Who Pays for Rental Agreement in India?

Hi, I am from Delhi and before renting the apartment, I asked my landlord whose responsibility is it to make rent agreement. He informed me that the landlord needs to register the rent agreement and the tenants needs to pay. 

Who should Pay for Rental Agreement?

The landlord informed me that he would be the one to register the rent agreement but the cost needs to be borne my me. He said according to the Delhi Rent Control Act and Transfer of Property Act, the responsibility of registering the rent agreement lies on the landlord. 

If he/she fails to do that, then they have to pay a fine of Rs. 5000 or face imprisonment for up to three months. This is done so, that, they can use it as evidence in their defence in case the tenant defaults on rent payments.

Who Pays Stamp Duty for Rental Agreement?

According to the landlord, the cost of drafting the rent agreement and stamp duty is borne by the tenant. Following that, he told me about the registration cost of rent agreement. 

And that is all that he told me about my question whose responsibility is it to make rent agreement. I hope this helps.

This is an excellent query. I have a fair idea about who pays for rent agreement in India. Let me share with you details on the same. Basically, there is no such said rule on the same. In some cases, the tenant alone bears the cost of the rent agreement. I am also aware of the cases where landlord and tenants have shared the expense of drafting and registering the rent agreement. 

Let us delve more into the topic of who pays for the rent agreements in India below anyway.

In most cases, the tenant pays for the rental agreement, which includes the cost of drafting the agreement and stamp duty. The tenant is also responsible for registering the rental agreement, if applicable, as per local laws.

I hope this clarifies your query about, who has to pay for rental agreement. 

For instance, when I rented a house in Bangalore, I had to pay for the rental agreement. I opted for the NoBroker rental agreement service. You can opt for their rent agreement services because of the following advantages;

• They made the process totally online. No Visit to the Government office is required.

• The rent agreement will be delivered to your doorstep within 3-4 days, printed on paper bearing a legal stamp. Apart from their convenience fee, the charges typically include stamp duty, registration charges, etc.

• Also, if the landlord and tenant are in a different location then they can use the Aadhar eSign-based digital signature service.

However, I’d like to expand on the topic of who pays for tenancy agreements. It's worth noting that the practice of who pays for the rental agreement may vary in different regions of India. In some cases, the landlord and tenant may mutually agree to share the cost of the rental agreement or split it equally. 

I’d like to conclude my answer here about who pays for rent agreement. I believe this answer clarifies that in India, it's generally the tenant's responsibility to pay for the rental agreement, including the drafting, stamp duty, and registration fees. However, it's always prudent to clarify the payment responsibility and mutually agree upon it between the parties involved to ensure a smooth and hassle-free renting experience.

Read More:

The primary conditions and criteria that have been discussed and agreed upon by the landlord and tenant are detailed in an agreement for rent. When I started my grocery shop, I registered a rental agreement with the owner for 11 months. A lease often consists of a registration agreement or a notarised agreement. So keep reading to know who should bear the cost of rent agreement.

Who should pay for rent agreement?

In most cases, the costs of rental agreements are covered by the renter. The official rental agreement document is generally kept by the landlord. A stamp duty fee, which changes from state to state, must be paid by both parties in order to register the rental agreement. This must have cleared your doubt about who pays rent agreement charges.

Can the owner hike the rental charges?

Owners are restricted from implementing any pre-fixed rate increases for the whole term of the rental agreement under the 2019 Model Tenancy Act. For example, if the lease expires after 11 months, the owner cannot increase the monthly rate. The owner may raise the rent once this time period has passed and the new lease has been filed, usually not more than 10%. The Act mandates that owners provide renters three months' notice before increasing rent.

This guides you about who should bear the cost of rent agreement.

When you are entering into a rental agreement, you might have a lot of questions. Back in 2012, I decided to move to Bangalore and was fairly new to all this. I didn’t even know who pays for rental agreement in India. I rang my father back home and asked him about the same. I thought he must have an idea because he had friends who had rented out their properties. He asked them and called me back. I am going to tell you what he shared here with you.

My father told me that there is no law which specifically talks about who should pay for the rent agreement but generally, through common understanding tenants and landlords split the cost between each other. However, he was also told that in a few cases tenants bear the total cost of the rental agreement.

If you are getting a rent agreement created, you must first clarify with the other party (landlord or tenant) about the settlement of the cost of creating rent agreement.

I hope now you have better understanding of who pays for rental agreement in India.