Commonly known as Rent Agreement, Lease and License Agreement is a legal document that binds the owner and tenant. This agreement is meant to protect both parties in terms of their rights in case a dispute takes place. The agreement includes various basic details such as monthly rent, tenure of the stay, notice period, etc.
When it comes to the National Capital Territory, it is compulsory to get the rent agreement registered in case the rental period is over 11 months. If you are someone who is looking to rent a property in Delhi, this blog is for you. In this blog, we will discuss the Stamp Duty on rent agreement in India, the registration process, things you must keep in mind while registering the rent agreement, and more.
Let’s get started.
Cost of registering rent agreement in Delhi
There is a fixed amount of rent agreement charges in Delhi. In this section, let’s quickly look at the stamp duty & rental period charges applied in Delhi:
| Rental Period | Stamp Duty (It is the % of the Value Considered) | Registration Charges |
|---|---|---|
| Less than 5 years | 2.0% | Rs. 1100 |
| 5 to 10 years | 5.0% | Rs. 1100 |
| 10 to 20 years | 5.0% of double the value considered | Rs. 1100 |
You must note that the value considered is the average annual rent payable, as stated in the document.
Steps for registering a rent agreement
Now that you know the stamp duty on rent agreement in Delhi, let’s quickly discuss the steps you need to follow to go through with the rent agreement process:
Step-1
As a first step of the process, you should come up with a rental agreement draft that includes all the necessary details:
The owner’s name as well as the permanent residential address.
The tenant’s name as well as the permanent residential address.
Complete address of the property that is being rented.
Rental agreement’s tenure.
Important figures related to finance including maintenance, monthly rent, and the amount to be paid for the security deposit.
Lock-in period (if necessary).
Notice period required in case of vacating the property.
Any type of other terms or conditions that the owner or tenant may want to add.
Step-2
Once the rent agreement draft has been verified by the tenant and the owner, you must print the draft on stamp paper. Talking about Delhi, traditional stamp paper doesn’t exist. You need to make an effort to get an e-stamp of the total Stamp Duty value calculated according to the table provided above. Then, you must get that draft agreement printed on a piece of paper.
The Stock Holding Corporation of India Limited popularly known as SHCIL regulates e-stamps in India and you can procure an e-stamp from a vendor registered with SHCIL. Other than that, you can also order it online, or get it from a SCHIL branch near you, or designated banks.
Moreover, you can pay online for the Stamp Duty of up to Rs. 500 and go through with the e-Stamping process without getting a physical stamp paper.
Step-3
As a last step of the process, you must go to the Sub-registrar’s Office or SRO. The SRO you will have to visit will depend on the property’s jurisdiction for getting the rent agreement registered. There, you will have to pay the registration charges. Moreover, the tenant, owner, and witnesses will have to sign the registration document in the presence of the Sub-registrar. SHCIL’s website will help you locate your property’s SRO.
Documents required
The following are the documents required for a rent agreement:
Proof of ownership of the property including registration document, sale deed of the property, property’s tax receipt, and more.
Passport-size photographs of the tenant and the property owner.
Address proof of the property that is being registered.
Authorization letter provided by the company if the registration is being held under the name of a company.
Address proof of the tenant. (Original passport is required in case of foreign nationals).
The tenant’s photo ID proof. (Original passport is required in case of foreign nationals).
Photo ID proof and address proof of the property owner.
Registration amount’s demand draft.
Two witnesses alongside their photo ID proofs.
Consequences of not paying the stamp duty
Oftentimes, people try to avoid paying the stamp duty on rent agreement in Delhi and use normal stamp papers. In case there is no litigation, doing so will do you no harm. However, in case any disputes arise and the agreement goes to the court, the court can take temporary possession of the agreement due to the deficit of Stamp Duty paid.
The court can also fine you for an amount up to 10 times the original Stamp Duty. Thus, it is advised to pay the Stamp Duty amount during the registration process.
Points to keep in mind when making a rent agreement
The rent agreement document holds importance for both the landlord and the tenant. Thus, the following are a few vital points you must keep in mind while drafting a rent agreement:
The landlord has the power to include a clause in the rent agreement that states an increment in the rent up to 10% every three years while also being in conformation to the Delhi Rent Control Act.
The tenant has the right to receive the rent receipt for the rent payment.
The notice period needs to be mentioned by the landlord as well as the tenant.
Every detail of the rent agreement should be mentioned properly.
The rent agreement should include all the details related to fixtures and fittings.
You must ensure that your rent agreement in Delhi includes important factors such as provisions with respect to pets, provision for parking, permission to make structural changes, etc.
We hope this blog helped you understand rent agreement registration charges and all the other necessary details regarding rent agreement registration in Delhi.
Looking to rent a place in Delhi, we’ve got you covered. Reach out to our team of skilled professionals to find the best properties to rent and go through a smooth registration process. Visit our website right away!
