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Why Rent Agreement is Made for 11 Months only?

Most of the rent agreements are signed for 11 months, as signing it for 11 months can avoid stamp duty and other fees.

What is a Rent Agreement?

A Rent Agreement is a document which defines the legal relationship between a landlord and a tenant, along with clearly stating out the obligations of the parties. The terms and conditions, as mentioned in the agreement, are binding on both the parties. 

This rent agreement comes handy and acts as a piece of evidence when a dispute crops up as respects the property between the landlord and the tenant.

Typically, rent agreements are executed for a tenure of 11 months. However, you can enter into an agreement for a longer period as well. Make sure the tenure is clearly mentioned in the agreement executed.

When to Prefer a Rent Agreement of 11 Months?

Most of the rent agreements are signed for 11 months, as signing it for 11 months can avoid stamp duty and other fees.

According to the registration act, 1908, the registration of rent agreement is mandatory if the leasing period is more than 12 months. If we register an agreement, registration fee and stamp duty need to be paid for it, so if we do it for 11 months it avoids paying stamp duty and registration charges. 

So from a monetary perspective, stretching the rent agreement beyond the 11 month span would be uneconomical and from a legal viewpoint, the entire process will be ponderous.

There is a little variation of stamp duty and registration charges in different states.

A rent agreement, if made for more than 11 months has to be registered with the local authority on an mandatory basis. The rental control laws currently prevent the landlords from overcharging the tenants and protect the tenants from sudden or unfair eviction.

Also, the right to ownership of the property gets transferred from the landlords to the tenants in case of a lease agreements, making it harder for the landlord to vacate a tenant. Hence, Landlords do not prefer to enter into rental agreements that are over 11 months.

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Note: This Post was last updated on January 23, 2023

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