What is lease deed? Meaning, Required Documents and Registration process!
When a person acquires possession of property & gets its enjoyment rights in exchange for consideration with the actual owner, the property is said to be leased.
When a property is given on lease, it means that the tenant or the lessee can use the property for a fixed period of time for which they would be required to pay a fixed amount of rent. In this article, we’ll discuss the meaning of lease, documents required for a lease deed & key contents of it.
What is a Lease Deed?
A lease deed is a legal document outlining the terms and conditions between a landlord and tenant for the rental of property. It specifies the lease period, rental amount, security deposit, maintenance responsibilities, and other essential clauses. Understanding the lease deed meaning is crucial for both parties to ensure clarity and prevent disputes. Proper registration of a lease deed requires submitting specific documents, including identification proofs, property details, and the deed itself, to the relevant authorities.
Essential contents include in a Lease Deed
A lease deed outlines crucial terms between a landlord and tenant, ensuring clarity and legal compliance. Key contents include the lease duration, rent amount, security deposit, maintenance responsibilities, and termination clauses.
Document required for registration of lease deed
To register a lease deed, specific documents are necessary to ensure legal validity and compliance. These typically include the lease deed itself, identification proofs of both parties, proof of property ownership, address proof, and recent passport-sized photographs.
For the registration of a residential lease deed, a comprehensive set of documents is necessary to ensure legal compliance and smooth processing. The essential documents include:
- Lease Deed: The original lease deed, duly signed by both parties.
- Identification Proofs: Valid ID proofs such as Aadhaar card, PAN card, or passport of both the landlord and tenant.
- Proof of Property Ownership: Documents verifying the landlord’s ownership of the property, such as the sale deed or title deed.
- Address Proof: Current address proofs of both the landlord and tenant, like utility bills or rental agreements.
- Photographs: Recent passport-sized photographs of both parties.
- No Objection Certificate (NOC): If applicable, a NOC from the housing society or relevant authority.
Is Registration of lease deed mandatory?
Yes, the registration of a lease deed is mandatory if the lease period exceeds 12 months. This legal requirement ensures that the lease agreement is officially recognized and protects the rights of both the landlord and tenant. Unregistered lease deeds are not admissible as evidence in court, making registration crucial for legal enforceability and avoiding potential disputes.
Difference between lease deed and lease agreement
A lease deed is a formal, legally binding document that outlines the terms of a property lease and requires registration, especially if the lease term exceeds 12 months. A lease agreement, however, is a less formal contract that may not require registration and typically covers shorter lease periods. The primary distinction lies in their legal enforceability and the necessity for registration to be legally binding.
Why lease deeds are for 99 years?
Lease deeds are commonly set for 99 years to balance long-term tenure with flexibility for future changes. This duration provides lessees with significant security and investment return while ensuring that lessors retain eventual control over the property. Additionally, the 99-year term avoids the complexities associated with perpetual leases, making legal and financial management simpler for both parties.
Stamp Duty on Lease deed
Stamp duty on a lease deed is a tax imposed by the government on the execution of the lease agreement. The amount varies depending on the lease term, property value, and state regulations. Generally, it is calculated as a percentage of the total lease amount, ensuring the lease is legally recognized and enforceable. Proper payment of stamp duty is crucial for the validity of the lease deed.
Finally
When the lease deed is drafted for the Property in Mumbai or any other locations in India, it needs to be registered with the Registrar of the district in which the property is located. A lease deed is registered only after paying the requisite stamp duty, which varies from state to state. Thus, after the registration of the lease deed, it finally becomes legally binding on the parties.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
