About Lease deeds
Lease deeds are agreements between the tenant and landlord. They formalise the relationship between the two parties and define their obligations and rights. They state the circumstances under which a landlord may enter the property, the notice periods both parties must provide, who will be responsible for the taxes, utilities, etc.
Lease deeds are necessary for commercial entities. Most entities find it more cost-efficient to rent out their workspaces rather than purchasing a workspace. With the usage of lease deeds, depending on the term and provisions contained within the deed, the tenant has the right to enjoy the property for the duration of that lease deed. If the tenant abides by the conditions within the deed, then the landlord may not evict the tenant, unless provided otherwise within the deed. The lease deed can also regulate the rent payable to the landlord by the tenant, and the rates at which the landlord may increase the rent.
A long-term lease deed with well-defined conditions regarding the enjoyment of the property and termination of the lease deed is beneficial for any tenant. It allows the tenant to have stability and focus on running their business while the landlord gains benefit by way of a fixed and expected source of income.
Lease deeds also protect tenants from any disputes that may arise around the property. Disputes regarding the title of the property and similar matters do not generally affect tenants. In the event the tenants are affected, they are generally indemnified by the landlord as a result of the indemnity clause contained in the lease deed.
Frequently Asked Question
If the duration of the lease is more than 11 months, it is mandatory to register the lease deed.
Leasing a property for a long period of time has certain benefits attached to it. It allows the tenant to enjoy the property and utilise it for a long period without the fear of having to move out of the property until the expiration of the lease deed. It provides a certain level of security. If you’re a business that has rented out a commercial property, then it is necessary for you to securely hold the premises as it is well known to your customers. Shifting from one place to another may be detrimental to your business interests.
If you consider a long-term lease, as the 99-year lease, it is easier to understand the necessity of lease deeds. Lease deeds specify in writing the terms and conditions under which the land is leased to the tenant by the owner. It provides what the owner may do during the period of tenancy, as well as what actions the tenant may undertake with the property. It provides clarity on the rights and obligations of the parties.
With a long-term lease, perhaps 5 years or more, the value of the property will undoubtedly increase to a certain extent. It is not fair for the landlord to only receive the same remuneration that he received at the time of entering into the agreement. If a fixed rate of increase over a fixed rate of time is clarified in writing, neither party will feel taken advantage of.
The above is merely one example of points covered by lease deeds. Essentially lease deeds provide clarity, thereby avoiding confusion and disputes regarding the parties. It also guarantees the tenant the right to use the property without interference from other parties, unless agreed to in the lease deed with the landlord.
This is subjective and varies, depending on the needs of the parties, nature of their relationship, nature of the property, and purpose for which the lease is being taken. However, it may be stated in general terms that the following must be covered in most lease deeds –
- Details of the Property
- Details of the Owner
- Rent payable to the owner
- Maintenance of property and payment of utilities
- Payment of taxes, cesses, and other statutory charges
- Payment of Registration Fees
- Renovation and Major Repairs
- Minor Repairs
- Method of Payment.
For registering a residential lease deed, you will require the following documents:
- Lease deed
- Stamp paper
- Receipt of registration fees
The procedure is as follows –
- Legally draft the lease deed
- Submit the request for its registration along with the copies of the relevant documents
- Pay the stamp duty fees
- Visit the registration office
- Pay the registration fees