Know the Basics About Residential Rental Agreements
When you decide to put a property on rent or you’ve lived in a rented property, you must have signed an agreement of rent. Some of you all wondering why it is always for 11 months? In this article, we’ll be discussing why it’s always for 11 months of the residential rental agreements.
Benefits of Residential Rental Agreement
This residential rental agreements is also called a lease agreement. It’s a written contract between the two parties, the property owner and the person who takes its temporary possession of that property through paying a rent. The property owner is called the landlord while the renter is a tenant. The Residential Rental Agreements has its specified terms and conditions which are based on the property that is let out. As the description of the property, its address, area size and the type it is. The amount of monthly rent to be paid, amount of security deposit, the purpose or manner by which the property could be used by the tenant for example in the residential or commercial way. The duration of the Residential Rental Agreement is mentioned.
The terms and conditions can be negotiated by both the parties before signing the agreement. It will be in binding to both, the landlord as well as the tenant. There shall be mentioned, the conditions on basis of which the contract will be terminated.
Why is this rental agreement always for 11 months only?
Most of the Residential Rental Agreements is signed for 11 months, this is to avoid stamp duty and other charges. In accordance with the Registration act of 1908, the Registration of lease agreement is mandatory and if the leasing period goes more than the 12 month period, there is a Registration fee and stamp duty to be paid on it. In case, in Delhi, for the lease of up to 5 years of the time period, the stamp cost is 2% of the sum of the annual rent paid. There’s addition of a flat fee of Rs 100/- and in case the security deposit is part of your Residential Rental Agreement.
When leasing together for 5 years or more but not more than 10 years, then it is about 3% of the of the value of the annual rent Average.
The stamp paper could be in the name of either tenant or in the name of the landlord.
Proceed to 10 years of leasing but lesser than 20 years then it is 6% of the annual rent Average. The Registration of the flat is charged Rs 1100/- has to be also paid by the demand draft.
If any property is being let out on a rent for 24 month period at an agreed rent of Rs 20,000/- for the 1st year or 12 months of agreement then charge for registering this will be 2% of the average rent for the year or 12 months period.
That is, for a 2% rent fee of Rs 5040/– the average of monthly rent is Rs 21,000/- average rent being Rs 21,000/- annually so the average annual rent becomes 21 x 12 and 2% of the Rs 5040/-. Are you willing to apply for the Residential Rental Agreement?
If yes then you must be willing to hire a professional who can help you with the complete precise procedure without any hassle. Skilled experts at Swarit Advisors are constantly dedicated to helping you with the best possible solutions all you have to do is to drop us an email so that we can reach you. We are 24/7 hour accessible and available to serve you in every possible means.