Do I Need to Register Rent Agreement for Less Than 12 Months

Section 17 of Registration Act, 1908 makes it compulsory to register Lease/Rent Agreement for duration equal to or more than 12 months.

What about Lease/Rent Agreement for less than one year ? Does a Lease/Rent Agreement for duration less than 12 months need not be registered ? Is it sufficient to affix a stamp paper of value of Rs 100 or Rs 200 of such Lease/Rent Agreement of duration less than 12 months ?

The law is very clear on these aspects. As long as the appropriate stamp duty normally calculated 2-4% percent (vary as per state) of consideration value i.e monthly rent times the number of months (for period less than 12 months) is paid and the correct Stamp Paper is affixed on such Lease/Rent Agreement, it is not mandatory to get the same registered at the office of the Sub Registrar. Such Stamp Duty Percentage Rates may vary from state to state and for some states a small fraction of security deposit is also to be added in  requisite stamp duty value.

Is it necessary to pay the correct stamp duty for Lease/Rent Agreement less than 12 months?

Absolutely yes, insufficient application of stamp duty, even on Lease/Rent Agreement for less than 12 months may not only invalidate execution of such Lease/Rent Agreement, but put both the Landlord (Lessor) and tenant (Lessee) at risk of losing their rights, but can also attract penalty of up to 10 times the value of appropriate stamp duty.

Sounds complicated so how do I ensure that I am on the right side of the law and my rights as a Landlord or Tenant stay protected?

IOUX can offer one stop solution for these issues.. IOUX, which is a part of Registered Financial Institution makes it extremely easy for users by auto calculating the requisite stamp duty payable for your Lease/Rent Agreement. IOUX also offers the facility to make online payments towards such cost.

But even before that IOUX helps you to begin your e document journey for Online Lease/Rent Agreement by offering its users authenticated drafts or templates for Lease/Rent Agreement, which are customisable and can be approved by both the parties online. IOUX is an Application Service Provider (ASP) of NSDL e Gov and can carry out online eKYC for both the parties within minutes and both landlord and tenant can online execute Lease/Rent Agreement by e signing based on Aadhar OTP verification as provisioned by NSDL e Gov from the comfort of their homes, offices without the need of hardware or USB tokens and by simply using their computer or mobile phones. Users can also add ‘Witness’ who can also esign on any Agreement.

Any Aadhaar holder can execute a valid Lease or Rent Agreement online by e signing over IOUX after One Time Password (OTP) authentication thus requiring no paper based application form or documents. Authentication of the signer is carried out by the e-KYC services of UIDAI through NSDL e-Governance Infrastructure Limited (NSDL e-Gov) and on successful authentication i.e., only after receiving the consent from the signer, electronic signature on the document/data is ascribed through NSDL e-Gov.

Such online executed Lease/Rent Agreement which is e Signed & time stamped with adequate application of Stamp Duty is 100% legal as per Section 5 of the Information Technology Act, 2000.

Download IOUX Mobile App to avail this facility today.