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Rental agreement is actually a contract between two parties. One is the owner of a property and the other one is the tenant, when he wants to have possession of the owner’s property for a certain period of time. A rental agreement is also called a rent deed or lease deed. The agreement contains the details of the property, the owner’s name and the tenant’s name, the term of the rent or lease and the monetary amount of the rent for the said period of time.

Usually most of the agreements are signed for 11 months in order to avoid stamp duty and other charges. As per the registration act, 1908 the registration of a lease agreement is essential in case of the lease term is more than 12 months. Once the agreement is registered, stamp duty and registration fee have to be paid for the same. For example, in Delhi, for a lease up to 5 years, the stamp paper value is 2% of the average annual rent. If a security deposit is a part of it, then add a fee of Rs 100. For a lease of more than 5 years and less than 10 years, the cost is 3% of the annual average rent. For a lease of more than 10 years and less than 20 years, the cost is 6% of the average annual rent. The stamp paper can be made under the name of the tenant or the landlord. Also, a registration charge of Rs 1,100 has to be paid by demand draft.

Terms commonly included in a Rent agreement

• Duration: The rent agreement will be effective for this period.

• Rent: The amount of payment made by the tenant to the landlord for the specific property.

• Lock-in period: Either party can not terminate the agreement during this lock in period. It is the minimum duration to make sure neither party changes its mind and backs out after the agreement is issued and other party faces loss. This lock in period must be specified in the agreement.

• Deposits: TThe deposit amount is required for rental agreement. The purpose of the deposit and conditions of return of the deposit after the completion of rental period is mentioned in the agreement.

• Terms of Use: The purpose of the rent of the property, terms and conditions regarding the usage of the property.

• Utilities: The utilities that are included in the rent and the utilities the tenant is responsible for.

• Insurance: If the tenant is bound to insure the property. This term is often used in commercial rental agreements.

• Repairs and Maintenance: Whether the landlord or the tenant- which party is responsible for the repairs and the maintenance of the property.

No. FSSAI Modification is applicable only for the existing Food License holders. In case of cancellation of the same, an FBO is obliged to apply again after 3 months.

In case of a change in ownership, the FBO is mandated to file an FSSAI Food License Modification too. Along with that, the FBO will need to follow the Company Registration procedure as well.

Difference between Rent/Lease vs Leave and license

Rent/Lease Agreement

• Grants exclusive possession of immovable property to tenant

• Eviction is not easily achieved

• Governed by rent control act

• Not revocable by the landlord

• Stamp duty is higher

• Creates heritable rights

• Creates property rights for tenant

• Is transferable and termination is not easy

Leave and license Agreement

• Provides only a permission to occupy a certain property

• Makes eviction easier

• Governed by Indian Contract Act

• Revocable by the landlord

• Stamp duty is lower

• Does not create heritable rights

• No property rights are created

• Is not transferable and termination is easy

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One can create rental agreement online. It is completely free of hassle and requires less time. Online rent agreement is created only by filling in the required information. Once the agreement is created it is mailed to both the parties that are the landlord and the tenant.

According to section 17 in the Registration Act 1908, it is very important to register for leases and rent of immovable property for any term beyond 1 year. Registration is not mandatory as only the stamp duty is applicable for rental agreements of less than one year.

A copy of the address proof of both the parties and witnesses is required in the process. Along with that, a copy of Aadhar card, PAN card, passbook, ration card, driving license, passport any of them can be submitted as address proof.

It is generally advised to consult a expert in regards of writing a rent agreement. Online agreement is also another area where one should take the expertise of a professional. The rent agreement should be simple, explicit and easy to understand contract and should include details regarding the deposit.

A rent agreement should be simple. It should deal with the right person and identify each party correctly. One should agree on a way to resolve disputes and spell out all the necessary details. It should also specify payment obligation.