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Online Rent Agreement-An Overview
A Rent Agreement is a legal binding bond that encompasses all the terms and conditions to safeguard property and to evade legal tussles. This property-related accords works in the favour of both the involved parties (tenant and landlord) and also acts as a piece of evidence in the court of law. Over the course of time, there has been an upsurge in the tenant-landlord disputes that arise due to numerous reasons. To elude unwanted legal disputes, it is the need of the hour to enter into a rental or leasing agreement.
A Rental agreement is one that can protect you from the discrepancies, uncertainties and quarrels related to the rented or leased property. Well, for the road trip to the land of tranquility, equality, and transparency and to circumvent legal disputes, get into an authentic rental or lease agreement. This agreement comprises an array of vital details including property details, payable rent, advance deposit in addition to the property associated terms and conditions.
While signing a rent agreement online you need to be cautious about certain things such as rent agreement online format, rent agreement registration process, house rental agreement form, lease agreement form, notice period, and much more. At a glance, these agreements might seem perplexing, so here is a run-down of rent and lease agreement format, difference table, importance, rent form for house, etc.
Know the Difference between Rent & Lease Agreement
A rental agreement is a legal binding document that acts as an authentic bond between tenant and landowner, defining tenancy terms. You can get your rent agreement made in your favour as you are the one that decides what goes into the contractual rental agreement.
Signing a rental agreement bond is a good sign if you want to ensure your tenant is credible and authentic enough. A month-to-month tenancy contract encompasses specific provisions so that the contract can safeguard the interest of the tenant and landlord.
Rent agreements are basically short-term that have month-to-month tenancies while on the other hand, leasing agreements are for longer rental periods such as a year or six months.
Well, when a landlord wants to avoid legal disputes for a long time and also fluctuations in income, they prefer to go for a leasing agreement over a rent agreement online any day.
If you are a first-time landlord, then let the attorney prepare the rental agreement for you, no matter whether it is a one-page document.
Differentiation Table between Rent Agreements vs. Lease Agreement
|Parameters||Rent Agreement||Lease Agreement|
|Meaning||Rent Agreement is a law-binding contract with the tenant for a shorter period to use a property||A lease Agreement is a legally binding contract with the lessee for an extended period of time to use a property|
|Duration of tenancy||A rent agreement is usually signed for a shorter duration of time||A leasing agreement is signed for a longer period of time|
|Parties Involved||Tenant and Landlord||Lessee and Lessor|
|Accounting Standards||No accounting standards are followed in the rental agreement||Accounting Standard 19 (AS-19) is followed in theleasing agreement|
|Offer at the expiry of the term||No offer is granted to the tenant by the landlord at the expiry of the term||At the expiry of the term, a lessee is granted the offer to purchase the property|
|Payment||Rent is paid either quarterly or on a month-to-month basis for the property||Lease is usually paid in monthly installments|
|Amendments in the contract||The landlord holds the right to amend or modify the agreement whenever he or she chooses to||Once the lease agreement is signed, no amendments can be made to the contract for a certain period|
|Maintenance of property or asset||Tenant is responsible for the maintenance of property or asset||Lessee is responsible for the maintenance of property or asset|
What are the Types of Rent Agreements in India?
When you rent a property no matter whether it is residential or commercial, there are three types of arrangements that are followed to curb the disputes between the landlord and tenant. To be precise, rent agreement, lease agreement and leave & license agreement.
Now, if you are wondering what a tenant agreement form is? In that case, allow us to tell you, it is a legal document that defines the terms and conditions of a lease between the tenant and the landlord. As we mentioned earlier, when it solely comes to leasing or renting a property or space, different types of agreements are imposed. However, on the one hand, the leave and license agreement is governed by the Indian Easement Act, whereas the rental agreement is administered by the Rent Control Act. Without further ado, let’s dig deep and understand the true meaning of different types of Rent Agreements in India. Have a Glance!
