Rental agreement renewal online bangalore

Why Rental agreement is important?

Bengaluru is a fast growing city with a different kind of people and more strangers so it is good to have a rental agreement done and registered by a lawyer. And rental agreement some time works as address proof and helpful in many ways.

Rental agreement is an important document which defines the legally binding relationship between the tenant and the landlord. Usually, a broker is involved in carrying out the initial transaction between the two parties. However, both the parties can also take help of a lawyer to draw the rental agreement.

Always insist on presence of two non-beneficiaries while the rental agreement is being signed between the two parties. The rental agreement ought to be signed by the two non-beneficiaries (witness) to make it a valid one. You can make the rental agreement by paying appropriate stamp duty up to INR.500/-

The procedure goes as follows:

• Drafting of the rental agreement and printing it on a Stamp paper of appropriate value as mentioned.
• Getting the agreement signed by the owner and tenant in the presence of two witnesses.
• The two witnesses should also be signing and attesting the document.
• Getting the Rental Agreement registered at a nearest Sub-Registrar office after paying appropriate stamp duty & registration charges or You can make the Rental Agreement on E-Stamp paper of appropriate value.
• For leases with a term of 11 months or less, Registration is not necessary Notary is fine. For leases created for a year or more, registration is recommended.
• Required documents for making online rental agreement Aadhar card / Pan card of the tenant & owner.

Before taking a premise for rent make sure these details:

• Talk all terms initially itself.
• Verify the Identity of the Owner by asking for his/her ID proof and also whether the rental property belongs to the same person you are dealing with. For this, you can check the Electricity Bill or Tax Bill.
• Whether you are dealing directly with the owner.
• In case you pay any token advance request for a receipt or try to make it by cheque, DD or Bank transfer.

There are few things must be careful about rental agreement:

1. Rental cycle – Usually rental cycle must be 11 months. Agreement has to renew every 11 months.
2. Lock-in period – Try to get rid of Lock-in period.
3. Annual rental increment – Usually 5 – 10% depends on the location and accommodation.
4. Maintenance and other cost – Is maintenance cost and other cost (water, electricity, etc) includes in rent payable or excludes rent payable to owner.
5. Security deposit – Usually security deposit in Bangalore is 10 months of rent (Eg: Rent is Rs.10,000/- then the security deposit is Rs.1,00,000 ) Try to negotiate.
6. Is repair, damage cost or structural change borne by tenant or owner? Usually tenant has to bear during tenancy period.
7. Notice period – Usually 1 – 2 months of notice, Tenant has to inform owner at least 1 or 2 months in advance before vacating house.
8. Renovation cost – Tenant may paint and clean the house after vacating or appropriate cost (1 Month rent or actual renovation cost) detected from security deposit.
9. Get your rental agreement in E-stamp paper and notarize it by lawyer. This helps you to validate your rental agreement as address proof. Notarized agreement is applicable for applying gas connection, Bank application, RTO, Employee address proof etc.
10. Prefer transferring your rent and security deposit by wire transfer instead cash. Wire transfer records your transaction and avoid any kind of transnational discrepancy between parties.

Stamp Duty & Registration

Stamp Duty is the tax levied on legal documents as recompense for making them legally valid. In the state of Karnataka, maximum Stamp Duty that can be levied on any rental agreement is INR 500/-, however.

Up to 10 years – 1% of Annual Rent + Deposit

Above 10 years – 2% of annual rent + deposit

Rental Agreement Registration charges in Karnataka stand at 0.5% of Rent + Deposit. Although many people overlook the importance of paying proper stamp duty and registering the document, these factors cannot be simply ignored. If appropriate stamp Duty is not paid & if any dispute arise, parties involved may have to pay the fine on the original value as a penalty.

Likewise, not registering a document too, has harsh consequences. An unregistered rental agreement will never be accepted as primary evidence, registered rental agreements are only considered as collateral in courts.

What is the difference between first time rent agreement and renewal of rental agreement

Here are the few difference between renewal and first time rent agreement:

• Title of the agreement will change from rent agreement to renewal rent agreement.
• Agreement execution date changes to current date
• Landlord and tenant age might change by one year (This is applicable if parties age described in agreement)
• Renewal agreement commencement and end date changes
• Rent might increase around 5% – 10%.
• Security deposit will not impact/ change on renewal agreement.
• Maintenance cost of apartment society might have impact if apartment society increased the cost.
• Cost of water, parking, electricity might impact in renewal.