Online Lease Agreement Services in Kolkata
As per the Transfer of Property Act, Section 105, a lease is defined as the transfer of the right to claim property, land, or an estate for a specific period or permanently. Acquiring a lease involves the payment or agreement of an amount, a share of commodities or other supplies, services, or any valuable consideration. This share is regularly or periodically redeemed by the lessee to the lessor, as outlined in the agreement. To comprehend ‘lease,’ it’s essential to understand the following terms:
Lessor: The lease provider (property owner) who retains complete authority over the property handed over to the lessee.
Lessee: The leaseholder who acquires the entitlements to use and possess the property based on the contract with the lessor.
Duration: The period during which the lessee holds the property rights, also known as the ‘duration.’
Premium or Rent: The amount or share required for granting the rights to use and occupy the estate, paid periodically or in a lump sum (as per the agreement). This payment, made at intervals, is also referred to as rent.
What constitutes a Lease Agreement/Deed?
A lease agreement is essentially a written contract between a lessor or landlord and a lessee or tenant, outlining that the lessor will receive periodic payments from the tenant in exchange for allowing them to use and occupy the property.
Typically required for longer-term leases spanning 1 to 5 years or more, a lease agreement plays a crucial role in governing the relationship between the landlord and the tenant. It legally enforces provisions that bind both parties.
To ensure a fair and unbiased agreement that protects the interests of both the landlord and the tenant, it is advisable to have a lease deed drafted by an expert documentation lawyer. This professional can understand the needs of both parties and create a comprehensive agreement.
Essential Elements of a Lease Deed in India
Distinguishing Between Lease and Sale
| Lease | Sale |
|---|---|
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The tenant has the privilege to exclusively use the property rights |
In this scenario, the buyer acquires complete ownership rights to the property. |
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Unless specified as perpetual, the lessee's rights to possess the property cease upon the termination of the lease. |
There are no limitations on the utilization of the property. |
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The payment is made either as a premium or at specified intervals. |
The property cost is paid as a one-time payment.
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The lessee is entitled to the usage of the property, and while the transfer of the lease is often permissible, the ownership rights to the property remain with the lessor. |
Purchasing a property grants the buyer the freedom to sell the property in the future. |
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Leasing is more cost-effective. |
The expense of acquiring outweighs the cost of leasing the identical property. |
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The lessee does not retain the residual value of the property. |
The residual value of the property is transferable to the buyer. |
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The paperwork for the lease is referred to as a lease agreement or lease deed. |
Selling usually involves agreements of sale, deeds of conveyance, sale deeds, and similar documents. |
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A lease deed is a contractual agreement wherein the tenant has committed to paying regular rent to the landlord.
Yes, if the leasing period exceeds 12 months, the registration of the lease agreement becomes mandatory under the Registration Act, 1908. Once registered, stamp duty and registration fees are applicable and must be paid.
Although the terms rent and lease are frequently used interchangeably, there is a distinction between renting and leasing a property. A rent agreement may function as either a lease or a license, and its classification depends on the terms, conditions, and rental period stipulated in the agreement.
Registration serves as formal notice of the lease for all parties and purposes. Failure to register implies a lack of such notice. Consequently, a landlord may face challenges in recovering unpaid rent from the guarantor if the tenant defaults on payment.
A lease agreement is a contractual arrangement between two parties – the lessor and lessee. In this agreement, the lessor grants the lessee the right to use a property owned or managed by the lessor for a specific duration, with the lessee making periodic rental payments. It’s important to note that the agreement does not confer ownership rights to the lessee.