- Rent Agreement
- Leave & License Agreement
- Lease Agreement
A rental agreement is a legally binding agreement between the landlord (property owner) and the tenant (who avails of impermanent possession of a property). Rent agreement encompasses in-depth details like property owner’s name and the tenant name as well, amount of rent that tenant has to pay, finer points of the property, late fee charges, security deposit, facilities and amenities that the tenant is permitted to use such as parking area, insurance of property, maintenance and repair, etc.
When it comes to the duration of the contract, allow us to tell you rent agreements are for 11 months. However, registration of a rental agreement totally depends on you as it is optional. This legally binding official tenant agreement form enables a trouble-free settlement between two parties.
In case, if the duration of the agreement is more than 11 months, then it is obligatory to get the registered rental agreement. If you fail to do so then it is not acceptable in the court of law and will not be deemed as evidence.
Laws that govern the rental agreement/tenant agreement are the Specific Relief Act, Transfer of Property Act, Registration Act, Evidence Act and many more.
Law that governs the leave & license agreement is the Indian Easement Act 1882. It is a document that gives the rights to tenants/licensees to use the property in a certain manner or for a particular intent while the possession of the property remains with the landowner.
In a nutshell, the leave and license agreement permit one party to grant access to the other party to use their immovable assets or property. This type of agreement is substantially used in the rental housing segment.
This agreement is different from the lease because leave and license only permit tenants to occupy the property, whereas the lease grants an exclusive possession. A leave and license agreement gives an upper hand to the owner of the property, unlike a lease agreement that creates tenants interest in the property.A leasing agreement is transferable from one entity to another while leave and license are not. Leave and license never creates inheritable rights while leases do. Last but not the least, a lease is not revocable but is transferable whereas a license can get cancelled but is not transferable.
POINT TO BE NOTEDTo avoid legal disputes at a later stage, these landlord and tenant agreements must cater to the expectations, preferences and responsibilities of both tenant and landlords in a clear and concise manner.
Comparatively, a leasing agreement is for a longer period than a rent agreement. It is a legally binding contract between the tenant and the landlord, where the tenant for more than 12 months’ time frame possesses the right to use the property. To your surprise, a leasing agreement can also be of 98 years. Bottom Line, a lease is transferable, gives inheritable rights and creates tenant’s interest in the property.
In case of disputes, if you want to present the leasing agreement in a court of law, then it should be stamped and registered.
The only significant disadvantage of the leasing agreement is that the landlord loses the incremental income in the case of a surge in the rate of the market value of property in the midst of the rental lease period.
If the landlord is located in the other part of the country and is finding any sort of difficulty in executing the rental lease deed, then in such a scenario, he or she can make someone their Power of Attorney who is residing in proximity to the property and can receive rent on their behalf.
Leave & License Agreement VS. Lease Agreement: Know the basic difference between them
|Parameters||Leave & License Agreement||Lease Agreement|
|Inheritance of Property||NO||YES|
|Power of Attorney||YES||YES|
|Compulsory mention of the rent amount||NO||YES|
Top 9 Terms to Include in Your Rental Agreement
Terms of your rental agreement are imperative in mandate to protect your right as an owner. If you are a property owner and are planning to rent a property anytime soon, then it would be good for you to have a written rental agreement. However, your rent agreement encompasses some basic rental terms.
The spectrum of provisions are incorporated, but a rental agreement should comprise of 9 following terms:
- Terms and Conditions of the Tenancy: Landowners can mention the terms and conditions in the agreement that they don’t expect from the tenant such as no smoking, no listening to loud music after a specific hour. It should clearly state the terms of the agreement if the lessee/tenant fails to adhere to the tenancy rules and regulations. However, the tenant will be liable to pay the legal fee in case they commit a breach of the agreement.
- Prohibition of Pets in Rent Form for House: This apartment lease agreement states whether the pets are permitted or not in the rented house. If it is allowed, then how many and if any charges apply or not for keeping the animal in the rented premises. In case, landowners don’t like pets in their house, then they can have a no-pet policy.
