It is imperative to study the rental agreement, if you are planning to move to a rented home or if you want to rent out your property to someone. Many people move to a rented house or let out a house on rent, without even making a legal rental agreement. Doing so can lead to a lot of problems in the future.
What is a rental agreement?
it is a written agreement between the owner of the property and the person who is taking it on rent. The rental agreement is also known as a lease agreement. it consists of all terms and conditions, by which the property has been rented out.
Things that are included in the rental agreement:
Why rent agreements usually of 11 months?
According to the Registration Act, 1908, it is mandatory to register the lease agreement in case the lease time duration is more than 12 months. If the contract has to be registered, you are needed to pay the registration fee and stamp duty. Stamp duty costs will be a certain percentage of the whole average annual rent of a year and registration fees will be a flat fee based on the state where you live.
Therefore, the primary reason why most of the rental agreements are signed for 11 months is to avoid stamp duty and other charges. Many landowners and tenants mutually agree not to register the rental agreement, to avoid fees and charges. If you want to register the lease, charges can be distributed between landlords and tenants.
At the same time, there is no rule which says that the rental agreement should be drafted only for 11 months. The agreement can be drafted for more than 11 months. But the stamp duty may vary based on the duration of the lease.