In this article, we will learn how to make an online rent agreement in Maharashtra. The process will be explained in a step-wise manner along with the clauses
A Stepwise Guide for Rent Agreement in Maharashtra provides instructions for creating a seamless online rental agreement covering registration processes, key clauses like rent and deposit, mandatory documents, stamp duty, and registration fees, ensuring legality and clarity between landlord and tenant.
It is a document that contains essential terms and conditions that the tenant and the landlord have mutually agreed upon. The tenant must be registered under the Maharashtra State Rental Management Act 1999’s Section 55. Generally, a lease is either a notarised contract or a registration contract.
The notary’s consent form is printed on the stamped document and duly signed by a lawyer. However, a notarised agreement cannot be presented in court in a dispute. It only helps to check the document. On the contrary, the itemized contract is printed on stamp paper and registered with the sub-registrar. This registered rental contract is stored in the state record and can be easily looked up online. In addition, it can be valid evidence in proceedings. Hence, it is advisable to register the lease with your local registration office.
Detailed Information about the Online Agreement for Rent
Maharashtra IGR has launched a new initiative for electronic resignation of Leave and Licensing agreements. This process of registering a leave and license agreement when the lease agreement is completed can be done online in the Maharashtra department for leave and license registration. This is an Aadhaar-based system.
Stepwise Guide for Rent Agreement in Maharashtra
Registering a lease or leave and license agreement online in Maharashtra is a simple three-step process.
Step 1. Create and freeze a lease. (1st or same-day)
Step 2. Aadhar-based biometrics verification (1 day or same-day)
Step 3. Registration stamp and delivery.
First Steps to Registering an Online Rental Agreement
Creating a rental contract is a very important step. Many important provisions need to be considered when drafting.
Clause 1: Landlord and tenant details.
When drafting, you must specify the landlord, tenant, and national identity period. The rental agreement must include the landlord’s and tenant’s Aadhar and PAN card and your home address. The details of the tenant are as follows;
Clause 2: Rent.
The second most crucial clause is monthly rent. The amount of monthly rent must be explicitly stated in rupees. Many forget to mention this clause and discuss whether the rent is prepaid or postpaid.
Clause 3: After specifying the rent, the security deposit must be defined as 1
The tenant pays a security deposit to the landlord. There are two types of deposits. The first type of deposit is a refundable deposit. The refundable deposit will be refunded after 20 hours of rental. This deposit will be deducted in proportion to the damage if the tenant causes more damage than usual. The refundable deposit paid by the tenant to the property depends on the contract period.
The security deposit is usually 2 to 10 times the monthly rent. The average and median security deposits are five times the rents in the Mumbai and Pune regions. The second type of deposit is a non-refundable deposit. This deposit is non-refundable after the term expires. This type of non-refundable deposit is usually part of a commercial lease.
Clause 4: The lease term
It is the specified term of the lease or leaves and license agreement. Generally, the term for drafting a leave and license agreement is 11 months. If the lease term is longer than 11 months, you must include variable rent in the contract. For example, suppose your contract period is 22 months. In that case, the rent for the first 11 months is 20000 and the rent for the next 11 months usually has a predefined rent increase. Rent increases range from 5% to 10%. The rent for the next 11 months will be ₹21000 or ₹22000, which must be negotiated before reaching an agreement.
Clause 5: Maintenance costs
It is necessary to explicitly state who will pay the maintenance and incidental costs of the company. Utility bills cover electricity, water, clubhouse, and security.
Clause 6: Notification and Cancellation Period
It is essential to discuss the notification period and cancellation process. The notification period is usually 10% of the total term. For 11 months, the notification period is usually one month. Both parties may terminate the contract within 11 months with one month’s notice.
Clause 7: Termination
This is the most important clause regarding the termination of the contract. Neither party can cancel or cancel the rental agreement during the lockup period. If any party terminates the contract during the pending period, a given penalty will be imposed on that party. Be careful when setting the lock-in period.
Clause 8: Rules & Responsibilities
The license agreement for the rental agreement must also include the landlord’s agent, who is the licensor antenna. This is the licensee’s agent. Pay attention to the responsibilities and actions of landlords and tenants regarding interim financial management, property management, and the behavior of society as a whole. Additionally, the agreement should adhere to the 11-month rent agreement rules to ensure compliance and clarity for both parties.
Clause 9: Extra Clauses
Many other processes may be mentioned in other class rental agreements. Eating preferences and parking lot are stated in the rental agreement.
Step 2 of the process is Biometric verification.
Previously, both parties had to go to a local sub-registration office to review and sign the document before the sub-registration. In the age of digital India, you can use your Aadhar card to sign documents. A party’s Aadhar card is verified using biometrics, each party’s finger matches the data on the Aadhar card, and the Aadhar authorities confirm that party’s verification. Aadhaar is required for registration. If one party does not have an Aadhar card, the party will need to visit the sub-register to prove the identity.
Biometrics can be performed from anywhere in the world.
NRI Biometrics: There is a unique service for NRI to facilitate the rental of legal documents. Biometric devices are delivered by courier anywhere globally and provide technical support to configure biometric devices and perform biometrics based on Aadhar.