- Security and Rent Deposit: In the rental agreement, mention how much rent is charged per month and when the tenant is required to pay the rent. Also, signify the mode of payment whether you accept credit cards over cash. In the agreement, incorporate the late fees, but ensure charges don’t go over the board. Furthermore, list the security deposit amount.
- Name of the Tenant: In your apartment lease agreement incorporate the name of the tenants living on your premises and their contact information. Also, incorporate your contact information, address of the property, name, and details of the property.
- Deterioration of Property: In the rental agreement, mention the damages that the tenant is liable to such as wear and tear of property or furnished items. You can also state that the tenant is responsible for paying legal fees if they are taken to the court for deteriorating the property.
- Sign the Legal Agreement: Both the lessee and lessor should sign the legal tenancy agreement.
- End of Duration of Tenancy: In the agreement state the duration of tenancy such as three months or six months. State the notice period that the tenant is to serve if the landowners want to end the contract in between.
- What’s incorporated in the rental agreement: In the rental agreement, mention the utilities provided such as fans, cable, electric heater, appliances, bed, etc. Also, don’t forget to mention the tenant’s responsibility to keep the items safe and secure. Clearly mention what is included and what is not.
- Occupant’s Name and Contact Number: If you don’t want multiple people to stay on the premises, then list the name of the occupants and their contact numbers. Inform the tenant that this agreement is between you and the tenant only and no other occupant is allowed to participate.
Why are Rent Agreements usually of 11 Months?
If you are a property owner and have rented accommodation in the past or you are a tenant who has been part of this arrangement, we are assuming you are conversant to what is a rent agreement in general. But have you ever thought about why it is eleven months or why it is imperative to have a rent agreement? Speculate no more! Well, we are here to address the elephant in the room.
According to the Registration Act 1908, property registration for a year or on a rental lease is mandatory. To bypass the painstaking and daunting process of registration, the rental agreement is framed for an eleven months period. If both the parties wish to elongate beyond the 11-months rent agreement, then it becomes obligatory to register under the Act. If the agreement is already registered, then paying the registration fee and stamp duty becomes a pressing priority.
One of the substantial reasons for registering your rent agreement online - it offers flexibility to the landlord as the payment of rent can be agreed upon fluctuating rental rate and works as per renewal. Moreover, the rental agreement doesn’t need to be of 11 months as it can get extended to three to five years. Another reason is to evade stamp duty charges and other additional charges because if the project is a registered rental agreement, registration and stamp duty fees need to be paid.
For Instance, in the capital city of Delhi, for a rental lease agreement of up to 5 years, a stamp duty cost of 2% of the annual rent is charged and the security deposit of Rs 100.
Before directly hopping on the process of registration of the rent agreement online, the main question of discussion is why one should register a rent agreement
Why Is It Important to Register a Rent Agreement Online?
A registered rental agreement is imperative for a transparent and strife-free landlord-tenant relationship. This agreement infuses transparency between the landlord and tenant and safeguards their interest. Moreover, this agreement clearly defines the ownership and asks the people to never go for an oral agreement as it is not considered in the court of law. If any physical asset is involved such as a residential property, a legal document is required to protect both landlord and tenant in circumstances of any discrepancies or disputes.
Easy-Breezy Guide to Register Your Rent Agreement
If you want to register your rent agreement offline, then go to the sub-registrar’s office. It is vital to keep a tab of the time when the agreement was created and came into force. Always remember, the rental agreement registration is made before the expiration of the deed. Otherwise, you are required to create a new deed.
To register the tenancy contract, both the landlord, tenant and two witnesses should be present for attestation of the rental agreement document. In case, both parties are not present in the court, they are obligated to sign the Power of Attorney and should grant the chosen attorney the rights of closure.
If you want to opt for the online registration process, then let us tell you it is available in some states only. But with the progression of the digital era, there will be a paradigm shift in the rent agreement. For Instance, to register your rent agreement in Maharashtra go for the following steps:
Step 1:First and foremost, visit the authorized official website efilingigr.maharashtra.gov.in.
