Those who plan to rent a property in Mumbai must sign a rental agreement with the owner. Similarly, those planning to rent their property in Mumbai must implement a rent agreement with the tenant to formalize the rental process. This makes it necessary for both parties to know the process of implementing the leases in Mumbai.
What is the process of preparing a rent agreement in Mumbai?
The first step in establishing a rental agreement in Mumbai is obtaining mutual consent. The landlord and tenant must agree to the terms and conditions of the lease. The next step is to write the mutually agreed terms on a simple agreement/paper.
After the agreement is printed, both parties are advised to read all the points. If all the points are correct, the parties must sign the agreement in the presence of at least two witnesses.
Why are rent agreements for 11 months?
The Registration Act of 1908 requires a lease to be registered if the occupancy period mentioned in the contract is more than 12 months. People occasionally prefer an 11-month license and license agreement to avoid the stamp duty and registration price.
Is it mandatory to register a rent agreement in Mumbai?
Registration of a lease is not required in many places if the lease period is less than 12 months. It is still desirable that it is registered. However, it is important to note here that in Mumbai, under Section 55 of the Maharashtra Lease Control Act, 1999, it is necessary to make and record all written agreements, regardless of their tenure.
The registration of the rental agreement will make it legally binding for both parties to comply with the agreed terms and conditions. The parties may submit a registered rental agreement as legal evidence to resolve legal disputes.
Only written agreements can be registered and legally enforceable. Verbal agreements cannot be registered and are therefore not legally binding.
How to get a rent agreement registered in Mumbai?
It is the responsibility of the landlord to register the lease under the Registration Law. To register the rental agreement, you can visit the registered office of the nearest branch. Leases can be registered within four months after the title deed is created. At the time of registration, both parties must be present with two witnesses. In the absence of one or both parties, the registration can be carried out by the proxies, who have the right to finalize the agreement
Documents required for registration
Following are the documents needed for the registration of a rent agreement in Mumbai:
- The original / copy of the title deed as proof of ownership.
- Tax receipt or second index.
- Proof of residence of the tenant and owner. It can be a copy of the passport, Aadhaar card, driver's license, etc.
- Proof of identities, such as a copy of your PAN card or Aadhaar card.
Benefits of online registration of rent agreement in Mumbai
Mumbai is one of the most populated urban cities in India. Registering a rental agreement offline can be a time-consuming process for most Mumbai. In such a scenario, the online rental agreement process is highly reliable, transparent, and cost-effective. There are some well-established companies that offer hassle-free online rental agreement services to their clients. You can use these platforms, from searching for a rental home to registering a lease.
How much does a rent agreement cost in Mumbai?
The cost of registering a rent in Mumbai includes stamp duty, registration fee, legal advice fee (if you hire a legal advisor), etc. The stamp duty on the rental agreement is governed by the Bombay Stamp Act of 1958. Rent (or exit) agreements and license agreements must be stamped with a stamp tax of 0.25% of the applicable rent for the entire period. Stamp fees can be paid via non-judicial stamp paper, electronic stamps, or a cashier procedure. If you hire a legal expert to write a lease and record the contract, it may cost you an additional amount.
Points to keep in mind
Here are some important points to consider when concluding a rental agreement:
- The landlord can include a point in the agreement that says to increase the rent by up to 4% per year. If there is an improvement or deterioration in the quality of the leased premises, the rent can be adjusted up or down with the mutual written consent of both parties.
- The tenant has the right to receive rent receipts to pay the rent.
- The notice period must be established by both the landlord and the tenant in the agreement.
- Details of fixtures and fittings for the property must be mentioned in the rental agreement.
Also, read-Bombay HC - refund by the builder to buyers under RERA order not liable to TDS