Many landlords grant power of attorney for leave and license operations. In a nutshell, a power of attorney is an instrument that gives certain rights to a correlating lawyer or a third-party service provider for the maintenance and care of the property. A power of attorney must include a property description, a written request for leave, and a license agreement. You are covered regardless of where you are in the world and need an agreement for rent registered by legal documents. One can also opt for legal advice before signing the documents.
Step 3: Registration process and email
Once the biometrics for the rent or leave and license agreement registration are generated, they will be sent to the sub-registry for approval and the appropriate stamp duty and registration fee. They check the authenticity of biometrics and pay stamp duty. A formal signed and stamped rental agreement will be emailed to you if all goes well. The registration feature is online, so no physical copy of the registered document is made.
After electronic registration of leave and license agreements, you also need to perform police verification of the tenant, also known as a police check. Police reports are a mandatory step for tenants to move to new facilities.
The motive behind police information is the two-hour local police that these new people are placed under their jurisdiction. Police information will help reveal criminal activity in the area. Police tips and police checks can help you find out that you have ten landlords. In addition, it allows the tenant to seek help from the police in an emergency.
Stamp Duty and Registration Charges
When it comes to rental agreements, stamp duty is calculated based on the net rental earnings of the landlord. The formula is: Stamp Duty = 0.25% X [Monthly Rent X Loan Tenure + 10% of Refundable Deposits]. For instance, with a monthly rate of ₹ 15,000, a loan tenure of 1 year, and a refundable deposit of ₹ 50,000, the Stamp Duty would be ₹ 462.00.
As for registration fees in Maharashtra, it’s ₹ 1000 for properties in Municipal Areas and ₹ 500 in rural areas. Typically, these charges are shared between both parties involved in the rental agreement, ensuring a fair distribution of financial responsibilities.
Rental Agreement in Maharashtra: Documents Required
Rent agreement registration in Maharashtra can be done through both online and offline methods. Opting for the online process is not only more convenient but also saves time and money that would be spent on travelling. It is a reliable and transparent way to complete the registration process.
For online registration, you’ll need the following documents and setup:
- Biometric device
- Webcam
- Google Chrome or Microsoft Edge browser
- Aadhaar number of all the parties involved, along with their identifier
- PAN card number of the landlord
- Address of the property
Process To Register a Rent Agreement in Maharashtra Online
Stage 1: Calculate Applicable Stamp Duty & Registration Fees
To begin, visit (efilingigr.maharashtra.gov.in/ereg/) and click on the Calculate Stamp Duty And Registration Charges tab. Fill in details like License Period, Refundable Deposit, Non-Refundable Deposit, Average Monthly Rent, and click on Calculate Stamp Duty. Note down the charges for the next step.
Stage 2: Make The Payment on the GRAS Portal
Visit (gras.mahakosh.gov.in/echallan) and click on the Inspector General tab. Choose ‘Pay without Registration’ and select ‘Make Payment To Register Your Document.’ Fill in the details, choose the Stamp Duty and Registration Fees Together option, and make the payment through E-payment, Bank Counter, or SBI Payment Gateway. Note the GRN Number for reference.
Stage 3: Drafting The Rental Agreement
Go to (efilingigr.maharashtra.gov.in/ereg/) and select the district. Create a new password, fill in property details, and note the Token Number. Add owner and tenant details, witnesses, and party identifiers. Fill in rent and other terms, add the GRN Number from Stage 2, and verify it. Mention terms and conditions, lock-in period, furniture details, and save the draft document.
Stage 4: Executing The Rental Agreement
After confirming the draft, click on Execute. Capture thumb impressions and photos for the owner, tenant, and witnesses. Complete eKYC verification with Aadhar. Verify thumb impressions and UID number. After Aadhar verification, the draft will be displayed for execution.
Stage 5: Police Verification
Click on Police Verification, fill in tenant details, select the nearby police station, and upload address proof. Save the details, view the PDF, and submit without a digital signature.
Stage 6: Check The Status
To check the status, visit (efilingigr.maharashtra.gov.in/ereg/), enter Token Number & Password, and click on View Status. If registered, download the PDF document.
Why Register The Rental Agreement?
Registering your rental agreement transforms it into an authentic document, crucial in the event of any disputes. This registered document holds legal weight and is admissible in court proceedings, providing a solid foundation for resolving conflicts.
Online registration ensures that the agreement is securely stored in the government database. Additionally, a unique registration number is assigned, offering a convenient reference point for future use.
This means that, post-registration, your rental agreement becomes easily accessible, streamlining any potential legal actions or reference needs that may arise over time. Registering not only safeguards your interests but also contributes to a transparent and accountable rental process.
Importance of Online Rent Agreement Registration
- A registered rent agreement is legally recognised and provides protection to both parties in case of disputes
- It serves as concrete evidence of the terms and conditions agreed upon by the landlord and tenant, preventing misunderstandings or misinterpretations
- Registration ensures that tenants’ rights are safeguarded against arbitrary eviction or unreasonable rent hikes
- It facilitates smooth financial transactions, such as rent payments and security deposit refunds, by providing a clear contractual framework
- Many states in India mandate the registration of rent agreements. Non-registration can lead to legal consequences and penalties
- Having a registered agreement helps in creating a documented record of the rental arrangement, which can be useful for various purposes like obtaining loans or filing taxes
- Both parties benefit from peace of mind knowing that their rights and obligations are clearly defined and legally enforceable.
