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Registration of Lease Deed | Lease Agreement Registration in Delhi | Contract of Leas...

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Registration of Lease Deed / Lease Agreement

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A Lease Deed or a Lease Agreement contains a contractual arrangement calling for the lessee (tenant) to pay the lessor (landlord) periodic rent for use the of an immoveable property. According to Section 105 of the Transfer of Property Act, 1872, a lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent. A lease of an immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument. All other lease of an immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immovable property is made by a registered instrument, such instrument shall be executed by both the lessor and the lessee.

Important Clauses in a Lease Agreement: Some of the common points that are to be considered while drafting a Lease Deed / Lease Agreement are as follows: Description of the Parties to the lease Term of the Lease Monthly Rent payable Date and mode by which the rent is payable Purpose of lease whether for residential or commercial purpose Security deposit and the interest to be paid on it, if any Additional Facilities provided by the Lessor Monthly maintenance charges and who bears it Other charges such as tax and parking fee, and who pays them Access to common terrace and common areas Whether the lessee can sub-lease Indemnity Provisions Grounds for termination of the agreement Fixtures and fittings provided by the lessor and their maintenance


Registration of Lease Deed | Lease Agreement Registration in Delhi | Contract of Leas... Page 2 of 2

Rent escalation clause specifying when the rent can be increased and at what rate Who will bear the routine repair and maintenance expenses of the house - both minor and major repairs In case the lease deed needs to be registered, distribution of the stamp duty and registration expenses Notice period that needs to be given by either party to terminate the lease

Some important Judgements

It was held in Nilkantha Pati v. Khitish Chandra, (1951) AIR Cal 338, that where the lessee loses possession of any portion of the property due to any act or default on part of the lessor, the lessee can suspend payment of rent till restoration of the possession. The Supreme Court held in Dashrath v. Kashinath, (1993) AIR SC 2646, that where the premises were used by the tenant for doing business of a different kind from what was permitted under the lease agreement, in violation of the conditions of the lease, the tenant was liable to be evicted on that ground.

Important points to note in relation to registration of Lease Agreement / Lease Deed in Delhi are : 1. Stamp duty is payable @ 2% of the average annual rent in the case of a lease agreement for a term upto 5 years and @ 3% of the average annual rent in case of a lease agreement for a term greater than 5 years, but upto 10 years. 2. Registration fee is payable @ Rs.1,100/- through a Bank Pay order. 3. Both the Lessor / Landlord(s) and Lessee / Tenant(s) have to present themselves before the Sub Registrar for the execution and registration of the Lease Agreement alongwith their two passport size photographs and identification documents i.e. Aadhar Card . 4. The Presence of two witnesses alongwith identification documents i.e. Aadhar Card is also required in the Sub Registrar Office for the Registration of Lease Deed / Lease Agreement.

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