Rent Agreement or Leave and License Agreement is a document that mentions the description of the property, the amount of deposit and monthly/annual rent payable, and other terms and conditions associated with the property rental contract.
Like many states in India, it is mandatory in Uttar Pradesh to register a leave and license agreement for a rental period exceeding 11 months. Registering the rent agreement is optional in cases where the rental period is less than or equal to 11 months. Keep reading to know how to register a rent agreement in UP, stamp duty, registration charges, and documents required.
The process to make Rent Agreement in Noida, UP
Prepare the rent agreement and print it on a stamp paper of recommended value
Sign the tenant and the landlord at the designated places
Obtain the signatures of two witnesses
Register the deed at the local sub-registrar’s office
Stamp duty and its importance
Stamp duty is a tax paid in return for legalizing a legal document. In UP, the stamp duty charge for a rent agreement is 4% of the annual rent + deposit, if the lease period is less than one year.
If the required stamp duty is not paid, in case a dispute arises, the court may sentence you to pay ten times the original stamp duty as a penalty.
Registration and its importance
Registration is a method where the contents of a document are registered with an authority. This gives the following benefits-
Prevents fraud and/or forgery from occurring
Registration is proof that the document was actually prepared by the parties mentioned in the deed
Provides transparency and clarity
Disputes in the name of property, liabilities, and debts are known
In UP, there is a registration fee of 2% of the rent + deposit. If a document is not registered, it will never be treated as primary evidence. Instead, it will be accepted as collateral evidence.
Documents to be submitted by the landlord for registration
Original copy of proof of ownership or title of the property
Two (2) passport-size photographs of the landlord
An aadhaar card or its receipt is mandatory while applying
Government-issued ID proof – Driving License, Voter ID, Passport, etc.
Rent agreement printed on stamp paper of recommended value
Documents to be submitted by the tenant for registration
Two (2) passport-size photographs of the tenant
Aadhaar card or the receipt received while applying for it if the person is an Indian. If the person is not an Indian, his/her original passport should be produced.
If the tenant is a registered company, a board resolution/authorization letter of the company validating the authority of the person to register the lease, with the seal of the company
If a person is representing another person for registration, a power of attorney must be submitted.
Stamp Paper Format in UP
E-Stamping was introduced in UP in early 2013, initially, it was available only to those who paid a stamp duty of Rs 10,000 or more. Presently SHCIL in association with select banks is regulating the issue of the e-stamp paper in major cities of UP.
Notarization of rental agreements
Notarization is not registration and should not be confused with one another. Notarization is simply a method for fraud-deterrent and to prove that the document was indeed signed by the parties discussed in the contract. The un-notarized agreement will only be considered as collateral evidence in the courts if a dispute arises.
Security deposit
Also called a caution deposit, it is also a lump sum amount collected from the tenant before moving in. This amount is essentially a backup for damages caused by the tenant, for which he refuses to pay or does not pay the rent. If there is no issue, the security deposit is fully refunded to the tenant at the time of handing over the keys.
Types of Rental Agreements Commonly Used
11-Month Tenancy Deed– This is the most commonly used rental agreement mainly used for residential purposes. The duration of the contract is 11 months as the name suggests and can be renewed at the end of the period. Such deeds are rarely registered or notarized, although it is a wise choice.
Commercial Lease– Signed almost exclusively for businesses conducted for profit, commercial leases often include large sums of money and clauses specific to individual businesses. Therefore, they rarely follow a standard format. They are usually registered and notarized to avoid future hassles.
Long Term Lease– is signed for both residential and commercial purposes. These involve advance payment of large sums and the duration of such contracts is always more than one year. The amount paid in advance is often paid back to the tenant at the end of the term without any interest and after deducting compensation for damages/maintenance. In such contracts, the utility bills are to be paid by the tenant on a monthly basis. Notarization and registration are rarely overlooked in the case of such leases.
Important Clauses to Include in Your Rental Agreement
It is often seen that most people create careless rental agreements with lots of loopholes as they are not aware of what may come next. Most people are unaware that a badly drafted agreement can make things ugly if a dispute arises in the future.
Even if both parties know each other on a friendly basis, it is strongly recommended that a rent deed is prepared to avoid hassles. While only major cities like Noida, Kanpur, Lucknow, Ghaziabad, etc. really insist on detailed rental agreements, smaller cities like Agra or Varanasi are quite relaxed. Here is a list of clauses that should never be removed from your rental agreement:
Monthly rent, security deposit, and maintenance charges – each should be discussed in advance and clearly spelled out in the contract.
Eating Habits– Landlords should be biased toward vegetarian tenants, make it clear before signing the contract, and hence this clause should never be omitted.
Animals– Permission to keep animals within the premises should be given through a contract. If there is no such clause, then the tenant is free to do as he pleases in the marmite
Overstay– The consequences of overstay, a situation where the tenant continues to occupy the premises even after the contract has expired, should be discussed in the deed.
Penalty for Late Payment– When the tenant does not pay the rent regularly, the landlord is free to impose a penalty on the tenant. Such penalties should be spelled out in the contract.
Lock-in Period– This refers to the minimum period for which the contract cannot be terminated. Include a lock-in period clause to prevent either party from backing out.
Make rent agreement online
To create a rental agreement with LegalDesk, fill in your details in our pre-drafted, customizable, lawyer-verified rental agreement, which can be accessed by clicking the button below. Fill in the details of all the parties involved and the description of the property intended for lease. Review and print the prepared soft copy on stamp paper or you can allow us to print the document on stamp paper and deliver it to you.
eStartIndia will help you to draft a Rent Agreement from the comfort of your home.
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