Common Mistakes to Avoid in a Rental Agreement
When drafting a rental agreement, it’s crucial to avoid common pitfalls that can lead to legal disputes and complications. A well-structured agreement clearly outlines the terms and conditions, protecting both landlords and tenants. here are some common mistakes to avoid in a Rental Agreement :
Accurate Identification: Ensure tenant names match their legal documents (e.g., driver’s license, passport) to avoid disputes.
Essential Guidelines and Eviction Terms: Clearly state permissible activities and potential eviction triggers (e.g., non-payment of rent, illegal activities). Include notice periods for eviction.
Understanding Lock-In and Notice Periods: Specify a lock-in period during which tenants cannot terminate the agreement and outline the notice period required for vacating to prevent loss of rental income.
Payment Terms: Detail the rent amount, payment due dates, covered costs, maintenance responsibilities, grace periods, payment methods, and penalties for late payments.
Repair Responsibilities: Define who handles minor and major repairs to avoid disputes over maintenance responsibilities.
Controlling Tenant Subletting: Prohibit subletting without permission to maintain control over the property and prevent unauthorised use or damage.
Power of Attorney (POA) Details: Include details of the owner and their POA (if applicable) to ensure the agreement is valid, especially if the owner is absent.
Tailoring Miscellaneous Clauses: Add unique clauses to address specific needs, such as notice periods or maintenance responsibilities, to protect the owner’s interests.
Rule Out Rent Conflicts: Clearly state the rent amount, frequency, and conditions for future increases to avoid disputes over unexpected rent hikes
Providing Permanent Address Details: Include permanent addresses for both landlord and tenant for background verification and emergency contact purposes.
What is the Duration of The Rental Agreement?
The duration of a rental agreement can extend up to 5 years, providing flexibility for both landlords and tenants. However, it’s crucial to note that if the rental or lease period exceeds 11 months, registering the agreement becomes necessary, attracting stamp duty and registration charges.
While some opt for an 11-month duration to avoid these charges, it’s essential to understand that this isn’t mandatory. In fact, longer-duration agreements, beyond the 11-month norm, can offer benefits for both landlords and tenants. These extended agreements provide stability and security, fostering a more enduring and mutually beneficial relationship between the parties involved.
Conclusion:-
In this article, we have explained all the steps required in the process of an agreement for rent and also stated the clauses under which the agreement for rent is made. Both parties need to discuss the agreement before the total and final output to avoid any sort of miscommunication in the future.
FAQs
What are the rules for rent agreement in Maharashtra?
Rules for a rent agreement in Maharashtra include specifying details like rent amount, tenancy duration, and responsibilities of both parties. Stamp duty and registration charges apply. Additionally, including tenant and landlord details with proper documentation is crucial to ensure a legally binding and transparent agreement.
Is it necessary to register an 11 months agreement in Maharashtra?
Yes, it is necessary to register an 11-month rent agreement in Maharashtra if the lease period exceeds 11 months. Registration becomes mandatory to comply with legal requirements. While many opt for shorter durations to avoid stamp duty and registration charges, longer-term agreements provide stability and legal validity.
How to start a rent agreement business in Maharashtra?
To start a rent agreement business in Maharashtra, familiarise yourself with the state's tenancy laws. Establish a legal entity, create standard agreement templates, and ensure compliance with stamp duty and registration regulations. Offering online registration services and providing clear guidance on the process can make your business more accessible and efficient.
What is the cost of a registered rent agreement in Maharashtra?
The cost of a registered rent agreement in Maharashtra depends on factors like the rental amount, lease duration, and property location. Stamp duty charges and registration fees apply. On average, expenses range from ₹ 500 to ₹ 2,000. Consulting with legal professionals or online platforms can help determine the specific costs for your unique agreement.
The stamp duty for a rent agreement in Maharashtra is calculated based on the annual rent, lease duration, and location of the property. The formula to calculate stamp duty on rental agreement is 0.25% x D, where D is (Monthly rental x No of months) + (Advance rent for the period/non-refundable deposit)+ (10% x Refundable deposit x No of years of the agreement).
Can I register a rent agreement online in Maharashtra from outside India?
Yes, you can register a rent agreement online in Maharashtra even if you are outside India. The Maharashtra government offers an online registration portal for rent agreements, which allows landlords and tenants to complete the registration process remotely. Digital signatures and uploading required documents are typically part of the process.
What happens if a rent agreement is not registered in Maharashtra?
If a rent agreement is not registered in Maharashtra, it becomes invalid as evidence in legal disputes. Both the landlord and tenant lose legal protections and rights guaranteed under the Maharashtra Rent Control Act,1999. Additionally, non-registration can lead to difficulties in proving tenancy, affecting tenant rights such as security deposit refunds and tenancy durations. It's essential to comply with registration requirements to avoid legal complications.
