What is Registered Rent Agreement and why its need?
Registered Agreement is that agreement which you are preparing is for a period of 12 months or more, then, you need to register the rent/lease agreement at the sub-registrar office in your city.
The registration fee differs from state to state. However, it could be approximately around 3.4% of yearly rent. The registered rent/lease agreement is a legally binding document.
It is made under the section 55 of Maharashtra Rent Control Act 1999
A rental agreement safeguards the rights of both parties from future disputes. It provides security to the landlord for his property and protects tenants from any unlawful and unjustifiable demands of the landlord.
This rental agreement gives ownership of the property to the tenant for the specified time as oral agreements are not enforceable in courts of law, so it is advisable to execute a written agreement.
What is Non- Registered (Notarize) Rent Agreement?
If the rent/lease agreement that you are preparing is for a period of less than 12 months, then, you do not need to register the rent/lease agreement.
Typically, non-registered rent/lease agreement is prepared for a period of 11 months. A non-registered agreement can be prepared on Rs 50, or Rs 100 Stamp paper issued by the state. Once, the document is prepared, it is notarized by the local notary.
In case there is an issue between owner and the renter, the non-registered rent/lease agreement can also be presented in court of law as a proof of agreement between an owner and renter.
What is difference between Notarize Rent Agreement and Registered Rent Agreement?
Notarized rent agreement is attested by the Public Notary approved by the government, while the registered agreement is prepared at the office of sub-registrar by paying stamp duty & registration charges.
|Notarize Rent Agreement||Registered Rent Agreement|
|Not admissible in court||Can be accepted in the law of court in case of any disputes|
|Not mandatory but advisable to make one||It is compulsory to get a rent agreement for period above 11 months|
|Lower cost for notarized rent agreement||Higher cost of registration; stamp duty applicable|
|Not applicable Act||Section 55 of Maharashtra Rent Control Act 1999|
The registered rent agreement is admissible in the Court in case of any legal proceedings. The provisions of the Rent Control Acts of the central government and various state governments are not applicable if the rent agreement is not registered.
Notarized Agreement is an agreement attested by the Notary Public appointed by the government. If the agreement is of 11 months, then it is compulsory to notarize the Rent Agreement. This should be done because the signature on the agreement is considered to be valid only if the government-appointed lawyer has signed and put a seal on the agreement.
Registered Agreement is an agreement which is done at the sub registrar’s office. It is registered by paying the stamp duty and registration fees.
Types of Rental Agreement in Maharashtra
- Leave and License Agreement: It is a document that permits the Licensee to occupy the property of the Licensor on a leave and license basis, as opposed to the rental agreement that creates tenancy. Hence, such agreements make evictions easier and give power to Licensor.
- Commercial Rental Agreement: Such kinds of rental agreements are signed for business or commercial purposes only and hence they rarely have a standard format as the agreement must adapt to the needs of the particular business being considered for agreement. In this kind of rent agreement, a large amount of money is involved and is signed for a long period. Hence, registration and proper stamp duty are rarely overlooked.
- Long-term Rental Agreement: This type of rental agreement is typically used for residential purposes where a huge lump sum is paid in advance and the agreement is for the long-term. Hence, Registration and proper Stamp Duty are important aspects of this kind of agreement.
- 11- Month Rental Agreement: This is the most commonly used agreement format in the state of Maharashtra. The term of this agreement is 11 months at the end of which both parties have the liberty to renew/ terminate the contract. A few months’ worth of rent is collected as a Security deposit. Registration is not compulsory as the term is less than a year and such leases will require the tenant to pay a fixed monthly rent to the landlord. Hence, it is advantageous to go for this arrangement and opt for an 11-month contract. Thus, this arrangement saves money payable towards stamp duty and registration fees.
Is it compulsory to register rent agreement in Maharashtra?
Yes, it is compulsory to register rent agreement in Maharashtra as per Section 55 of the Maharashtra Rent Control Act, 1999, every tenancy agreement must be in writing with mandatory registration, regardless of tenure.
What is section 55 of Maharashtra Rent Control Act, 1999?
Section 55: Tenancy agreement to be compulsorily registered.
(1) Notwithstanding anything contained in this Act or any other law for the time being in force, any agreement for leave and license or letting of any premises, entered into between the landlord and the tenant or the licensee, as the case may be, after the commencement of this Act, shall be in writing and shall be registered under the Registration Act, 1908.
(2) The responsibility of getting such agreement registered shall be on the landlord and in the absence of the written registered agreement, the contention of the tenant about the terms and conditions subject to which a premises have been given to him by the landlord on leave and license or have been let to him, shall prevail, unless proved otherwise.
(3) Any landlord who contravenes the provisions of this section shall, on conviction, be punished with imprisonment which may extend to three months or with fine not exceeding rupees five thousand or with both.
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Documents Required for Registered Rent Agreement-
- Property proof while entering the property details.
- Property tax receipt.
- When we enter the party details, we also need the ID proof and address proof of both the parties.
- Photograph of both the tenant and the landlord
How to make Registered Rent Agreement of Maharashtra State?
Firstly, you have to open the following URL Link on any browser Department of Registration & Stamps (Maharashtra)
Step- 1 Open the above link then you will get below interface:
Step-2 Fill the New Entry where you have to choose
- Documents to be registered.
- Select District of Property.
- Create Password
- Confirm Password
Step-3 After that Click on the Next Button and next interface you have like below.
Step-4 Click on the “No” option and fill the property Details.
Step- 5 After filled the property Details, click on the Next: Party Details, then you have to fill the party Details as you can see below:
Step-6 After filled the party Details, you have to click on next button then you have a interface of Rent & other term where you have to capture photo and thumb impression as you can see below:
Step- 7 After the above process you have to click on save button and procced for Payment of Stamp Duty.
which may be 500 for Rural Areas & Rs1000 for urban areas.
Cost of Registered rent agreement
Following are the details of cost incurred for Registered Rent Agreement of Maharashtra
- 0.25% of the consideration value (Calculation of Consideration value are given below)
- The registration charges. The registration charges are Rs. 1000 for urban areas and Rs. 500 for rural areas.
- Vendor service charge for the visiting the owner and tenant to obtain Aadhaar biometric
We can calculate the consideration value as follows
0.25% of [(Monthly rent x license period) + (10% of refundable deposit amount) + (non-refundable deposit amount)].
Monthly rent, license period and deposit amounts are all given in the rent agreement.