In accordance with Section 17 of the 1908 Registration Act, leases of more than one year must be registered with local authorities. Both parties pay stamp duty and registration fees. As a general rule, the tenant must pay the additional rental fee. Under Delhi`s Rent Control Act, for example, landlords can increase their rent by 10 percent after three years – the common practice is to increase rent by 10% each year. When reconstituting the unit with the prior permission of the tenants, landlords can increase the rent amount by up to 15 per cent of the cost of the supplements made in the property. Here are the consequences you must have if the lease is renewed for more than 11 months: Most leases are signed for 11 months, so they can avoid stamp duty and other fees “From a monetary point of view, it would be costly for a tenant if leases were entered into for a period of more than 11 months. From a legal point of view, it would be quite complicated for the owner,” adds Mishra. 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. In Haryana, stamp duty on leases varies between 1.5 and 3% of the average annual rent, depending on the rental period indicated in the document. Registration fees vary between Rs 1,500 and Rs 16,000 depending on the amount of rent. Most of you must have lived in a rented home while training or working. While some may have put a property on rent.
In both cases, you must have signed a lease. Have you ever wondered why most of these leases are only valid for 11 months? Most of the time, neither the landlord nor the tenants and the real estate agents know the reason. If you want to know why, keep reading this blog. 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.