After this period, the Model Directive may be the vision document on the basis of which states adopt their own rental laws. If this happens, Maharashtra`s rental market will also change significantly. The move will unlock a large number of apartments in the rental apartment segment. Ashok is the owner of a 2 bedroom house. He rents it with a monthly rent of Rs. 8000/- to Mahesh for a period of 11 months. The deposit is Rs.50000/-. They make a lease for a 50 rupee stamp paper. It goes well up to 5 months. Mahesh pays the rent for up to 5 months, after which he stops paying the rent and also refuses to move. Ashok immediately turns to the court. The court seized the stamp tax agreement on the deficit paid and imposed the fine up to 10 times the stamp duty due. So what will be the penalty Ashok will have to pay? Let`s do the math.
In addition to the above stamp duty fee, Rs 1,100 must also be paid for the registration fee. For example, if you sign a holiday and license contract for 24 months with a monthly rent of 25,000 rupees and a refundable deposit of five lakh Rs, you will have to pay a stamp duty of 1,750 rupees (0.25% on the rent of six lakhs for two years and interest of one lakh for two years). According to section 17 of the Indian Registration Act, which applies to the whole of India, any contract for the lease of immovable property must be registered from one year to the next or for a period exceeding one year. Unless otherwise provided by state laws, each holiday and individual license agreement must be registered for a period of 12 months or more. Token Advance – At the time of locking the house for rent, the tenant sometimes pays a small symbolic advance to the owner. This is to prevent the landlord from entertaining other potential tenants. The symbolic advance blocks the property until one of the parties moves away. Once the symbolic advance is given, it is assumed that both parties are willing to conclude the agreement. But if one of the parties withdraws from the continuation of the proceedings, that party must compensate the loss for the other party. For Maharashtra, however, the law has been made stricter and, in accordance with the provisions of section 55 of the Maharashtra Rent Control Act 1999, any rental or holiday agreement and license must be in writing and must also be compulsorily registered, regardless of the rental period. It is the landlord`s responsibility to ensure the registration of the lease, otherwise the landlord may have to pay a fine of Rs 5,000 and punish himself with a prison sentence of up to three months. In the event that the holiday and license agreement is not registered and disputes arise between the owner and the tenant, the contractual conditions invoked by the tenant will be considered as the real and correct conditions in which the property was given for rent, unless proven otherwise….