Rent Agreement Rule: There are 12 months in a year, yet why is the rent agreement only for 11 months? This is a question that must have come to your mind at some point. However, having an 11-month rent agreement is beneficial not only for the landlord but also for the tenant, which very few people know. Sudhanshu Mishra, Principal Partner, Square Yards, is explaining this to you in detail. Let us know the nuances of the rent agreement in 6 points.

What is a rent agreement?

It is a kind of legal document that is between the landlord and the tenant. All the terms and conditions of renting a house are written in it. Such as how much the rent will be, what the facilities will be, how long the agreement will be, the security deposit, who is responsible for the maintenance, and the way to end the agreement, or when it will end.

This paper protects both. If there is a dispute, it serves as evidence in court. This maintains transparency, and there is no confusion about the use and care of the house.

Why is it only for 11 months?

Rent agreements are also for more than 11 months. But the most popular is the 11-month one. Because it does not need to be registered. In an agreement of 12 months or more, registration and more stamp duty have to be paid, which is costly and hassle-filled. An 11-month agreement is convenient for both the tenant and the landlord. There are fewer legal hassles in increasing the rent or terminating the agreement. This method is cheap and easy.

Can an agreement be made for more than 11 months?

Yes, it can be made. An agreement can be made for one year, two years (12 or 24 months), or even more months. But it is necessary to register such agreements in the sub-registrar's office. Also, more stamp duty has to be paid. A long-term agreement provides stability to the tenant and a fixed income to the landlord. But with this, legal formalities increase. It depends on the consent and needs of both parties.

What are the legal rules of a rent agreement?

The rent agreement should be in writing, dated, and signed by both parties. If the agreement is for more than 11 months, then it is necessary to register it. It should clearly state the rent, security deposit, maintenance, and the terms of rent increase. It is made under the Indian Contract Act, the Transfer of Property Act, and the state's rent control laws. If a long agreement is not registered, there may be legal problems.

How much is saved by not getting it registered?

Having an 11-month rent agreement saves stamp duty and registration expenses. In this, the stamp duty is very low; sometimes it is just a fixed fee, and registration is also not required. Whereas, in an agreement of more than 12 months, the stamp duty is one percent of the total rent amount, and the registration fee is charged separately. This expense can be quite high.

How much can the rent increase after 11 months?
How much the rent will increase depends on the state's rent control laws and the terms of the agreement. Usually, there is a rule of 8-10% increase, so that the tenant is not burdened. In some agreements, a fixed increase is written, while in some the legal limit is followed. There is no rule of minimum increase, but the landlord usually increases the rent according to inflation and the market.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.