Residential Lease Deed

What is a Residential Lease Deed?

A Residential Lease Deed is a document that outlines the rights and responsibilities of both the landlord and tenant when a residential property is being rented. Leases can be short-term (a few months) or long-term (a year or more) and are used for various types of rental properties, including homes and apartments.

What is the difference between a Residential Lease Deed and a Commercial Lease Deed?

A Residential Lease Deed is not the same as a commercial lease deed. In a commercial lease deed, the tenant is typically a business entity and the property is used for business-related activities such as retail, office work, or manufacturing. The commercial lease deed is quite detailed and outlines the responsibilities of each party involved, including taxes, maintenance, and restrictions. Usually, commercial lease deeds are entered into for longer periods of time.

Is it mandatory to have a Residential Lease Deed?

No, it is not mandatory to have a Residential Lease Deed. However, having one will help both parties to have a clear understanding and avoid any disputes in future.

What must a Residential Lease Deed contain?

A Residential Lease Deed must contain the following clauses:

• Parties involved: names and details of the landlord and tenant.
• Property description: detailed description of the rental property.
• Term of lease: duration of the lease agreement.
• Rent amount: rent payment intervals, due date, etc.
• Payment methods: the method of making the renal payment including cash, online payment, etc.
• Security deposit: the amount of security deposit, method of payment, return terms, etc.
• Maintenance and repair: defines who is responsible for major or minor repairs of the property.
• Utilities: includes the details of utilities included and the tenant's responsibility.
• Use of property: the accepted way of using the property and surrounding facilities.
• Subletting: rules regarding further rending out the property by the tenant.
• Termination: conditions under which the lease can be terminated by either party.
• Renewal options: conditions for renewing the lease at the end of the term.
• Inspection: The landlord's right to inspect the property with notice.

Who can enter into a Residential Lease Deed?

Any individual above the age of 18 years or entities registered in India for utilising it for employees.

What can be the duration of a Residential Lease Deed?

The duration of the Residential Lease Deed varies from one year to several years. It depends on the nature of each transaction. Often, the Residential Lease Deed has a clause for automatic renewal, under which the Residential Lease Deed extend to a further period unless terminated by either party in writing.

What has to be done once the Residential Lease Deed is ready?

The Lease Deed would need to be printed on non-judicial stamp paper or e-stamp paper, which is available in certain states. The value of the stamp paper would depend on the state in which it is executed, as well as the duration of the lease and the lease rent. Each state in India has provisions in respect of the amount of stamp duty payable on the lease deed, and the same would need to be determined based on the specific facts of the case. Information regarding the stamp duty payable can be found on the State government websites.

After printing the document on stamp paper or e-stamp paper, as applicable, both parties should sign the lease deed and each party should keep a copy of the lease deed.

Is it necessary to register a Residential Lease Deed?

Yes, the Residential Lease Deed need to be registered if the period of the lease is more than one year. For registration, both the lessor and lessee have to go to the concerned office of the sub-registrar where the property is located.

Is it necessary to have witnesses for a Residential Lease Deed?

Yes, two witnesses over the age of 18 are required to register a Residential Lease Deed. Even if registration is not completed, having two witnesses will aid in resolving disputes easily.

Which laws are applicable to a Residential Lease Deed?

Residential Lease Deed in India may be subject to the rent control laws of individual states. Rent Control Acts provide some rights and benefits to tenants such as protection against eviction, limits on the rent being charged etc. Where a property falls under the rent control law, the tenant may become a statutory tenant. However, these acts apply only to a tenancy of over 12 months.

Further, in terms of the Transfer of Property Act, 1882, Registration Act, 1908 and Indian Contract Act, 1872 would be applicable to Residential Lease Deed.

It would be useful to note that it is required to carry out police verification of tenants in some states in India, prior to giving the residential property on lease to such tenants.

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