Whenever renting your house or flat or shop, always keep in mind to have a rental agreement with the renter. Rental agreement in Bihar or any other state is a must-have with the renters or tenants. This article is dedicated to rental agreements, terms for rental agreements, stamp duty, registration charges, etc.
In Bihar, it has recently seen a slew of reforms, all under the close supervision of many leaders, because rising population means increased demand for jobs and, unsurprisingly, rapid growth in the real estate sector. To capitalize on this trend, there are many pre-drafted, legally valid templates for a variety of legal documents, such as House rent agreements, Rental or Lease Agreements.
In the article below, you will find answers to many other related questions. Such as what is the rent agreement stamp paper amount in Bihar, what is the 11-month rental agreement stamp paper value in Bihar, etc.
How to Write a Rental Agreement
Before explaining the way of writing the rental agreement. Let’s read what a rental agreement is and the types of it.
What is a Rental Agreement?
A rental or lease agreement is a type of contract that is signed by the property owner as well as the tenant who desires to temporarily occupy the property for a specified time period. A rental agreement, also known as a rent deed or lease deed, holds general information about the residential property, the property owner, the renter (or tenant), and the rent amount of the property.
The rental agreement or lease contract in Bihar is written on the stamp paper. In India, there are different types of rental or lease contracts, as discussed below:
Rental Agreement Types
11-Month Tenancy Agreement: This is perhaps the most popular type of Rental Agreement, and because it is the longest without requiring registration, the registration is skipped usually. The agreement can also be renewed as the expiration date approaches.
Commercial Lease: A commercial lease is a type of agreement that is almost exclusively signed between businesses or between a landlord and a leaseholder. Because the procedure and legal requirements involved in forming a Commercial Lease Agreement differ from those involved in forming a Tenancy Agreement, the Notarization, as well as Registration both, are highly recommended.
Long-Term Lease: Usually lasting more than a half-decade, it entails a large sum of money as well as registration is strongly advised. Long-term leases also require the Tenant to pay a huge yearly sum of money that the Landlord returns to the Tenant at the end of the Agreement.
Now let us discuss how to write a rental agreement: i.e. what terms should be included therein the lease agreement.
Commonly used rental agreement content
A rental agreement’s typical contents include:
- The landlord’s and tenant’s names, as well as their agents’ names.
- The property’s description.
- Rent amount and payment due dates, grace period, and late fees.
- Payment method for rent.
- Methods for terminating the rental agreement prior to its expiration date, as well as any charges that may apply.
- The amount of the security deposit, as well as the account in which it is held.
- Utilities provided by the landlord and how the rental charge will be calculated if the landlord decided to charge for any such utilities.
- The tenant has access to certain facilities on the premises, such as a swimming pool and security systems.
- Pet norms, noise rules, and the penalties for breaking them are all examples of rules and regulations.
- Identification of available parking, which include spaces for designated parking, if available.
- How renter repair cases are handled, as well as emergency procedures.
Terms that are commonly found in a rental agreement
Rental Period: The span of time that the rental or lease agreement will be in implication.
Rent: The sum of money paid by the renter toward the landlord in a swap for the rented property.
Rent Deposits: The amount of down payment required (if there is applicable any), the purpose of the payment, the conditions for deposit return or adjustment at the end of the lease period.
Terms of property use: This term is used for the purpose of property use, as well as the terms and conditions under which it will be used.
Shop rent agreement rules/ Residence agreement rules
Some of the common shop rent agreement rules and rules for residential rental agreements in Bihar or in any other state are given below
- The owner and the tenant should have a written agreement.
- The contract must be written on stamp paper with a lower limit of Rs.100 or Rs.200.
- Stamp duty is 1% of the annual rent along with deposit paid, or Rs. 500/-, whichever is less. So, if you want to be safe, you can fix the agreement on Stamp paper with the optimum value as determined by the government.
- The registration fee is 1% of the total yearly rent, plus a deposit that must be paid at the registration time.
- When renting a property, the residence or flat or home should be freshly painted and then handed over to the renter. Many owners deduct painting costs from the deposit at the time of departure, depending on the terms of the lease.
- If the rental agreement is for over 11 months, it must be registered with a Sub-Registrar office. It is safer to register even if the contract is below 11 months, but it is not required. In the event of a legal dispute, a registered as well as duly stamped rental contract is always admissible in court.
Rent agreement for GST registration
The GST registration process is entirely online, and no physical documents are required to be submitted to the GST Department. It is critical to arrange the documents in accordance with strict requirements in order to successfully complete the GST registration steps.
To obtain GST registration, the Partnership must electronically file an application in Form GST REG-01 with the following information and documents at the GST common portal.
The partnership must submit documents to the GST portal.
