Whether you are moving out of your parent’s home, settling down in a new city or looking to move to a new area, renting a home in Karnataka requires a rent agreement and registration. While it’s not a complicated process, there are steps you need to be aware and wary of so that the process is smooth and neither party feels duped.
A registered rental agreement is an official legal document that clearly states the terms and conditions to be followed by both the landlord and the tenant. Read on to find out everything you need to know about rent agreement registration in Karnataka as you look for your new rental home.
Why is rent agreement registration important?
Registration is creating a record of the agreement in the government database. In case of a dispute, only a registered agreement is admissible as evidence in court. Its authenticity is presumed unless proved otherwise, whereas a notarised agreement is inadmissible because it is very easy for either the owner or licensee to say that they have not signed it or claim the agreement is fake. This is not possible in case of a registered agreement as the photos of the people signing are also put and recorded on the agreement and in the government database.
Registration protects both parties. Firstly, it creates a record of the deposit paid. If the owner does not refund the deposit it would be difficult for the tenant to recover the money without the registered agreement. Similarly, the owner is protected by having the agreement registered as the tenant cannot exaggerate his rights. At the end of the term, if the tenant does not vacate the premises the owner can initiate legal proceedings and have the premises vacated.
What is rent agreement registration in Karnataka?
A rent agreement that is registered is an official document that outlines the relationship between a landlord or property owner and a tenant (who will be renting out the property). In this rent agreement, all the mutually agreed upon terms and conditions will be stated. It has details of both parties (landlord and tenant) as well as the responsibilities and obligations that both have agreed to adhere to.
Here are some of the essential details that are required in rental agreements to be registered in Karnataka:
- Rent to be paid monthly
- Date of monthly rent payment
- Security deposit amount
- Time period of tenancy
- Date of which the agreement is effective
- Penalty clause if there is a delay in the rent payment
- Responsibilities towards damages and repairs
- Rules on making structural changes and sub-letting
- Full names and permanent addresses of both parties: landlord and tenant
- Details on what charges for electricity, telephone, internet, etc. need to be paid by the tenant
- Details on pets whether pets are allowed
- Lock-in period
- Clauses for lease termination and extension
- Terms for rent increase upon renewal
Once the rent agreement has been drafted, it is necessary that both the landlord and the tenant read it carefully before it is signed and registered. Getting a legal professional to go over the details may also be a good idea if you are not familiar with rent agreement registration in Karnataka. Only once everything has been understood and clauses have been checked should the agreement be signed and registered.
Rent agreement registration in Karnataka stamp duty
Stamp duty is a tax to be paid for legal documents to make them legally valid. This stamp duty for the rent agreement registration in Karnataka will depend on the duration for which the rent agreement is for as well as the annual rent. The maximum stamp duty in Karnataka is Rs. 500. There is a formula to calculate stamp duty so you can estimate what you need to pay by following it.
The formula for stamp duty
The formula to calculate stamp duty is as follows:
- An agreement of 10 years: 1% of annual rent
- An agreement of 10 to 20 years: 2% of annual rent
It is mandatory to register a lease agreement in Karnataka when the duration exceeds an 11 months term. Lease agreements under 11 months may or may not be officially registered.
What is the registration procedure for rent agreement registration in Karnataka?
In order to register your rent agreement in Karnataka, you need to follow certain the steps below:
Step 1: The rental agreement has to be drafted. Both parties (the landlord and the tenant) need to analyze and agree to the agreement. It is then printed on rent agreement stamp paper of Rs. 100, which can be obtained from a legal professional, the court or a stamp vendor.
Step 2: The landlord and the tenant will then sign all the pages of the agreement. The rent agreement stamp paper will also need to be signed.
Step 3: There needs to be two witnesses to the rent agreement. The details of these witnesses need to be mentioned as well as their ID proof document. Witnesses will also have to sign the rent agreement document. Witnesses cannot be members of the landlord’s or the tenant’s family. However, friends, colleagues and others are permitted as witnesses.
Step 4: All the documents required to register the rental agreement will have to be collected to be presented.