Step 2: Next, select the rental agreement document and fill in the district name and then set the password.
Step 3: After that, select the next option and enter the property details. Once you are done with it click on the save option.
Step 4: Subsequently, fill in the tenant and owner details and after that use the biometric system to upload your thumb impression.
Step 5: After that, input the witnesses’ details and also other requisite information.
Step 6: At last, scrutinize the rental agreement documents and then submit them for assessment after paying the required stamp duty and registration charges.
Documents Checklist for the Registration of Rent Agreement
- Authentic proof of title of the property or ownership
- Asset or property documents like tax receipt and Index II
- Two passport size photographs of the tenant, landlord and witnesses
- Identity proof of the landlord, tenant, and witnesses such as Ration card, Aadhaar card, Driving license, Passbook, etc.
What are the Registration Charges of the Rental Agreement?
Registration and stamp duty charges vary from state to state. For Example, for a property rented for a duration of 5 years is 2%. Likewise, a stamp duty of 3% is charged for the same duration.
What are the Legal Rights of a Landlord in India?
Rent Control Act protects the right of a landlord and fortifies the tenant and landlord relationship. Let’s have a look at the legal rights of a landlord in brief. Have a glance!
- Freedom to choose who will live on their property.
- Possess rights to go through potential tenants based on the parameters of salary, employment, standard of living and by confirming the tenant’s background from former landlords.
- Right to know about the repairs and any renovation done in the premises by the tenant.
- Right to collect an advance security deposit to thwart the chances of losses he/she may suffer when the tenant fails to make the rental payment. Landlords as per the Draft Model Tenancy Act 2015 possess the right to cancel the agreement on the grounds of misbehaviour, misuse of assets and breach of the rental agreement.
- A landlord holds the full power to subtract money from the security deposit at the end of the tenancy.
- A landlord can ask for the rental payment on the first of every month.
What is the Stamp Duty on Rent Agreement?
When the landlord or tenant registers an online rent agreement, they are required to pay the stamp duty. It is charged by the government on property transactions, and it is payable under the Indian Stamp Act, 1899. Though stamp duty differs from state to state and mainly depends on the time span of the rent agreement.
|State||Duration of Rent Agreement||Stamp Duty Amount|
|Gurgaon||5 to 10 years, up to 5 years||3%, 1.5%|
|Tamil Nadu||11 months||Deposit amount + 1% of rent|
|UP||Deposit + 4% of annual rent|
How are Stamp Duty Charges Determined?
To evaluate the value of the stamp paper, location and the period of the agreement is the main factor that is considered. However, stamp duty on long-term and short-term leases varies as per state.
What is E-stamping in the Rental Agreement?
E-stamping of a rent agreement is accessible in specific states only. In this, you are not required to visit the official department and purchase stamp paper for the rent agreement. Just simply log in to the Stock Holding Corporation of India Ltd (SHCIL) website and check whether your states provide the service of e-stamping or not.
What are the Existing Rent Agreement Laws in India?
It is no secret, leasing a property in India whether residential or commercial is subject to regulations and laws. To be precise, the protection of rights of tenants and landlords are regulated by the Rent Control Act.
Rent Control Act
This act was brought into action in 1948 and from that year it started safeguarding the rights of both parties. It is mandatory to have a written agreement between the two parties, reckoning rules and terms of tenancy in mandate to avoid legal predicaments. Without a proper written agreement, the rights of tenants and landlords cannot be protected by the law. The agreement must be duly signed by both parties, and it should also be stamped and registered. Well, over a period of time it has expanded its reach and now it is present in each state. This 1948 Act is rigorous and pro-tenant, which is why it faces problems in flourishing and gaining prominence in some states. However, there are properties that are still receiving the same rental payment, paying no attention to the surge in property valuations and inflation. To rectify this discouraging aspect, in 1992 the Central government introduced amendments in the Act to assure the property is not undervalued. However, sitting tenants were against this amendment and opposed it relentlessly, which is why it failed to persist.
