How to prepare a Rental Agreement in Delhi? A Complete Guide

If you have already got or are still in the pursuit of a place for yourself (in Delhi) or if you own a property in Delhi and are looking for suitable tenants, familiarizing yourself with the lock stock and barrel of rent agreements will help you dodge any sloppiness in the future.

NEW DELHI: India is booming. The rise of jobs in metro cities has tugged a lot of people towards destinations like Delhi, Mumbai, Hyderabad, Kolkata, and Bangalore.
Anywise, one of the most exhausting and arduous tasks that you would experience in the process of shifting to a new city is finding the right accommodation. Delhi, being the capital, and inevitably the most faddish place to be in India, offers a wide range of accommodation options for people.

In this degree, if you have already got or are still in the pursuit of a place for yourself (in Delhi) or if you own a property in Delhi and are looking for suitable tenants, familiarizing yourself with the lock stock and barrel of rent agreements will help you dodge any sloppiness in the future.
Rental Agreement - What it is and why you need it?

A rental agreement is a legally binding contract that incorporates all weighty stipulations to secure property-related accords and to serve the purpose of a reference document for all parties involved.
That one may secure the interest of both parties (tenants and owners) and to subserve as a piece of collaborative evidence in case of any contradiction, it becomes paramount to come up with a rent agreement that has no inaccuracy.

So, the rental agreement might save you from any ambiguity and tiff related to the property (whether you are a tenant or owner). Preparedness in advance is a definite road to peace.

Rent agreement in Delhi - putting it together

1. Drafting the agreement
2. Printing the agreement on stamp paper of fixed value
3. The signing of the agreement (by the tenant and the owner) should occur in the presence of two witnesses
4. Registration of the agreement (at the sub-registrar office)

Drafting the agreement
At the outset, outlining the rental agreement becomes perhaps the most substantial stride for tenants and owners, both.
It includes:

• Discoursing paramount elements such as rent, security deposit, maintenance charges and so on
• Devising a rough draft with specifics like names and addresses of parties involved
• Incorporating significant clauses (where both parties come to a concurrence)
• Buying stamp paper of recommended value and printing the draft on the same
• Make the signing of documents by both parties (tenant and owner) happens in the presence of two witnesses
• Registering the feat at the local Sub-Registrar office

[Notes: A stamp duty is a duty payable to the Government whenever an agreement or transaction is implemented. It is calculated contingent upon the value of the transaction and is paid to the Government by buying Stamp paper of corresponding value. Two types of stamp papers are available; conventional one and the e-Stamp paper.]
e-Stamping in Delhi
The traditional stamp paper system is already discarded in Delhi. Hence, you would have to opt for the e-Stamping system that is regulated by the Stock Holding Corporation of India (SHCIL).
However, the purchase of stamp paper can be done by reaching out to e-Stamping vendors. While filling the application form, you would be required to render your name and clear objective of why you require the e-Stamp.
The registration process - know what you need
Tenants and owners, both have to follow a definite roadmap for the registration of lease/rental.
Charges involved

• The cost of Stamp paper is; 2% of the total average annual rent plus Rs 100 (for the security deposit paid) if the least stretches up to 4 year time period; 5% of the value of the average annual rent for a lease of 5-10 years; 5% of double the value of average annual rent for lease of 10-20 years period.
• Along with this, you would also need to take a DD (demand draft) of Rs 1100 to cover for the registration charges.

• Ownership proof or title proof to the property
• Passport size photographs (two)
• Aadhaar card (or its receipt)
• Proof of identification like passport or driving license or voter ID card or similar
• Rental agreement printed on the stamp paper
• Demand draft of Rs 1100 (registration charges)

• Passport size photos (two)
• If you are an Indian citizen, Aadhar card or its receipt would suffice; for foreign nationals, the original passport is required
• If a company is renting the property, a board resolution or an authorization letter from the company stating the person's right to register the lease along with the company seal is required
• A power of deed is required if one person is representing the other

Note: Notarization is not the same as registration; the court does not accept notaries as evidence if any case arises. Even if a deed is notarized, registration is still needed.
Types of rental agreements

1. 11-month rental: This is the most prevalent variant of the rental agreement that you would find in Delhi and adjacent cities. The lease is prepped for a duration of 11 months and the renewal is done at the end of 11th month. The tenant has to pay monthly rent along with electricity & water charges and maintenance fees.
2. Long-term lease: You can also select the long-term lease renting method in which an accord is made for a fixed time epoch. This lease type requires no monthly rent provision instead, the owner is subjected to return the lease amount to the tenant at the end of lease tenure. As a tenant, you would have to regularly pay the utility bills (electricity and water charges) and maintenance charges.
3. Commercial rental lease: This type of lease comes handy when the agreement between two parties is made for a commercial property. For a commercial rental lease, you can do the Stamp Duty and registration in the same manner as for the residential properties.

Some important clauses to consider
The last thing you want while shifting to your new home is to have a lousy experience with your landlord. Thus, while you are all set to sign up your new rental agreement, take a gander whether you have considered the following clauses in the lease:

• Lock-in period - This is the minimum time-frame before which agreement cannot be discontinued by either party.
• Pet constraint - if you have a pet, it gets imperative that you incorporate this clause in the lease.
• Overstay - As an owner, you can always charge your tenants on a per-day basis if they stretch their stay beyond the agreed time-frame.
• Clause for delayed payment - Tenants need to pay their monthly rent before a fixed date or a specified penalty or fine is levied on them.
• Maintenance clause - Always clear who (tenant or owner) is going to pay the maintenance charge before the signing of a contract. It avoids future conflict between tenants and owners.

1. Why is the rent agreement for 11 months?
   Rent agreements are typically made for 11 months so as to avoid the cost associated and the complexity of registration that is mandatory for accords of more than one year. Know more here.
2. What is the rent agreement registration process?
   It is mandatory to register a rent agreement of more than one year with the local authority. To know more, click here.
3. Is it mandatory to notarize a rental agreement?
   No, it is not essential to notarize a rental agreement as long as it is printed on stamp paper and is duly signed by both parties and two witnesses.
4. What are the charges for Notarized rent Agreement?
   Notarized rent agreement is made on 100 and 500 rupees stamp paper.