Rent Agreement Rule: Why rent agreements are mostly made for 11 months only? Know here

Rent Agreement Rule: A huge market for rent or living on rent has been created all over the world. Many people move from one place to another in search of better opportunities.

Therefore, most of us have either given a house on rent or are living on rent. When we live on rent. To live on rent in our country, tenants have to make a legal rent agreement (Rental Agreements in India 2024) with the landlord for a fixed period. This agreement is for a fixed period. Most landlords get the rent agreement, agreement or agreement prepared for 11 months as the shortest period.

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Have you ever wondered why this agreement is only for 11 months? Let’s know the reason and the rules related to it.

What is a Rent Agreement?

A rental agreement is a contract that describes how the tenant will rent a home and the rights and responsibilities of the tenant and the homeowner. These include monthly rent, use of the home, security deposit, rental period, and more.

Why are rent agreements made only for 11 months?

The biggest reason behind making a rent agreement for only 11 months is that the landlord tries to avoid legal troubles later. Because legally, in a lease where the agreement is for a longer period, words like rent, tenant and tenure are often used. This increases the possibility of the other party (tenant) subletting the property further under rent control laws.

This is tenant friendly. In case of a dispute, this agreement, which comes under the purview of the Rent Tenancy Act, can lead to a long court battle.

What are the legal rules related to rent agreement?

As per Section 17 of the Registration Act, 1908, lease agreements for a period of more than one year are mandatorily registered. This means that lease agreements for a period of less than 12 months can be made without registration. This option enables parties to avoid the tedious process of getting the document registered at the sub-registrar office and paying the fees for the same.

Relief from registration as well as saving of stamp duty

Moreover, when the tenancy is for less than a year, not registering also saves the cost of stamp duty. So usually, the landlord and the tenant mutually decide not to register the agreement to avoid paying such high fees. Because as per the rule, the longer the period of tenancy, the higher will be the stamp duty.

Why do landlords and tenants prefer 11-month rent agreement?

Instead of getting the rent agreement registered, most of the landlords and tenants get it notarized. It contains the address, current status and conditions of the rented house, flat, room etc. along with the signatures of both the parties and witnesses. This agreement can be terminated after a notice from any one of the parties at a fixed time. Apart from this, it can also be renewed easily if needed.

Finally, the biggest thing is that due to the 11-month rent agreement, the landlords get the opportunity to increase the rent by 10 percent every year. At the same time, the tenants have the freedom to change the house if they do not like it.

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