Legal Rights of a Tenant
The Rent Control Act is initiated to safeguard the interest and rights of not only the landlord and their possession but also of a tenant. Earlier, we have mentioned the few vital rights that a landlord enjoys, however now is the turn of the tenant. Have a look at the rights that are explicitly given to the lessee/tenant by the law.
- Can Speak Against Unfair Eviction of Tenant: Under the Rent Control Act, a landlord without any reason can evict the tenant. If the tenant has been prey to unfair eviction, then he/she can reach to court to acquire a court order to stay in the same property. Also, there is another rule in some states that if the tenant is fine with the alterations in the rent, then they cannot be evicted.
- Fair Demand of Rent: If the landlord is charging an exorbitant rent amount, more than the value of the property, in that case, the tenant can reach out to the court to seek proper redressal. For your information, the rent should be charged between 8% and 10% of the valuation of the property, comprising all the expenses incurred on fixtures and construction.
- Demand Essential Services: Demanding essential services is the basic tenant-right such as they can without any hesitation ask for water supply, electricity, etc. Landlords don’t possess any rights to take away essential services of tenants.
What is the Notice Period to End a Tenancy?
Latest COVID-19 Update: Rent Agreement
On 16 July 2021, legislation introduced an amendment amid a pandemic. To protect the interest of the financially impacted tenants by COVID-19.The burning question that is often asked is can landlords evict the tenant if they fail to make the rent payment in midst of a COVID-19 outbreak. Under the rules of the Model Tenancy Act, the landlord can evict the tenant if the rent is not paid for more than 2 months in a row.
Usually, the number of days given to end a tenancy mainly depends on how long the tenant has stayed in that rented property.
A rent or lease agreement can give a notice of an elongated span of time, but there will be cases where both the parties may agree with a shorter duration of the notice period
If the tenant has stayed less than six months in the dwelling, then 28 days is the minimum requirement for a tenancy to end.
All the landlords and tenants who fail to abide by the notice of termination will face the repercussions of invalidation of the notice of termination.
- Notice Period Served to End a Tenancy for a Landlord
- Notice Period Served to End a Tenancy for a Tenant
|Tenancy Period||For Landlord|
|Less than six months||28 days|
|Less than one year, but not less than six months||90 days|
|Less than three years, but not less than one year||120 days|
|Less than seven years, but not less than three years||180 days|
|Less than eight years, but not less than seven years||196 days|
|Not less than eight years||224 days|
|Tenancy Period||For Tenants|
|Less than six months||28 days|
|Less than one year, but not less than six months||35 days|
|Less than two years, but not less than one year||42days|
|Less than four years, but not less than two years||56 days|
|Less than eight years, but not less than four years||84 days|
|More than eight years||112 days|
A tenancy can also end if both the parties together agree to dismiss a rent agreement.
Notarized Rent Agreement Online
An agreement that is printed on stamp paper and is signed by a public notary is a notarized rent agreement online form. Public notaries are well-known as advocates and lawyers. If it is a notarized agreement, advocates, and lawyers verify the rental agreement documents and identities of the tenant and landlord and ratify the document by signing. For the successful completion of the process, the tenant and landlord are required to be present before the notary. Feed-in mind, execution of the notarized rent agreement online is straightforward and effortless since the implementation process only requires visiting the lawyer’s office and also does not demand to pay the registration fees and stamp duty. Tenants and landlords are only required to pay the notary fee that ranges from ₹200 to &500. But this notarized document does not work in the court of law since it only verifies the paperwork and agreement and does not authenticate the rental transaction. As such, there is no obligation to notarize a rent agreement, but it comes in handy when asked for utility bills such as telephone, mobile, etc.
