Why is a Rental Agreement Typically Made for 11 Months?

Have you ever rented a house? If so, your landlord likely instructed you to sign a lease for a period of 11 months.

In India, lease or rental agreements are customarily made for 11 months. Even if the same tenant renews the agreement multiple times, it is still signed for 11 months each time.

Have you ever wondered why rental agreements are only made for 11 months?

Rental Agreement:

A rental agreement is a written document that establishes a legal relationship between the landlord and the tenant. It is considered beneficial for both parties as it outlines the terms and conditions that both must adhere to. However...

11-Month Lease Agreement:

In reality, such 11-month lease agreements are more advantageous to the property owners than the tenants. There are several practical issues involved in renting houses or shops in India.

Issues with Tenancy:

Legal experts state that in India, evicting a tenant can be very difficult. Due to procedural delays, it can take many years for a property owner to regain full possession of their house through legal means. During this time, the house remains in the hands of the tenants.

Avoiding Problems with an 11-Month Lease:

To avoid such issues, lease agreements are typically made for only 11 months. This period is beneficial for property owners in several ways.

No Need for Registration:

If a rental or lease agreement is for less than one year, there is no need to register the agreement document. Lease agreements of less than one year do not need to be registered under Section 17 of the Registration Act of 1908. This law stipulates that lease agreements shorter than one year can be signed without registration.

Stamp Duty Savings:

Since lease agreements shorter than one year do not require registration, property owners can avoid paying stamp duty. This saves money, making the 11-month lease agreement a preferred choice.

Choosing to Register a Rental Agreement:

If one opts to register the rental agreement, the stamp duty amount is determined by the rent and the duration of the stay. For longer leases, the stamp duty is higher. Although registering a short-term rental agreement incurs lower costs, any registration involves a certain amount of expense, which is why a shorter lease term is typically chosen to avoid unnecessary expenses.