Questions Legal

Why rental agreement is made for 11 months?

Airtract

Nupoor Mahadev

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Most of the people come across dealing with rental agreements and legal transactions related to it on a recurring basis. Due to the increasing cost of construction, scarcity of land, and legal issues, people opt for rental properties rather than building an asset for themselves. There are many rental properties available around owned by certain owners, which are given to needy for rent under specific ground rules.

When two people engage in a rental deal, it is necessary to create a rental agreement concluding all the legal and ethical aspects of the property authorization. An owner who owns the property can give his property to someone else for rent and get it considered under the law; the Rental agreement act as the vital proof. 

A rental agreement is a contractual document that connects the owner of the property and tenant to guard the interest of both parties. The landowner must either be the owner of the property or a legal representative having a power of attorney from the owner. 

It is a common act followed in India to depict the rental agreement for 11 months rather than filing it to 12 month/1 years. The main reason for this is to avoid stamp duty and other charges. Because while registering for a rental agreement, both the owner and tenant have to share the costs formulated during the registration process. But it is not mandatory for the owner and tenant to make a rental agreement for 11 months. Rental agreements can be made for as many years as required. As per the Registration Act, 1908, clause (d) of sub-section (1), registration of the property that is on lease for one year or more than a year is compulsory.

An 11-month rental agreement is considered valid under law and 100% credible under all circumstances because there is no law stating that a rental agreement made over 11 months is invalid or not accepted.

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