Renting out your property is one of the best ways to earn a lucrative income in a passive and fuss-free manner. However, it’s important for you as a homeowner and renter to be aware of the stamp duty and registration laws that are in place to protect the rights and interests of all stakeholders. These laws vary from state to state, and it’s essential for you to stay updated on them.
Here are the registration laws for renting property in Pune and elsewhere in the state of Maharashtra:
- According to Section 17 of the Indian Registration Act, every rental agreement for any kind of immovable property, the tenure of which is 12 months or more, requires to be registered. This is mandatory, and Section 17 applies to all of India, unless the state in which the property is located has a different specification.
- In the state of Maharashtra, the renting law is more stringent. According to Section 55 of the Maharashtra Rent Control Act, 1999, an agreement of tenancy or a leave and license agreement must be made in writing and it is mandatory for the agreement to be registered—no matter what the tenure of the tenancy is. In Maharashtra, the rule pertaining to the minimum tenure of 12 months is not applicable.
- The responsibility of registering the rent agreement rests entirely with the landlord. In case the landlord fails to have the agreement registered, s/he is liable to pay a penalty of Rs. 5,000 and could be subject to up to three months of imprisonment.
- In the absence of a registered rent agreement, the tenant will be favored in case a dispute arises between the two parties. The terms and conditions of the agreement as contended by the tenant will be taken as the truth on account of which the property was rented out. It is therefore in the interest of the landlord to register the rent agreement.
- Within the state of Maharashtra, the registration fee for the rental agreement varies depending on the location of the property. If the property is situated within the purview of any municipal corporation area, the registration fee is Rs. 1,000. If it is located in a rural area, the fee is Rs. 500. In the absence of any agreement to the contrary, the cost of stamp duty and registration is to be borne by the tenant.
- The requirements for the registration of the agreement include identify proof (like Aadhar or PAN Card) of the tenant, landlord and witnesses, and other related documents like property documents (like Index II or tax receipt of the property being leased), electricity bills and passport-size photographs of the concerned parties.
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