Do you know why most Rent Agreements are typically for 11 months??
A Thread🧵
A Thread🧵
As per the requirements of Section 17 of the Registration Act 1908, registration of a Rent Agreement for a property, on lease for a year or more is compulsory
Now, why do Both the Tenant and the Landlords prefer not to get it registered ??
2/n
Now, why do Both the Tenant and the Landlords prefer not to get it registered ??
2/n
- To skip the tedious process of registration.
- In case of an agreement being registered, payment of stamp duty and registration fee is there which increases the cost of agreement
- The quantum of stamp duty depends on the rent , period of stay
3/n
- In case of an agreement being registered, payment of stamp duty and registration fee is there which increases the cost of agreement
- The quantum of stamp duty depends on the rent , period of stay
3/n
- Longer the tenure of tenancy, higher is the stamp duty
- Therefore, to circumvent the payment of such charges, the landlord and the tenant may mutually agree to not get the agreement registered.
4/n
- Therefore, to circumvent the payment of such charges, the landlord and the tenant may mutually agree to not get the agreement registered.
4/n
In order to avoid legal trouble, landlords prefer the 11-month tenancy
But How?
- In an agreement where tenure is for a longer duration, often terms such as rent, tenant and tenure are used which invokes the possibility of tenancy by the other party (tenant)
5/n
But How?
- In an agreement where tenure is for a longer duration, often terms such as rent, tenant and tenure are used which invokes the possibility of tenancy by the other party (tenant)
5/n
- These Tenancy Rights under rent control laws are tenant-friendly
- This can eventually lead to protracted court battle in case of a dispute
- As laws are favoring tenants, it becomes extremely difficult to get one’s property vacated which is tenanted or leased out
6/n
- This can eventually lead to protracted court battle in case of a dispute
- As laws are favoring tenants, it becomes extremely difficult to get one’s property vacated which is tenanted or leased out
6/n
- Even though the terms of the lease agreement state otherwise, it may take years in the legal battle to get justice to the landlord owing to the procedural delays/lapses and till such time the tenant continues to enjoy the property
I have seen many such cases personally
7/n
I have seen many such cases personally
7/n
- To prevent such situations, generally the Landlord of the property prefers to enter into an agreement for a term not exceeding 11 months especially for the residential property.
8/n
8/n
So, if the agreement is not registered, is it Valid??
Although, the requirement of registration arises only if term is 1 year or more, notarizing a rent agreement helps in establishing the authenticity of agreement & is valid evidence in court of law
END OF THREAD
Although, the requirement of registration arises only if term is 1 year or more, notarizing a rent agreement helps in establishing the authenticity of agreement & is valid evidence in court of law
END OF THREAD
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