A monthly lease is not unrelated to a 12- or 18-month long-term lease. The most important differences are the length of the tenancy agreement and when the rent is to be paid. In accordance with Section 17 of the 1908 Registration Act, leases of more than one year must be registered with local authorities. Both parties pay stamp duty and registration fees. As a general rule, the tenant must pay the additional rental fee. Data available with Makaan.com show that 21 percent of all homeowners who listed their properties for rent on the site expect their tenants to stay for at least a year. Why then are leases only signed for 11 months, one month less than one year? A tenancy agreement or lease is an important legal document that should be concluded before a landlord leases property to a tenant. The two agreements are similar, but they are not identical and it is important to understand the differences. If the agreement contains a security deposit, add Rs100 and Rs1.100 as a registration fee, bringing the total cost to Rs 6,240. The fees of lawyers or other intermediaries for all documents are not taken into account. A lease is a lease, isn`t it? For the most part, yes. Some experts reserve the term “lease” for leases of 12 months or more. At the same time, a “rental contract” refers to short-term or monthly leases.
It`s really a matter of semantics, because both month-to-month and longer-term leases will include many similar clauses, such as: not everyone is in favour of an increase in rent prices for monthly tenants. On the BiggerPockets Forum, Marcia Maynard, who, with her husband in Vancouver, Washington, owns nearly 20 residential units (houses and duplexes) says they charge the same rate, regardless of the length of the lease. They charge a collection fee to cover the rent costs. Whatever the reason, a monthly rent allows you to enjoy the benefits of renting without committing to a rent of 12 or 18 months. While this may seem like a practical option for tenants, a monthly rental contract is not for everyone. A monthly rental agreement gives flexibility to both the tenant and the landlord. In some cases, this flexibility may benefit both parties, in other cases it gives one party an advantage over the other. Now that you know the difference between a lease and a lease, you are ready to create the right contract for your needs. Use our lease form or lease template to customize, download and print the right contract online in just a few minutes. Most leases are signed for 11 months so they can avoid stamp duty and other fees. Under the Registration Act of 1908, registration of a lease is mandatory if the tenancy period is more than 12 months.
If an agreement is registered, stamp duty and registration tax must be paid. For example, in Delhi, for a lease of up to five years, stamp paper costs 2% of the total annual rent of one year. Add a flat fee of Rs100 if a security deposit is part of the agreement. For a lease of more than 5 years but less than 10 years, it represents 3% of the value of the average annual rent for a year.