A lease is a contract whereby the owner of a property (Lessor) allows usage of his/ her property for a definite period of time to another party (Lessee) in consideration of a monthly rent from him/her.

When the Lessor agrees to lease out his/her property to the Lessee on certain terms and conditions them both the parties enter into a formal agreement which referred to as as the lease agreement where they set the terms and conditions for the usage of the property and it is signed by both the parties in presence of witnesses. Just like a sale deed, the lease agreement is required to be registered in the office of sub-registrar.

The terms of the agreement is of utmost importance in order to protect the interests of both the parties specially the Lessor or the Owner. So, your rental agreement must include:

a)    The details of the Lessor/s and the Lessee/s along with current addresses.
b)    The monthly rent and security deposit details to be paid by the Lessee.
c)    The terms of tenancy and when it will end along with late fees in case of default in terms.
d)    Details of what is included in the rental and what is charged separately.
e)    Number of occupants and whether pets are allowed in the property
f)    Terms regarding major and minor repairs in the property. And Landlord’s access to the property for maintenance related work or just for inspection.
g)    Terms related to wear and tear of property or in case of major damage to the property.
h)    Lock-in period and Notice period details.
i)    Signatures of both the parties in the presence of witnesses


 

The registration of rent agreement is mandatory in Delhi in cases where the term of tenancy is more than 12 months. As per ‘The Delhi Rent Control Act, 1995’, the registration of rent agreement is a must otherwise the consequence under the Registration Act, 1908, becomes applicable. However the registration is not mandatory in Delhi if the rental period is less than 12 months. But it is still advisable to get the rent agreement registered in order to have a legal protection and safeguard the rights. Because only a registered rent agreement can be produced as legal evidence by the parties to it, for resolving any dispute in the court of law.

The registration cost of taking a property on rent is 2% of the average annual rent decided by the parties to it in case the lease term is upto 5 years. But in case it is beyond 5 years then the registration cost is equal to 3% of the average annual rent (of all the years including any escalation in the future years).
The above cost includes stamp duty charges and the registration fee.

 

In general, the registration cost in case of lease agreement is borne by both the parties equally.