Simple Rent Agreement Format
A rent agreement is duly signed by both parties, ensuring they will adhere to the conditions set by the law. A rental lease agreement is a law-binding agreement with a legal effect that is used as a piece of evidence in a court of law. It is always better to have a written rental agreement to maintain the cordial relationship between the two parties. However, in the simple rent agreement format, you can alter the terms and conditions as per your interest and understanding. Unless the rental agreement is not registered it is not legally binding. However, as per your convenience, you can download the rent agreement Pdf or rent agreement word format within a few clicks. If you are looking forward to “how does a rental agreement look like”? Refer to the below-depicted house rental agreement sample format.
Here is the ideal lease agreement format:
House Rental Agreement Form/Rent Form for House
Standard Lease Agreement
To rent the residential property for a specific period usually one year, count on the standard lease agreement. This category of rental lease agreement is inclusive of essential clauses. A standard lease agreement can be used to rent a home, an apartment, any studio/condo, to rent a duplex or townhouse, and even a mobile home. In general, the lease agreement form format and house rental agreement sample may vary from one state to another.
Monthly House Rental Agreement Form
If you don't wanna go for long-term commitments, rely on a month-to-month house rental agreement sample format. It is the best option when you want to rent a property for a small period, let's say for a few months. With monthly house rental agreements or room rental agreements, you can protect your rights at your convenience. Monthly house rental agreements allow you and the tenant to access flexible rental terms. Well, have a glance at the month-to-month house rental agreement form.
Short Term or Vacation Rental Agreement
If you are planning to go on a vacation and don’t want to live in hotel rooms, rent a house for a short time, in other words, go for a hotel room rental agreement template. A short-term rent agreement draft is perfect for renting a place for 1-31 days. It is also termed a vacation rental agreement. It is all about informing the guests of the rules they need to follow while staying at the property. Additionally, it enlists everything that guests can expect in their vacation home.
Rental & Lease Agreement Forms
Subleasing Agreement Sample
An individual can rely on a Subleasing Agreement for renting out an entire property or just opt for a room rental agreement specifically if he/she is already bound to an existing rent agreement draft. Usually, subleasing agreements are used to rent another property notably when you don't want to break the norms of an existing lease agreement.
Room Rental Agreement Template
Count on a room rental agreement sample format when you decide to rent out a particular room. It helps to set specific rules as well as boundaries for the tenant. For instance, you can use this type of rent agreement online in India to tell the tenant about the rent division, utility payments. You can even restrict the guests and persons along with time boundation through such agreements.
Commercial Rental Agreement Sample
Commercial rental agreements are used to rent out an entire building or floors and offices within a building. The same can be used to rent a retail space, food outlet, restaurant, or industrial facility. Any commercial property can be leased through the commercial lease agreement.
Land Lease Agreement Sample
To rent a piece of land or plot, a land lease agreement is used. Such agreements can be signed with multiple purposes such as agricultural purpose, residential purpose, or commercial purposes. Furthermore, to be extra careful and vigilant, keep multiple copies of the rental agreement in hand.
Rent-to-Own Lease Agreement Sample
Usually, a rent-to-own lease agreement is used for offering the tenant the ability to purchase the property at the end of the signed agreement. It is the foremost option when the tenant cannot purchase the property right away. Additionally, it helps the seller to generate a steady income before actually selling the property.
Rent and lease agreements are different, but maybe to a layman, they seem similar. It is quite possible before reading this post, you were one of those. However, don’t belittle yourself as we all are travelling on the same boat. Yes, including us. Shocking, right?
That’s why we have dug deep to make you acquainted with the rental lease agreement concept in detail. Always remember, two parties are involved in an agreement, however, the responsibilities and roles of each party differ.
For Instance, in the lease agreement, both the parties possess equal rights. But in a rental agreement, the landlord is always in power. As he or she has the upper hand, yet both parties can decide when to exit the tenancy agreement.
Bottom Line, if you are planning to shift to a rented house, ensure you have ticked off all the aforementioned checkpoints in your rental agreement.
Frequently Asked Questions
1. Passport-size photographs.
2. Photocopy of identity proof (PAN card, Aadhar card, election card, passport, etc.).
3. Original identity proof for verification.