Step 5: The property that is being rented out will fall under a particular Sub-Registrar’s jurisdiction. Either the tenant or the property owner can take an appointment at the registrar’s or sub-registrar’s office. The owner and the licensee, along with two witnesses, are to be present.
Step 6: The landlord, tenant and witnesses will have to go to that Sub-Registrar office. Photographs of all persons present and their signatures are recorded in the government database as well as attached to the agreement. The authorities examine that all the identity and address proofs are correct and the affixed photographs make it easier to trace any person who has signed.
Step 7: The document will be attested and payment needs to be made according to the registration charges applicable in Karnataka. After this, the rent agreement registration in Karnataka is complete.
What are the documents required for rent agreement registration in Karnataka?
If you are registering the rent agreement in the Sub-Registrar’s office, you will require a set of documents that will need to be attached and presented for registration. These are listed below:
- Government ID proofs of the landlord and tenant. These could be Aadhar Cards, driving licences, voter ID cards or passports.
- Property ownership proof such as registry docket or municipal tax receipt.
- 2 passport-size photographs each of the landlord and the tenant.
- Two witnesses are required to be there to sign the agreement, along with their ID proof.
Terms to include in the draft of your rent agreement registration in Karnataka
Rent agreement registration in Karnataka is an important legal document, and that is why it is necessary to add a few essential terms that will mutually benefit the landlord and the tenant in case of a dispute.
1. Rent
The amount of rent that has to be paid each month needs to be included in the rent agreement. It should also mention the date during which the rent is due to be paid – for example, during the first week of the month. Any penalty for the tenant in case they default on paying the rent also needs to be added to the agreement. The mode of payment of the rent can also be included.
2. Security deposit
The rent agreement needs to state the amount of security deposit the tenant has given the landlord. To avoid future legal discord between the landlord and tenant, care needs to be taken to include all the details regarding the security deposit.
The landlord takes a security deposit to guard against the possibility of a tenant leaving without making the required payments. The rent agreement needs to specify when the landlord can make deductions from the security deposit and for what reasons.
The landlord is required to return the security deposit in a certain time period which should be in the agreement. It should also state the way in which it will be given back to the tenant once the lease ends.
3. Lock-In term
During the ‘lock-in period’, the landlord and the tenant cannot terminate the rental agreement. If the landlord or the tenant terminates the agreement within this time period, they will have to pay the rent for the remaining period.
4. Name of all tenants
The full names of all the adult tenants occupying the property need to be stated in the rent agreement. Signatures are also needed in the rent agreement. This is to ensure that all adult tenants of the house are accountable to follow the stated terms and conditions of the rent contract.
5. Occupancy limit
Occupancy limit refers to the maximum number of individuals who are allowed to reside in a property as tenants. This clause protects the landlord against too many people living on their property. For example, if the tenant sublets the home or moves in family or friends (who are not on the lease) permanently into the home, the landlord has the right to evict them with this clause.
6. Tenancy duration
The time period of the tenancy will be stated in the rent agreement. This tenancy duration can vary from months to years and depends on what has been discussed between the landlord and the tenant.
7. Repair and maintenance
There need to be clear outlines of the responsibilities of the landlord and the tenant regarding the upkeep and repairs of the home. The role of the landlord and tenant regarding the maintenance should be stated clearly in the agreement so that, if something is to break or get damaged, there is no hassle in deciding which party needs to take on the responsibility.
8. Electricity and water bills
The rental agreement has to state which party will make payments for the monthly water and electricity bills of the property. In some cases, the tenant is required to give the landlord receipts for the bills. If this is the case, it should be mentioned in the clause.
9. Pet policies
If a landlord wishes to not have pets on their property, they need to mention it in a clause in the rent agreement. Whether or not pets are allowed in a residence is a big deal for pet-owning renters so this should be discussed with all potential renters beforehand.
10. Other restrictions
If there are any other restrictions that the landlord has regarding the property they are renting out, they should be stated in the rent agreement. This can be with regard to subletting, illegal activities, the use of parking spaces, and the amount of access the landlord has to the property.