If you are planning to rent a house, you must know about the house rental agreement. A rental agreement is an essential legal document that defines the rights and responsibilities of both the tenant and the property owner, ensuring transparency and preventing disputes.

Key Highlights:

• Tenants and owners must execute a rental agreement to prevent disputes and safeguard both their rights.
• Rental agreement format provides the general clauses to be included in the agreement.
• If the rent agreement period is more than 12 months, it must be registered at the Sub-Regisrar's office.

What is a Rental Agreement?

The rental agreement is an official agreement entered between the tenant and owner of a property. A rental agreement contains basic details of the residential property, property owner, tenant, term/ duration of the rental period, and the amount of the rent for the said term. 

• Tenant is the person who wishes to take temporary possession of the owner's property by paying the rental amount.
• The tenant can stay/use the property of the owner for the time mentioned in the rental agreement. 
• The rental or rent agreement must be drafted on stamp paper for it to be legally valid. 

Rent Agreement Format

A rental agreement format is a standard template that outlines the terms and conditions agreed upon between the landlord and the tenant. 

• It includes essential clauses such as details of the property, rent amount, payment terms, security deposit, duration of stay, maintenance responsibilities, restrictions, and termination rules.
• A valid house rental agreement format must be printed on appropriate stamp paper, signed by both parties, and witnessed by two individuals. 
• If the agreement exceeds 11 months, it must be registered at the Sub-Registrar’s office to be legally enforceable.

Download Rent Agreement Format Sample

Download Rent Agreement Format Sample

Types of Rental Agreements Commonly Used in India

There are 3 types of rental agreements in India: 

I. Rent Agreement 

Tenancy or rent agreement is a basic contract between landlord and tenant for temporary possession of a property.
Duration: Typically 11 months and can be renewed at the end of the period (If more than 11 months, registration is mandatorily required).
Key points:

• Covers details like names, property description, rent amount, late fees, grace period, security deposit, facilities, parking, repairs, insurance, etc.
• Concise and hassle-free.
• Registration is optional if tenure is less than 11 months

II. Lease Agreement 

Lease agreement is a more formal contract for longer occupancy (usually over 12 months). It is governed by the State's Rent Control Laws.
Duration: Typically more than 12 months.
Key points:

• Creates an interest in the property, meaning the tenant has certain rights like using it for the agreed period (even if sold).
• Can be for extended periods.
• Binds both parties for the agreed term.
• Mandatory registration: required for legal enforceability.

III. Leave and License Agreement

This agreement is a permission to occupy a property, not a tenancy agreement.
Duration: Flexible.
Key points:

• Differs from lease agreements as it doesn't create an interest in the property.
• Revocable by the owner anytime.
• Grants "permission" to occupy, not rights.
• No landlord-tenant relationship; easier evictions.

Terms of a Rental Agreement

The terms of a house rental agreement vary from place to place. However, the usual contents of a rental agreement include:

• Names of the landlord and tenant and/or their agents.
• Description (Address) of the property.
• Amount of rent and due dates for payment, grace period, late charges.
• The person responsible for the payment of any other amount such as property tax, TDS (if applicable), property repair changes, society/flat maintenance changes, water bill, electricity bill, etc.
• Mode of rent payment.
• Methods to terminate the agreement prior to the expiration date and charges if any.
• Amount of security deposit and the account where it is held.
• Utilities furnished by the landlord and, if the landlord charges for such utilities, how the charge will be determined.
• Facilities in the premises which the tenant is entitled to use such as swimming pool, security systems etc.
• Rules and regulations such as pet rules, noise rules and the penalty for violation.
• Identification of parking available, including designated parking spaces, if provided.
• How tenant repair requests are handled and procedures for emergency requests. 

E-stamping of Rental Agreement 

In some states, the e-stamping facility for rental agreements is available. Where the e-stamping facility is available, the parties need not buy the stamp paper from the Sub-Registrar office to print the rental agreement. Instead, they can log on to the Stock Holding Corporation of India Ltd (SHCIL) website and check if the state where they reside offers this facility.

States that Allow E-Stamping

The following states currently support e-stamp paper for rental agreements:

• Assam
• Himachal Pradesh
• Gujarat
• Karnataka
• Delhi-NCR
• Maharashtra
• Uttarakhand
• Tamil Nadu
• Uttar Pradesh

Note: E-stamp paper cannot be purchased directly online from the SHCIL website. It must be bought from authorised centres. If the state where the parties reside offer e-stamp paper, they need to purchase the e-stamp paper from the allotted centres in their respective cities and get the rental agreement printed on it. 

Documents Required for Registration of Rental Agreement 

The general documents that must be submitted by the landlord, tenant and witnesses for registration of the rental agreement are as follows:

• Proof or evidence of ownership of the rented property (title deeds of the property having the name of the landlord)
• Property documents such as tax receipt of the property to be rented out
• Passport-sized photographs of each of the parties and the witnesses 
• Address proof of both parties and witnesses (Passport, Aadhaar card, ration card, bank passbook or driving license) 
• Route map of the property to be rented out, if required
• Any other document specified by the Sub-Registrar's office

Rental Agreement Procedure

Below is the process for making a house rental agreement:

Step 1: Draft the rental agreement and review of the agreement by both parties, i.e. owner and tenant.
Step 2: Finalise the draft rental agreement and print it on stamp paper obtained from a Sub-Registrar's office.
Step 3: Ensure the owner, tenant, and two witnesses sign the rental agreement.
Step 4: Get the agreement registered at the Sub-Registrar's office if the duration of the rental period is more than 11 months.
Step 5: Make a photocopy of the signed (in case of 11 months rent) or registered (in case of more than 11 months rent) rental agreement and give a Xerox copy of the agreement to the tenant.

How to Execute a Valid Rental Agreement?

According to the Registration Act of 1908, the registration of a rent agreement is mandatory if the duration of the rental agreement is 12 months or more. 

However, if the duration of the rental agreement is 11 months or less, there is no requirement to register the agreement. In such a case, drafting and signing the agreement on the stamp paper will be valid as per law.

When E-Stamping is Sufficient (11 Months or Less) 

For rental agreements up to 11 months:

• The rental agreement needs to be printed on an e-stamp paper obtained from the Sub-Registrar office of the place where the property is situated. 
• After the rental agreement is printed on the stamp paper, each page of the stamp paper must be signed at the bottom by both the owner and tenant. 
• Two witnesses must also sign the agreement along with their names and addresses.

When Registration is Mandatory (12 Months or More)

In case the rent agreement duration is 12 months or more: 

• The rental agreement needs to be printed on stamp paper and it needs to be registered with the Sub-Registrar’s office of the area where the rented property is situated. 
• The landlord and tenant must be present at the Sub-Registrar’s office to execute the agreement. 
• They must sign at the bottom of each page of the stamp paper on which the agreement is printed in the presence of the Registrar. 
• Two witnesses must also sign the agreement along with their names and addresses to make the agreement valid.
• It should be registered after paying the required fees.

A rental agreement protects the interests of both landlord and tenant, ensuring smooth occupancy and preventing disputes. Understanding the correct rental agreement format and legal requirements, especially stamping and registration, is crucial before signing. Downloading and reviewing a rental agreement sample helps both parties stay informed and compliant.

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