Bangalore is not a city you visit to knock a specific sight or attraction off your travel bucket list. Don’t get us wrong — there’s a lot to see here, but in Bengaluru it’s more about eking out your place in the city, finding that bar or microbrewery. However, Bangalore is very famous for its IT and software companies. There are a lot of start-ups that take birth in the city and the city already has well-established MNCs. This created opportunities for the people to get employed and later on migrate to the city. Now migration involves a lot of headaches. Truly! There are a lot of times the company does not provide accommodation but some monetary benefits. So, You need to find a place to live in when you are migrating to Bangalore. So, renting a flat involves a lot of pointers. There are few terms and conditions, the process needs to be followed. These holds so much importance as they are legally bounded. So, instead of confusing you with these random explanations, below we have a thorough guideline that involves the process and requirements while you sign a rent agreement:
- The first step involved in drafting the Rental Agreements and later on printing it on a Stamp paper of due value as mentioned below - Once the above step is done, the Rental Agreement signed by the owner and tenant in the presence of two witnesses - The two witnesses should also sign and attest the document – this is a mandatory step you cannot skip it - Now get the Documents registered at a nearest Sub-Registrar office after paying due registration charges
To all those who do not know what stamp duty stands for: A Stamp Duty is the tax that is levied on legal documents as render for making them legally valid. When it comes to the state of Karnataka, a maximum Stamp Duty that can be levied on any rental agreement is INR 500/- However, it is typically calculated as follows: - For a time from 0 to 10 years that stamp duty charges are 1% of annual rent + deposit - For time above ten years, the stamp duty charges are 2% of yearly rent + deposit The registration charges for rental agreements in Karnataka stand at 1% of the rent + deposit. There a lot of times commonly numerous people overlook the importance of paying proper stamp duty and registering the document. Now, these factors cannot be simply ignored. If appropriate stamp Duty is not paid, there will be a dispute raised, both the parties involved may have to pay ten times the original value as a penalty. So, it is better to pay a minimal amount, in the beginning, to avoid any headaches later. Likewise, when it comes to the other side, not registering a document has harsh consequences. Unregistered documents will and can never be accepted as primary evidence, such document thought over as collateral in courts.
The most asked query once you get the drill of the rental agreement. For the leases with a term of 11 months or less, notarization is not necessary. When it comes to leasing that is created for a year or more, registration (and not notarization) is recommended. This process or rather step is a fraud-deterrent precaution, which proves that the entities mentioned in the contract are the ones who signed it and that the Rental Agreement is not a forged or fake one.
In Karnataka, the term of renting is usually 11 months. Just like in any state (mostly), which can be renewed at the end of the 11th month. This completely depends on the parties. The tenant must pay monthly rent. Additionally, amounts like the electricity and water charges are to be paid as per the usage. for more clarification, it is always advised to check with the owner what is the rate per unit that is charged in the meter.
Another popular method of renting is the long-term lease. In this, a lump sum or a pre-decided amount is paid as a one-time deposit for a certain period or term of lease like 2 years or 3 years. The tenant or lessee does not pay any monthly rent. This might sound to be hassle-free, but the deposit amount is usually hefty. Mostly these are practiced in the commercial lease. At the end of the lease period, the owner must refund the entire deposit money without any interest. In a long-term Lease, the benefit is that there is no hassle of paying monthly rent and a lot can be saved in this type of lease. The involvement of certain charges may still be active like the maintenance, electricity, and water charges that need to be paid regularly.
The following are the requirements that you need to keep in mind while you are renting a property in Karnataka or taking Property for rent: - It should be made clear that renting is for either residential or commercial purposes. - Both parties need to decide and discuss the points of the rent agreement. Then there should be a written agreement between the owner and the tenant. - The agreement should be Printed on a Stamp paper of a minimum value of Rs.100 or 200/-. This depends on the state, and for Karnataka it is Rs. 100 to 200. - The stamp duty charged is 1% of the total rent plus deposit paid annually or in some cases the charge is Rs. 500/- whichever is lower. So, if you need to be on a safer side you can agree on a Stamp paper that is of the appropriate value as prescribed by the government. - The house or flat (any property) should be neatly painted and handed over to the tenant at the time of renting. This can be discussed by the tenant and the owner beforehand. At the time of Vacating many owners make a deduction of painting charges from the deposit, which depends on the agreement terms. As mentioned, this is a completely mutual discussion. - Some owners request and have specific requirements as they ask for only vegetarians as their tenants and this should be disclosed before agreeing. - A rental agreement should be registered at a Sub-Registrar office. And if the term of the agreement is involved for more than 11 months, this should be practiced. If the term is less than 11 months, it is safer to still register it but is not mandatory. - A registered and duly Stamped rental agreement is never a waste and is a piece of valid evidence in Courts if any legal disputes arise. - The registration charges are 1% of the total annual rent and deposit that also should be paid at the time of registration.