार बिजली और जल प्रभार का भुगतान करेगा।
6. कि किरायेदार / पट्टेदार किराए के परिसर में संरचना बनाने के हकदार नहीं होंगे, केवल अस्थायी सजावट, लकड़ी के विभाजन / केबिन, एयर - कंडिशनअपसेट की स्थापना को छोड़कर। मालिक की पूर्व सहमति के बिना।
7. यह कि किरायेदार / पट्टेदार स्वामी की लिखित सहमति के बिना उक्त परिसर में न तो जोड़ / परिवर्तन कर सकता है, और न ही पट्टेदार किसी भी गड़बड़ी (फर्मों) / फर्म (एस) / कंपनी (ओं) को भाग या पूरे परिसर को सौंप सकता है।
8. यह कि किरायेदार / पट्टेदार किसी भी उचित समय पर निरीक्षण / सामान्य जाँच के लिए या मरम्मत के काम को करने के लिए लेसर / मालिक या उसके अधिकृत एजेंट को उक्त किरायेदार परिसर में प्रवेश करने की अनुमति देगा।
9. कि किरायेदार / पाठी उक्त परिसर को स्वच्छ और स्वच्छ स्थिति में रखेगा और ऐसा कोई कार्य नहीं करेगा या करने का कारण नहीं होगा जो अन्य के लिए एक उपद्रव हो सकता है।
10. कि किरायेदार / पट्टेदार पूरे दिन अपनी मरम्मत के लिए मामूली मरम्मत का काम करेंगे।
11. कि इस आशय के लिए किसी भी पक्ष द्वारा एक महीने पहले नोटिस देकर इस किरायेदारी की अवधि समाप्त होने से पहले इस समझौते को समाप्त किया जा सकता है।
12. पट्टिका आधिकारिक प्रयोजन के लिए उपर्युक्त परिसर का उपयोग करेगी।
13. यह है कि पट्टेदार / किरायेदार किसी भी आक्रामक, खतरनाक, विस्फोटक या अत्यधिक भड़काऊ लेखों को संग्रहीत नहीं करेगा / करेगा और किसी भी गैरकानूनी गतिविधियों के लिए उसका उपयोग नहीं करेगा।
14. कि पट्टेदार को एक महीने का अग्रिम किराया चुकाना होगा, वही मासिक किराए में समायोजित किया जाएगा।
15. कि दोनों पक्षों ने इस समझौते की सभी सामग्रियों को पढ़ा और समझा है और बिना किसी बल या दबाव के किसी भी पक्ष से हस्ताक्षर किए हैं।

निम्नलिखित में, साक्षी / मालिक और किरायेदार / पट्टिका ने अपने हाथों को ______ (स्थान) पर इस _____________ (किराया समझौते की तिथि) पर सदस्यता दी है, जो निम्नलिखित गवाहों के प्रस्तुतिकरण में उल्लेखित है।

विटनेस: -

___________ (मकान मालिक का नाम) _________________ (प्रस्तावित कंपनी का नाम)

Types of Rent Agreement in India

There are 2 types of rental agreements in India. The first one is a rent agreement that lasts for a minimum of 12 months. This comes under Rent Control Laws put up by the State government. The second one is a rent and license agreement of up to 11 months which doesn't fall under the Rent Control Laws.

Registered Rent Agreement VS Notarised Rent Agreement

Things to Keep in Mind While Making a Rental Contract

When dealing with rental agreements in India, there are several key considerations to keep in mind to ensure a smooth and legally sound renting experience. Here are eight important points to remember:

1. Clarity is Key: Ensure that the rental agreement is clear and concise, leaving no room for ambiguity. Both parties should fully understand their rights, responsibilities, and obligations.
2. Thorough Documentation: Gather all necessary documents, including proof of ownership, identification, and address proofs, to facilitate the registration process and validate the agreement's authenticity.
3. Legal Compliance: Adhere to the legal requirements of the Registration Act, especially for agreements lasting more than 12 months. Properly registered agreements offer legal protection and prevent disputes.
4. Understand Rent Calculation: Have a clear understanding of how the rent is calculated, including any potential increases due to repairs or renovations. Transparency in rent calculations can prevent conflicts later on.
5. Deposit Handling: Clearly outline the terms related to the security deposit. Understand the conditions under which the deposit will be refunded or used for repairs and damages.
6. Stay Updated: Keep yourself informed about local rent control laws and regulations. Being aware of your rights and limitations can help you make informed decisions throughout the renting journey.

