In order to avoid these juicy fees, tenants and landlords agree not to register the contract. As a result, most leases are signed for an 11-month period. In addition, the establishment of an 11-month lease gives the lessor flexibility in determining rent as the dominant market scenario. The 11-month contract is currently under extensive review. It should be noted that such leases are generally entered into for residential real estate and not commercial real estate, as they have a longer lease term and these documents must be registered. Most leases are signed for 11 months so they can avoid stamp duty and other fees. Under the Registration Act of 1908, registration of a lease is mandatory if the tenancy period is more than 12 months. If an agreement is registered, stamp duty and registration tax must be paid. For example, in Delhi, for a lease of up to five years, stamp paper costs 2% of the total annual rent of one year. Add a flat fee of Rs100 if a security deposit is part of the agreement. For a lease of more than 5 years but less than 10 years, it represents 3% of the value of the average annual rent for a year. For 10 years and more, but less than 20 years, it is 6% of the value of the average annual rent of a year. The stamp paper may be in the name of the tenant or landlord.
In addition, a flat-rate registration fee of EUR 1,100 million must be paid by the draft application (DD). If a property is rented for 24 months with a monthly rent of Rs20,000 for the first 12 months and 22,000 Rs. per month for the next 12 months. The registration fee of this agreement would be: 2% of the average rent for 12 months: Rs5.040, (average monthly rent is Rs21,000, average annual rent is 21000 – 12 and 2% is Rs5,040). 11-month contract model required for the tenancy succession are the consequences that you will have if the lease is renewed for more than 11 months: leases made pursuant to the provisions of the Indian Easements Act, 1882, as leave and licensing agreements for an 11-month period, have no validity under the laws of rent protection. Rent control laws, which differ from state to state, have under their control all leases concluded for a period of at least one year. These archaic laws, widely enforced worldwide after the Second World War, set strict rules that complicate rentals, especially for the owner. Landlords who rent their premises under these laws, for example, will find it extremely difficult to revise rents and evict tenants. In the case of Abdul Rasheed/Srinivas, Judge HG Ramesh considered “whether a rental case for which the specified rental period does not exceed one year should be registered under the Registration Act of 1908.” LegalDesk.com offers a very convenient way to visit your online rental contract and without having to worry about lawyers or looking for stamp papers.