Actually, under Section 17 of the Registration Act, 1908, there is no mention anywhere that the rent agreement will be made only for 11 months. Actually, the landlord and tenant make an agreement for less than 12 months so that it can be made without any problem. This saves both the parties from the hassle of getting the documents registered at the sub-registrar’s office. Stamp duty for a rent agreement for 11 months is less, whereas for a rent agreement for a longer period, you will have to pay more stamp duty. Therefore, both the parties make an agreement for 11 months only.
What are the basic rights of tenants, how much can landlords increase the rent every year?
No landlord can deny essential services like electricity, water etc. to his tenant. As far as increasing the fare every year is concerned, it is as per the rules of the local states. For example, if you are in Maharashtra, then under the Maharashtra Rent Control Act 1999, the landlord has the right to increase the rent by 4% every year. It should also be mentioned here that the tenant has to pay standard rent. If the landlord makes some changes to the house or changes its structure, he can increase the rent beyond the standard of 4% and it can go up to 25%.
How beneficial is it to stay on rent for a long time?
If both the parties agree to this then the landlord and tenant can make a long term agreement. If the tenant wants to stay for 5 years, then the rent agreement should be registered keeping in mind his rights. If things are done only through a notary, then despite the term of 5 years, the landlord can evict the tenant by giving one month’s notice without giving any reason.
Who benefits from 11 month contract?
An 11 month rent agreement gives the landlord an advantage when it comes to canceling the agreement. This gives the landlord an opportunity to increase the rent. Actually, to avoid any dispute, landlords make rent agreements only for short periods. As far as legal point of view is concerned, the rent agreement cannot be kept as evidence in the court. In such a situation, the tenant cannot present the unregistered rent agreement as his right.