Is a rent lease agreement on an Rs.50 stamp paper good enough?

by Admin on December 12, 2011 · 0 comments · Property


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Where in the operative part of the lease, means in the lease deed if the land is let out together with the building thereon, the building and the land underneath such building would also belongs to the lessor. Where the lease is only in respect of the land and the lessee erects the building thereon, the building belongs to the lessee because in India dual ownership is recognised.

That means one person may be the owner of land while another may be the owner of the building standing thereon.Under the provision of Section-108 of the Transfer of Property Act, a lessee has right to remove the building erected by him when he vacates the leasehold land.

Now in such case the land belongs to "X" who has given it on lease for 99 years to "Y" with a right to erect the building thereon. If the lease deed provides that at the expire of the period of lease the lessee will hand over the possession of the land, the lessee has right to remove the building.

In such case the building erected by lessee "Y" will be shown as Owner of the building in the Municipal Record and not belongs to "X". Now if the lease period expires by afflux of time, the lessee will have to handover the land to the lessor. If the lessee does not remove the structure, in execution of the decree the lessor will be entitled to recover the possession of the land by removing the structure.

If the lease is in respect of the land and building both, then in the aforesaid event, the lessor will be also entitled to the building and the lessee will have no right to remove the building. If the lease is only in respect of the land and decree for possession is passed in favour of the landlord in respect of the land, the landlord can execute such decree and in such event the occupant of the building will have no right in respect of the structure or premises in the building, because such occupant will not become the sub-tenant of the land. In the matter of Goregaon Malyalee Samaj V/S Popatlal Prabhudas & Sons reported in 1988 Bombay Case Reporter Page 358 as well as in the matter of Smt. Suman V/S Norman Ferreira reported in 1986 Bombay Rent Case Page 436, it was held by the court that tenants occupying the structure were in the position of licensees in respect of the plot of land vis-à-vis the superior landlord and therefore they had no better rights than the tenant

Is a rent lease agreement on an Rs.50 stamp paper good enough? The lease is for a period of 11 months. Do I need to get the lease registered by paying stamp duty?

The agreement must be stamped in accordance with the Stamp Act. Under the Transfer of Property Act any lease is for one year or more requires registration. Your lease is less than one year therefore it does not require registration.

However if any other law makes it compulsory to register, then such agreement requires registration. As an example the Maharashtra Rent Control Act requires such an agreement to be registered, and then the parties have to register it. The question of it being safe or not is not the criteria.

Source: economic times

 





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Admin December 12, 2011

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