1. A copy of the partnership’s certificate of registration, if one exists.
2. Permanent Account Number i.e. PAN
3. Partners’ agreement/resolution to receive GST registration
4. Proper authorization to Mandated Signatory
5. Bank Account Information: Digitized version of a cancelled cheque with the business entity’s name. Their bank account details such as account number, MICR, IFSC, and branch information.
6. Passport size photographs of the Partners/Authorized Signatories
7. Authorised Signatory’s Digital Signature Certificate
8. Details of address for the proof
Note: For GST registration, an identifiable address must be provided. This is the most important document that must be carefully identified before the GST Registration can be processed. The GST Registration address does not have to be the same as the Partnership’s Registered Office address.
Other Important Documentation Requirements:
When it comes to commercial purposes, the rent/lease agreement or contract should be in the Partnership’s name.
The rental agreement signed in the name of the partners or designated partners is not acceptable as proof of address.
If the Rental Agreement or contract is not available, an affidavit to that effect, as well as any document proving possession of the premises, such as the Electricity Bill’s copy, will be accepted for GST Registration.
Documentation such as Aadhaar Card, or Licence of driving, or Voter ID or Passport in the Owner’s name with the correct address should also be given if the address written on the document such as receipt of the Property Tax or Municipal’s Khata copy or on the Electricity Bill is incomplete.
Stamp duty on rent agreement in Bihar
Before knowing the stamp duty on the rent agreement in Bihar, let us read first, what is the stamp duty?
What is Stamp Duty?
Stamp duty is a state government levy that is paid to the registrar in order to register a document, usually an agreement or any transaction of papers between multiple parties. Depending on the document’s nature, it is usually a fixed amount or a percentage of the contract value whatever is stated in the same document.
Stamp duty is a government-imposed tax levied on a variety of property transactions. When you buy a home or enter into a rental agreement, you must pay stamp duty. Section 3 of the Indian Stamp Act, 1899, mandates the payment of stamp duty.
Stamp duty varies by state and is different depending on the type of documents. For example, stamp duty is ticketed on the value of the transaction or the rate of the circle (the government’s minimum property price). Whichever one is higher than the other when registering a property paper.
The stamp duty may vary depending on the property price at the time of the rent agreement. But its criteria will always be fixed, whether we talk about Bihar or any other state.
When we especially talk about the Bihar state, the stamp duty for property registration is 6% of the total property price, however, 2% of the property price will be charged for the registration. However, the stamp duty criteria may also change depending on gender.
But it should be noted that the stamp duty and registration charges and their rules, as well as values on the rent agreement, may also change depending on the time period. i.e. 11-month rental agreement stamp paper value in Bihar may be different than, 1 or more year rental agreement.
You must be wondering why? So, let us explain briefly why it is different?
Stamp Value for rental agreements for up to 11-months
The rental agreement for 11 months is legal as well as valid in India. These kinds of agreements are authentic, subtle as well as affordable by both landlord or tenant. They can also be submitted in the court, (if required) as evidence.
However, the rental agreement for more than 11 months required proper registration with your local authority. Hence it became more costly than the 11 monthly agreement.
11-month rental agreement stamp paper value in Bihar or any other state is Rs. 100 or Rs. 200 (may vary). An additional amount of 1% of rent value and annual paid deposit or Rs. 500 will also have to be submitted as stamp duty.
Rent agreement format in Bihar
The lessor or lessee of a rental property can use this rental or tenancy agreement format. Here, on the agreement, it is necessary to have it signed by both the lessee and the lessor in order to fix the agreement to the lessor’s terms.
It is a legally binding document that can be referred to by courts in the case of a dispute. The rental contract must always be printed or written on Non-Judicial Stamp Paper worth at least Rs.100.
The lessor and lessee usually sign the rental agreement after the lessee pays the deposit as decided earlier for the rental property. The document is usually executed in two copies, with each party keeping one of its main copies.
If you are thinking about the format of the rent agreement in Patna, Bihar. Then, you should have this information that the rent agreement format in Bihar is almost the same as the rent agreement format in other states. Below is a sample of a rent agreement format.
RESIDENTIAL RENTAL AGREEMENT
This agreement made at [City, State] on this [Date, Month, Year] between [Landlord Name], residing at [Landlord Address Line 1, Address Line 2, City, State, Pin Code] hereinafter referred to as the `LESSOR` of the One Part AND [Tenant Name], residing at [Tenant Address Line 1, Address Line 2, City, State, Pin Code] hereinafter referred to as the `LESSEE` of the other Part;
WHEREAS the Lessor is the lawful owner of, and otherwise well sufficiently entitled to [Lease Property Address Line 1, Address Line 2, City, State, Pin Code].