[ecis2016.org] Bangalore, the IT hub of India, attracts techies from across the country. Renting a property and making a rent agreement in Bangalore can be a herculean task. Here is how it can be done smoothly
Karnataka’s capital city Bangalore is widely known as the ‘Silicon Valley of India’ or ‘IT capital of India’, as majority of technological organisations are based here. Being one of the country’s fastest-growing cities, in terms of contribution towards GDP, the IT hub witnesses many people shifting here year after year, propelling high demand for rental properties. The residential rental market is quite mature and organised in Bangalore, as compared to other cities in India. However, if you are planning to put your residential property on rent or are looking to get a property on rent, it is crucial to follow the right steps, to avoid hassles and disputes. How to go about it? You need to be aware of the rules related to rent agreements and the process involved in it, to avoid rental conflicts. There are already many cases pending in courts, either due to the absence of rent agreements or inappropriate rent agreements. Moreover, rules applicable in making a rent agreement may vary from place to place. So, it becomes important to understand the rules related to rent agreements in Bangalore.
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Before getting into the process of making a rent agreement, let us first understand what a rent agreement means.
What is a rent agreement?
A rent agreement is a contract between the landlord and the tenant that specifies various terms and conditions for which both parties give mutual consent. The term rent agreement is often used interchangeably with the term lease agreement. A written rental agreement, if registered, can be used as a proof to resolve any rental dispute.
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What is the process of preparing a rent agreement in Bangalore?
The process to make a rent agreement is usually the same in most states in India. Let us check out the steps to create a rent agreement in Bangalore:
- The landlord and the tenant should list out various points that they want to include in the rent agreement. Mutual consent of both parties on each point is necessary.
- Once both parties agree on the terms and conditions, they need to get it printed on an agreement/plain paper.
- It is crucial that both the parties read the printed agreement paper once again, to verify the clauses and avoid discrepancies.
- If both the parties are satisfied with the content of the agreement, they have to sign the agreement in the presence of at least two witnesses.
Why rent agreement is for 11 months?
The 11-month agreement is a general trend in most of the cities across India. You must be wondering, why? The answer lies in the Registration Act, 1908. According to this Act, it is mandatory to register a rent/lease agreement if the rental period is more than 12 months. So, people generally make a rent agreement for 11 months, to avoid the registration process. It allows them to save stamp duty and registration cost. However, in some cities and states, it is mandatory to register the rent agreement, irrespective of the rent tenure.
[ecis2016.org] Stamp duty and registration charges in Bangalore
Is it mandatory to register a rent agreement in Bangalore?
As far as rent agreement in Bangalore is concerned, it is not mandatory to register the agreement if the agreement period is less than 12 months. However, it is highly recommended to get the agreement registered. The benefits of registering the rent agreement are as mentioned below:
- A registered rent agreement is legal binding on both the parties, who are required to comply with the agreed terms and conditions.
- A registered rent agreement is legally enforceable. Therefore, it can be used as evidence when there is a dispute between the two parties.
Here it is important to note that only a written agreement can be registered and enforceable under the law. Oral rent agreements cannot be registered under the law and so, you must avoid it.
How to register a rent agreement in Bangalore?
A properly-drafted rent agreement helps in building a cordial relationship between the landlord and the tenant. First, you need to get the rent agreement printed on a stamp paper of appropriate value. Thereafter, you can visit the local sub-registrar’s office (SRO), along with two witnesses, to get it registered. The landlord and the tenant need to visit the SRO to sign the documents. However, if one of them or both the parties are not present, their power of attorney-holders can sign the document on their behalf. The two witnesses also need to sign the document, before the process is completed.
Documents required for registering a rent agreement in Bangalore
Before going to register a rent agreement in Bangalore, keep the following documents handy with you:
- Documents as proof of ownership: Original / photocopy of the title deed.
- Other documents: Tax receipt or Index II.
- Address proof of both the landlord and the tenant: Photocopy of passport, Aadhaar, driving licence, etc.
- Identity proof: Copy of PAN card or Aadhaar card.
- Photograph: Two passport-size photographs of each party.
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Online rent agreement facility by ecis2016.org
The online rent agreement facility at ecis2016.org provides landlords and tenants with a user-friendly platform. The users can complete the entire process through the online platform. ecis2016.org offers an entirely contact-less procedure, which is easy and convenient for users. Once the process is completed, the agreement is directly sent to the parties. The online rent agreement facility by ecis2016.org is currently available in 250+ cities across India.
Benefits of online registration of rent agreement in Bangalore
When the rent agreement registration process is available online, there is no reason to waste time on offline registration. Some of the benefits of online rent agreement include reliability, transparency and cost-effectiveness. It saves the trouble of having to go out for buying an agreement paper, getting it printed and registering it with charges involved. The online method saves time and money. Many companies provide the facility to get a rent agreement done online. Their services are cost-effective and hassle-free.
How much does a rent agreement cost in Bangalore?
Making a rent agreement in Bangalore usually includes three costs, i.e., stamp duty charges, registration fee, and legal consultancy charges, if the parties involved in agreement hire a legal expert.
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Stamp duty charges on rent agreement in Bangalore are as mentioned below:
- For rent agreement of less than one year: 0.5% of the annual rent plus deposit, or Rs 500, whichever is lower.
- For rent agreement of up to 10 years: 1% of the annual rent plus deposit, or Rs 500, whichever is lower.
- For rent agreement of above 10 years and up to 20 years: 2% of the annual rent plus deposit, or Rs 500, whichever is lower.
Non-judicial stamp paper or e-stamping/franking procedure can be used to pay the stamp duty. The registration charge is minimum of Rs 200 and ranges from 0.5% to 1%. If you hire a legal advisor, it may cost you an additional fee as consultancy charges.
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Points to keep in mind while making a rent agreement
Other points to be kept in mind while making a rent agreement are as follow:
- Do not sign the document before franking is done, as it may not be allowed by the bank.
- Do not forget to include the rent increment clause while making the agreement.
- Notice period details should be clearly mentioned in the agreement.
- Rent receipts should be given to the tenant within the time period mentioned in the agreement.
- Details of all the fittings and fixtures in the apartment should be clearly mentioned in the rent agreement.
A rent agreement can safeguard both, the landlord and the tenant, from disputes in future. If you are looking for a good relationship as a landlord and as a tenant, then, the rent agreement should be enacted with utmost care and after mutual consent at each point.
What is power of attorney?
Power of attorney (POA) is an authority granted by the principal or grantor to a person who is acting as his/her agent, to take any action on his/her behalf. Such an agent can be allowed, with a limited or absolute authority, to make financial, property-related decisions, etc.
How many months’ deposit is required while making a rent agreement in Bangalore?
The usual practice in Bangalore is to give around three to six months’ rent amount as a deposit. However, one can convince the landlord to reduce the deposit amount further.
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