Lease Agreement Drafting

The term lease of immovable property has been defined under section 105 of the Transfer of Property Act, 1882 as the transfer of right to enjoy the property for a specific period to the transferor by the transferee.

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A lease agreement is a contract wherein the terms of renting the property to one party by the owner are outlined. This agreement bounds the lessee to pay the periodic rent in exchange for property to the landlord. A lease agreement plays a vital role in the maintenance of the relationship between the lessor and lessee. This document lays down the provisions that bound both parties legally.

How To Apply

There are 7 Steps to complete a Lease Agreement

  1. Draft and Outline a Lease agreement with the details of the terms agreed upon by the Landlord and the Tenant.
  2. Print the agreement after crosschecking with the Tenant and Landlord for any additional terms.
  3. Sign the agreement along with Thumb impression, Photo, and PAN card details.
  4. The sign of two witnesses is required at the time of registration.
  5. Submit the agreement to the Sub Registrars Office.
  6. Pay the Stamp duty and Registration fees as applicable.
  7. Register the agreement by providing Biometrics at the Sub Registrars Office.

Key Requirements

The lease agreement needs to cover the basic terms of tenancy:

1) Names of all the tenants: this makes each lessee responsible for all the terms of the agreement including the full amount of rent and proper use of the property.

2) Limit on Occupancy: The lease agreement must restrict the occupancy to the lessee and their minor kids only. This clause prevents subletting or allowing friends or relatives to live in the rented property without the permission of the owner.

3) Term of tenancy or period of tenancy: Rental agreements run on, month to month basis, however, lease agreement last at least for a year. Thus, the period of occupancy or term of the stay must be mentioned.

4) Amount of Rent: the exact amount of rent along with the time and method of payment must be mentioned in the lease agreement.

5) Security Deposit: the major reason of conflict under the lease is the use and return of the deposit. Thus, to avoid any fiction a lease agreement must specifically mention the limit, use, and return of security deposit including situations when security deposit can be held or liability of payment of interest on security deposit by, the landlord to the tenant.

6) Repair and Maintenance: The lease agreement must contain a provision specifying the responsibility of both lessor and lessee in respect of maintenance and repair of premises.

7) Entry to the property: lease Agreement must contain a clause in respect of time and situation when the lessor can enter the leased property.

8) Bar on Illegal Activity: the lease agreement must also clearly specify that tenant is not allowed to carry out any, illegal activity in the premises.

Other clauses that might be added in the lease agreement are as follows:

1)  Provisions concerning the renewal of lease agreement.

2) If the tenant is allowed to sublet the leased premises, the terms of subletting must be mentioned.

3) The terms concerning parking rules and restrictions attached to the leased property must be mentioned.

4) The termination clause containing all the situations when a landlord can terminate the lease might also be mentioned.

5) A provision concerning dispute resolution if any cause of action arises might also be mentioned.

6) Provisions concerning the revision of rent should also be mentioned in the lease agreement.

The lease agreement demarcates the obligation, responsibilities, and rights of both the lessor and lessee. Primarily a lawyer is not required to frame the agreement, the parties can frame the agreement and can get it registered with the registrar. However, a lawyer can be of help to make sure the interest of both the parties is taken care of.

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