A rental agreement is a written document between the landlord and the tenant, which specifies the arrangement for living on rent based on the fixed period and conditions. Usually this agreement is made for 11 months only.
The reason for this is that according to Section 17 (D) of the Indian Registration Act, 1908, registration of a rent agreement of less than one year is not mandatory. Due to this rule, the landlord avoids additional stamp duty and registration charges. Apart from this, a short agreement also protects them from legal disputes,
Because a long-term lease can sometimes give unnecessary rights to the tenant. After 11 months, this agreement is renewed again, so that the owner retains control over his property and also maintains a clear relationship with the tenant.
Why is the agreement only for 11 months ?
Legally, it is mandatory to pay stamp duty and registration charges on rental agreements for a period of 12 months or more. Many people opt for 11-month agreements to avoid this additional expense. Also, since most laws favor the tenant, landlords may find it difficult to evict a long-term tenant.
What is the value of rent agreement in court ?
Usually, an 11-month agreement made on a stamp paper of Rs 100 or Rs 200 has no solid legal validity. This document is only a means of fulfilling formalities and proves to be more secure for the owner. This document does not provide very strong protection to the tenant in case of a dispute.
Renewal is necessary to avoid seizure
According to the Transfer of Property Act, if a person maintains adverse possession of a property for 12 years, he can claim rights over the property. To avoid this risk, renewal of the rent agreement every year is considered necessary. By renewing it from time to time, property owners can maintain control over their property.
What happens in case of a dispute ?
Under the Rent Tenancy Act, the court has the power to fix the rent and change the terms in case of a dispute between the landlord and the tenant. The landlord cannot increase the rent arbitrarily, while the tenant also has no permanent right over the property except in certain circumstances where a claim can be made if the possession is continued for a long time.
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