What is a Lease Deed?

A lease deed is an agreement or contract between the property owner (the landlord), often known as the lessor, and the tenant or lessee. This contract will include all of the terms and restrictions that must be fulfilled while the property is being rented out to that renter. These terms and conditions include the yearly rent, the time the rent will be paid each year, the landlord’s and tenant’s responsibility regarding maintenance and bills, the security deposit required, and so on. A lease deed is typically produced and required if a property is going to be rented out for an extended length of time. When the lease term exceeds 11 months, this agreement must be legally registered.

Legal Provisions

Section 107 of the Transfer of Property Act of 1882, A registered instrument is the sole way to lease real estate on an annual basis, for a term longer than a year, or to reserve a certain amount of rent each year. Any other leases on real estate may be executed through a lessee agreement with the delivery of possession or through a registered instrument.

In addition, under the Registration Act of 1908, certain agreements and documents must be officially registered with government officials. This assists in keeping track of potentially taxable transactions. Section 17 of the Registration Act of 1908 specifies that certain papers, such as lease deeds for properties with leases lasting more than a year, must be registered with the district registrar’s office. However, Section 18 of the same statute makes an exception for lease documents of less than a year. In summary, the Transfer of Property Act of 1882 and the Registration Act of 1908 govern the legislation about the registration of lease deeds.

What does the lease deed cover?

The terms and conditions in a lease deed are extremely significant and must be carefully considered because they dictate what may and cannot be done during the lease time. Here are some of the most crucial facts that should be included in a leasing agreement:

• Description of the property. This comprises the neighborhood, location, address, building, furniture in the property, and existing furnishings.
• The term of the lease. The lease term and provisions for renewal. The terms and circumstances for lease deed renewal must also be specified.
• The tenant’s rent, security deposit, and maintenance fees must be indicated. The due date for these payments should also be mentioned.
• Interest and penalties for late payments should also be specified.
• The lease contract should include the payment details that the renter must make regularly (electricity bills, water bills, utility costs, etc.).
• Any lease termination provisions should be disclosed. Other reasons for canceling the contract should be indicated. These could include contract breaches, illegal activity on the property, property damage, or refusal to pay monthly rent.

Is it mandatory to register a lease deed?

When the lease length exceeds 11 months, registration of the lease deed is mandatory. According to the Registration Act of 1908, every property leased for more than 11 months for residential, commercial, agricultural, hereditary allowances, or fishery purposes must be registered. Except for Jammu and Kashmir, every state in India enforces this regulation. If a lease deed is arranged for less than 11 months, it does not have to be registered.

Documents needed for leasing agreement registration

A lease agreement is essential for preventing future misunderstandings and disputes between landlords and tenants. If all of the terms and conditions are fully defined and agreed upon, both parties can resort to this contract if they have any disagreements about the lease. The leasing agreement may be recorded at the sub-registrar’s office. Registration must be completed at least four months before the expiration date of the deed. In the event of an expiration, a new lease document must be created. The following documents are necessary for lease deed registration:

• Proof of identity for both the landlord and the tenant. This can include an Aadhaar card, a driver’s license, a PAN card, or a passport.
• Address evidence for both tenants and landlords.
• Passport-sized color pictures of the authorized signatories (both landlord and tenant).
• If the property is a business, provide a company PAN card and a company seal/stamp.
• The original evidence of ownership or title of the property being leased.
• Property documentation, such as the Index II or tax receipt for the rented property.
• A route plan for the rented property.

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