Why Rent Agreement is necessary in Punjab
Regardless of the State, a rental agreement is a legally binding contract between the landlord and tenant. But the Indian Contract Act distinguishes between the lease of a property and a contract of hire and services. According to the Indian Contract Act, a rent agreement is only an obligation to pay a sum of money for use and enjoyment of a certain benefit. A rent agreement therefore is a deed that protects both the parties (landlord as well as tenant) as it creates obligations and also gives the contractual right to sue the other party in case of breach of those obligations. In the absence of a rent agreement , there are various disputes that can arise between a landlord and tenant which can be frustrating for both and often lead to legal suits. Here are some common causes of disputes: Therefore, having a rent agreement is extremely crucial for both landlords and tenants as by virtue of a rent agreement all disputes can be resolved amicably without visiting Court.
Essential Clause of a Punjab Rent Agreement
Rent agreements in Punjab include vital elements to ensure both parties understand their role. Specific terms make it easier to identify the obligations. Parties are defined, and responsibilities are outlined in a Punjab rent agreement. The tenant agrees to pay rent at a defined interval. Living in the premises allows the landlord to generate income.
Parties Section:
In addition to identifying the landlord and tenant, the property is defined by specifics such as size, location in the city, and other factors. The agreement will describe the person making payments to the landlord. The lease agreement should be signed by all parties to the agreement. Parties can be listed as their legal name or as a Company under the Companies Act.
Rental Terms:
The Punjab rental agreement defines the term of use for the tenant. It describes the start date and duration of the agreement. A Punjab rental agreement typically is for 11 months. Renewal and extensions of the rental agreement are also included. The document will specify if the landlord or tenant has the right to extend the agreement.
Lease Amount:
Stating the rental amount within the Punjab rent agreement is critical. The specifics include the rent due date. A provision may be included for a monthly rent increase in the Punjab rental agreement. The document will specify how payment is to be made and to whom. The security deposit, if applicable is also covered under the lease agreement.
Responsibilities:
The rest of the Punjab rental agreement should define the responsibilities of both the tenant and landlord. Utility payments may be defined by the agreement. The Punjab rent agreement will address any restrictions or prohibitions.
Relying on Punjab rent agreement formats PDF provides a thorough version. The PDF Punjab rent agreement format is available from Online Legal India.
Drafting of Rent Agreement in Punjab
The process of drafting a rent agreement in Punjab is much similar to that of the ones in the other states of India. First and foremost, the landlord and tenant should mutually agree upon the format of the rent agreement. Once agreed upon, the efforts of drafting a rent agreement in Punjab are pretty much negligible. The standard practices make it really easy for parties entering in lease agreement to either draft the rent agreement manually or use an editable soft copy. A rental deed may also be executed subject to stamping and registration. Alternatively, a rental agreement can be awarded by the parties on plain paper.
While drafting a rent agreement in Punjab, there are a few legal considerations that must be kept in mind. For instance, a rental agreement is not a deed of sale despite the powers of the landlord to get the property vacated at a predetermined point in time. Any term that is indicative of the title of landlord should be avoided as it identifies the property as being of the landlord. Other than that, there may be many other valid points that should be considered.
Furthermore, the landlord should also ensure that the tenant has submitted the prerequisite documents before handing over the possession to the tenant. There are commonly required documents such as identity proof like an identity card issued by the state, passport, employment identity card, license issued by the government, etc. During the subsequent yearly renewal process, the landlord may also ask for tax return and annual income of the tenant to be submitted.
If the landlord is entering in the agreement as an agent for the property owner, the landlord must possess a power of attorney either for life time or irrevocable during the tenure of the rent agreement. In Punjab, the stamp duty for an unregistered rental agreement is 2%, half if the period exceeds five years.
Printable Version of Rent Agreement in Punjab
For those in search of a readily available and trusted rent agreement format specifically for the Punjab region of India, we have supplied one right here. This downloadable PDF file can be easily accessed from this website, saving you the trouble of combing through the long list of generic and sometimes unreliable templates that are floating around online.
The downloaded copy will contain a fully integrated rent agreement format in legal size paper (12" X 18"), meaning you won’t have to waste time moving text around so that it will fit the prescribed document size. Also, a careful review of the table of contents embedded in the PDF file will allow you to understand the structure and content of the document even before you download the whole file.
The major benefits of using the standardized rent agreement format:
- Clarity: All the format are differently laid down by various websites. Also the standard rent agreement in the Punjab is different from other states. The standard rent agreement format in Punjab made available by us is in tandem with the Stamp Act prevalent in the Punjab State. We too have taken help from the Law and order department Directorate, Punjab Government to get a draft rent agreement format in Punjab.
- Legality: The various rent agreement formats available on the various websites are not legally valid. It is better to go by the law and draft standard rent agreement formats in Punjab.
