How to Make a Rental Agreement and What Rules You Must Know

In today’s urban lifestyle, renting a property has become a common practice. Whether it is for residential or commercial purposes, both landlords and tenants need a clear legal understanding to avoid future disputes. This is where a Rental Agreement plays a crucial role. It is not just a piece of paper but a legally binding document that secures the rights and duties of both parties. In this article, we will explain in detail what a rent agreement is, how it is created in Maharashtra, what documents are required, the process involved, and the important rules you must be aware of.

What is a Rental Agreement?

A rental agreement is a written legal contract between the landlord (owner) and the tenant. It is a document that describes in detail which property is being rented, whether the purpose of renting is residential or commercial, the rent amount and the mode of payment, the total duration of the tenancy, and the rights as well as responsibilities of both landlord and tenant. By putting all these terms together in one clear agreement, it provides a comprehensive understanding to both parties. It serves as legal proof in case of any dispute and ensures transparency in their relationship, helping avoid misunderstandings in the future.

Duration of Rent Agreement in Maharashtra

In Maharashtra, most rent agreements are made for 11 months. The main reason behind this is that if the agreement exceeds 11 months, it becomes legally mandatory to register it with the Sub-Registrar office.

• 11-Month Agreement – Simple and commonly used; can be registered online or offline.
• 12 Months or More – Must be compulsorily registered at the Sub-Registrar’s office, otherwise, it may be treated as invalid in the eyes of law.

Important Clauses to Include in a Rental Agreement

While drafting a rent agreement, it is essential to clearly specify all important conditions. The document should include full details of the property along with its address and description, the rent amount with the mode of payment, and the security deposit along with its refund policy. It must also clarify who will pay for utilities such as electricity, water, and society charges. The duration of the tenancy, generally fixed at 11 months, and the notice period, usually one month, should be explicitly mentioned. Lastly, the agreement should state whether the property can only be used for residential purposes or if commercial use is also permitted. By covering these points in a clear manner, both landlord and tenant can avoid future misunderstandings.

Documents Required

By the Landlord (Owner):

• Aadhaar Card or PAN Card.
• Proof of ownership such as Sale Deed, 7/12 extract, or property tax receipt.

By the Tenant:

• Aadhaar Card or PAN Card.
• Passport-size photograph.
• Address proof (old rent agreement, electricity bill, or driving license).

How to Make a Rental Agreement in Maharashtra

Online Method (e-Registration)

The Government of Maharashtra provides an e-Registration facility to make rent agreements online from the comfort of your home. The process involves:

• Visit the official website https://igrmaharashtra.gov.in.
• Select “Rent Agreement” option.
• Fill in details of landlord, tenant, property, and witnesses.
• Pay stamp duty and registration fees online.
• Verify using Aadhaar-based biometric fingerprint authentication.

Finally, a legally valid rent agreement is generated in PDF format.

Read also : Maharashtra: The Vibrant State

Offline Method (Sub-Registrar Office)

• Prepare the agreement draft with the help of a lawyer or typist.
• Purchase appropriate stamp paper.
• Both landlord and tenant sign the agreement along with two witnesses.
• Submit it to the Sub-Registrar office.
• Pay the registration fees (around ₹1000–₹1500).
• Collect the registered copy of the agreement.

Stamp Duty and Registration Fees

Stamp duty in Maharashtra is calculated based on the rent and deposit amount. For an 11-month agreement, it generally ranges between 0.25% to 0.5%, with a minimum fee of ₹1000. Registration fees are additional.

Police Verification

Before handing over possession, the landlord must fill a Tenant Verification Form at the local police station. This step is important for safety and security. In fact, many housing societies do not allow tenants to move in unless police verification is completed.

Society Permission

If the property is in a housing society, the tenant must obtain an NOC (No Objection Certificate) from the society. Some societies may also ask to use their own specific rent agreement format.

Lock-in Period

A lock-in period clause is often included in agreements, which prevents the tenant from vacating the property within the first six months. This ensures the landlord has a stable rental income and the tenant has guaranteed accommodation.

Deposit Rules

In Maharashtra, refunding the deposit with interest is not legally mandatory. However, if clearly mentioned in the agreement, the landlord must comply. Deposits should ideally be paid through bank transfer or cheque for security reasons.

Condition Report

Before the tenant moves in, the property’s condition should be documented through photos or videos. An “As is where is condition” clause in the agreement can help avoid disputes later.

Subletting

The agreement must clearly state whether the tenant can sublet the property. Usually, subletting is not allowed unless the landlord provides written permission.

Renewal of Rent Agreement

The agreement should be renewed at least one month before expiry. Renewal can be done either via e-Registration or through the Sub-Registrar office. This ensures continuity and avoids legal complications.

Government Regulations

As per the Maharashtra Rent Control Act, 1999, certain old tenancies and special cases fall under different legal provisions. However, the standard 11-month rent agreement usually bypasses these strict regulations, making it simpler and more flexible.

Commercial Rent Agreement

When renting for commercial use, higher stamp duty applies. Additionally, a Trade License and Shop Act License from the local municipal authority must be obtained.

Key Suggestions

• Always prepare a written rent agreement; never rely only on oral agreements.
• Clearly mention the notice period in the contract.
• For commercial properties, obtain a Shop Act License.
• Ensure signatures of both parties and witnesses are present on every page of the agreement.

A rent agreement is not merely a formality but a legal safeguard. By following proper procedures, submitting necessary documents, and adhering to rules, both landlords and tenants can build a secure and transparent relationship without fear of disputes in the future.

Note: This article is intended for informational purposes only and while every effort has been made to ensure accuracy, some details may vary depending on specific circumstances. 

Read in hindi : Rent Agreement: किराये का एग्रीमेंट कैसे करें? क्या है इसके नियम और महत्वपूर्ण जानकारी?