Rent Agreement: Important Terms and Conditions for Tenant and Landlord

Renting a house in India comes with a set of rules that both landlords and tenants need to abide by. The rental agreement is a legally binding document that outlines the terms and conditions of the tenancy. Here are some essential terms and conditions that both parties should be aware of:

• Parties to the Agreement: Identify the landlord (property owner) and the tenant (person renting the property) by their full names and addresses.
• Property Details: Provide a detailed description of the rented property, including its address, type, size, and any unique features.
• Term of the Lease: Clearly state the start date and the duration of the lease (usually expressed in months or years). Also, mention the process for lease renewal or termination.
• Rent Amount and Payment Terms: Specify the monthly rent amount, due date, and acceptable methods of payment. Mention any late payment charges and the consequences of repeated non-payment.
• Security Deposit: Explain the purpose of the security deposit, the amount, and the conditions under which it will be refunded or used for repairs/damages.
• Utilities and Maintenance: Clarify which utilities (water, electricity, gas, etc.) are included in the rent and which are to be paid separately. Define responsibilities for property maintenance and repairs.
• Use of the Property: State whether the property will be used for residential or commercial purposes. Outline any restrictions on alterations, subletting, or unauthorised occupants.
• Tenant Responsibilities: Detail tenant obligations such as keeping the property clean, adhering to society rules, and not causing disturbances to neighbours.
• Landlord Responsibilities: Enumerate the landlord's responsibilities, including providing habitable living conditions, addressing repairs, and respecting the tenant's privacy.
• Termination and Notice Period: Specify the notice period required for both the landlord and tenant to terminate the agreement. Also, outline the conditions under which the landlord can terminate the lease.
• Entry and Inspections: Explain the circumstances under which the landlord can enter the property (e.g., for repairs) and provide notice requirements.
• Renewal and Changes: Describe the process for lease renewal, potential rent adjustments, and any changes to the terms of the agreement.
• Legal Actions and Dispute Resolution: Outline the procedures for resolving disputes, including mediation or legal actions, and specify the jurisdiction where disputes will be addressed.
• Force Majeure Clause: Consider including a clause that addresses unforeseen events (such as natural disasters) that may affect the rental arrangement.
• Governing Law: Mention the applicable laws and regulations that govern the rental agreement, typically based on the state or union territory.
• Signatures and Witnesses: Include spaces for the signatures of both parties and any witnesses. Signatures validate the agreement's authenticity.
• Pet Policy: The rental agreement may specify whether or not pets are allowed on the property, and if so, what type of pets and how many.
• Parking policy: The rental agreement may specify whether or not parking is available on the property, and if so, how much it costs.
• Move-in and move-out procedures: The rental agreement may specify the procedures for moving in and moving out of the property, such as when the tenant must give notice and when the landlord must return the security deposit.

NoBroker Rental Agreement Services: If you are a landlord or a tenant, NoBroker offers a hassle-free way to create a rental agreement. Our rental agreement format is legally binding and includes all the essential terms and conditions that you need. You can also customise the agreement to suit your specific requirements.

How Can NoBroker Help?

The process of renting a place isn’t an easy one, but with a few legal steps and a little patience, two witnesses and a good landlord, and us! NoBroker will help you get a rental agreement from the comfort of your home! Just visit the link below, and you can get your rental agreement home delivered! You can even drop us a comment below with any questions and we’ll be happy to help.

The process of renting a place isn’t an easy one, but with a few legal steps and a little patience, two witnesses and a good landlord, and us! NoBroker will help you get a rental agreement from the comfort of your home! Our user-friendly platform simplifies the process, addressing potential hurdles with ease.

Frequently Asked Questions

Ans.To create an online rent agreement in Mumbai, visit a government-approved portal, select the required form, fill in the property and party details, pay the necessary fees, and submit for e-registration.

Ans. The home rent agreement format typically includes details of the landlord and tenant, property description, rent amount, security deposit, term of the lease, and terms of termination, among other clauses, all set in a legally binding document.

Ans. The best rental agreement format for tax exemption should include clear details of rent payments, duration, and PAN of the landlord if rent exceeds ₹1,00,000 annually, to ensure eligibility for HRA tax exemption.

Ans. A sample rent agreement with parents in India is a formal document that outlines the terms and conditions under which an individual agrees to rent property from their parents, ensuring clarity and legal validity for both parties.

Ans. A rental agreement format for income tax proof is crucial as it serves as a legitimate document to claim House Rent Allowance (HRA) benefits, reducing your taxable income.