The reason behind making the rent agreement for 11 months is to avoid the cost of other legal procedures like registration and stamp duty.
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Rent Agreement Rules: If you live away from your home in another city for the sake of studies or job and mostly live on rent. To rent a house, the tenant and the landlord have to rent agreement needs to be made, which contains details like name and address of both the parties, amount of rent, period of rent and other terms. Rent agreements are generally made for 11 months and this raises the question why rent agreements are made only for 11 months?
Rent agreements are made for 11 months because one of the reasons behind this is the Registration Act, 1908. As per Section 17 of the Act, it is not mandatory to register lease agreements for a period of less than one year. This means that if the rental period is less than 12 months, the agreement can be entered into without registration. It saves both the landlord and the tenant the hassle of visiting the sub-registrar’s office and paying the registration fee.
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Thus, to avoid such charges, an agreement of 11 months is usually done. Moreover, if the rental period is less than one year, the stamp duty is also saved, which has to be paid on registration of the rent agreement. As a result, the landlord and the tenant agree not to enter into a rent agreement for the house.
Stamp duty has to be paid on getting the rent agreement done
Explain that it is possible to enter into an agreement for more or less than 11 months. When a person registers a rent agreement, the stamp duty is decided on the basis of the amount of rent and the rental period. The longer the rental period, the higher the stamp duty. Therefore, the longer an agreement is made, the more money the parties have to pay. No additional charges for tenure less than 11 months.
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How to avoid the cost of legal process
The reason behind most of the rent agreements being done for 11 months is to avoid the cost of other legal procedures like registration and stamp duty. It provides an easy and convenient option for landlords and tenants to enter into a rental agreement without unnecessary charges.