- Professionalism: The professionally drafted standard rent agreement format in Punjab not only sets the tone just right for your professional dealings but also saves you from any legal consequences from not registering a rent agreement.
Legal Formalities and Registration of Rent Agreement in Punjab
In Punjab, rent agreement registration is governed under the Indian Registration Act, 1908. As far as the legal requirements for registering rent agreements in Punjab are concerned, the requirements are fairly common across India. Any person intending to register a rental agreement must furnish the following documents: The following process is typically followed when registering a rent agreement in Punjab: It is important to note here that the registration of the rent agreement is not a mandatory legal requirement; however , it is advisable to get the agreement registered because only a registered agreement has evidentiary value in a court of law. Also, in the event of any disputes between the landlord and tenant, it is easier to prove the terms of the agreement if it is registered.
Common Errors to Avoid while drafting Rent Agreement
In the pursuit of avoiding legal hassles down the road, it is essential for landlords and owners to enter into a rent agreement (also known as a lease agreement, rental contract, or tenancy agreement) before allowing tenants to stay on their property. This rent agreement creates a legal contract that outlines specific terms and conditions agreed upon by both landlord and tenant, including rent payment, maintenance responsibilities, and property use. Unfortunately, many people erroneously view a rent agreement as a mere formality and don’t spend much time on its drafting. This is a mistake that can lead to considerable future inconvenience and expense for landlords. This article will give you a useful understanding of the common mistakes to avoid when using rent agreements in Punjab. Remember – your rent agreement is the single most important document that will affect your property – make it count.
Failure to specify the period of the tenancy Not specifying a particular length of time for the tenancy translates into a three-year fixed term tenancy under the Punjab Rent Act. You may wish to enter into a tenancy for a shorter duration, such as one year, or a longer duration. The decision is yours.
Not paying stamp duty, but rather just printing on plain paper This is another extremely common mistake made by landlords in Punjab. Rent agreements must be executed on non-judicial stamp paper and rent agreement duties must be paid at the Collectorate for the agreements to have legal validity. Failure to do so could help the tenant escape the responsibility to pay rent, as well as his responsibilities to vacate the property, as outlined in the rent agreement. If court proceedings are instituted, the courts will reduce the rent, and the tenant will not be evicted.
Not registering the rent agreement Registration is essential if you want your rent agreement to be admissible in court as evidence in the event a dispute arises. In reality, however, many landlords do not register their rent agreements, perhaps because registration comes at cost. Even worse, many landlords fail to even execute the rent agreement, feeling confident that an agreement to lease or email should suffice. This is a mistake. The Punjab Rent Act specifically prohibits a court from exercising jurisdiction over the relationship between landlord and tenant unless there exists a registered rent agreement. The required fee is based on the annual rental value. It is approximately 3 or 4% of the total rental value. The cost of registration is minuscule compared to the ongoing safety and peace of mind that results. Moreover, failure to register the rent agreement deprives the landlord or owner of the ability to effectuate an eviction of tenant in the event of a dispute. In such a case, the local collector substitutes for the civil court. As part of this process, he records the initial deposit amount in the rent agreement so that your objectivity is maintained. In conclusion, do it right from the outset. Enter into a comprehensive but clear rent agreement prior to allowing tenant to occupy your property.
FAQs on Rent Agreement in Punjab
There are various types of questions people raise when it comes to rent agreements. Some of them are: –
- The duration of the agreement.
- Clauses pertaining to renewing the agreement.
- What happens in case of dispute and;
- Other miscellaneous questions.
The answer to these questions is as under: –
– The duration of the agreement is dependent on the agreement between the parties. The parties can agree upon the time period mutually. For example, they can agree that the agreement will be valid for one year, six months, three months, etc.
– Clause pertaining to renewal of tenancy are discussed and inserted in the agreement mutually. For example, the parties can agree that either of the parties has the right to renew the contract after expiry of the original contract, without getting into a written agreement again. Accordingly , the duration of the rent agreement will be for whatever time mentioned in the agreement; and upon expiry the rent agreement shall stand automatically renewed.
The simplest way to handle disputes is, to resolve the issue amicably between the landlord & tenant or to get the same resolved by mutual parties. In case the issue cannot be resolved amicably, the parties have to get the issue resolved through litigation. The tenant may approach the Rent Controller / Small Causes Court/ District Courts as may be applicable in each respective state, and get the matter adjudicated. The tenant may also remedy his grievances by application to the Rent Controller under sections 12, 15, 17 and 18 of the Act depending on the facts of the case.
The possession of the tenant can be given to a landlord or landlord’s legal heir only by due process of law. If they don’t follow the process of law, then that would amount to forcible dispossession which is illegal, and attracts consequences as provided under Code of Civil Procedure.