WHAT IS LEASE DEED?

Lease defined: A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service, or any other thing of value, to be rendered periodically or on specified occasions, to the transferor by the transferee, who accepts the transfer on such terms. Lessor, lessee, premium and rent defined: The transferor is called the Lessor, the transferee is called the lessee, the price is called the premium and the money, share, service, or other thing to be so rendered is called the rent. Essentials of Lease: An instrument of lease must contain the duration of the lease, the time of commencement, the amount of rent or premium, if any, the time of payment and the covenants between the Lessor and the lessee upon which the lease should be granted. Period of Lease: A lease may be from year to year, or month to month, or in perpetuity. Leases how made: A lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of immovable property may be made either by a registered instrument or by an oral agreement accompanied by delivery of possession. Where a lease of immovable property is made by a registered instrument, such instrument, or where there are more instruments than one, each such instrument, shall be executed by both the Lessor and the lessee. Payment of Stamp duty and Registration fee: A. (i) Stamp duty is payable on the instrument but not on the transaction. To ascertain the correct Stamp duty payable one has to see the intention of the document and words used in it. (ii) A general format has been designed for the help of the public concerned. Based on this format Stamp duty and Registration fee payable on this Lease-deed is as below Example 1. A residential / commercial / industrial shed / house etc. situated in Bangalore city when it is leased stamp duty and registration fee is calculated as follows: Sl. No. Particulars of lease The Schedule to Stamp Act, 1957 Article 30 1 (A) (a) Where rent is fixed and no premium is paid (i)Period of lease 11 months (ii)Rent fixed Rs.1, 000=00 per month. Article 30(1)(a)(i) (b) (i) Period of lease 5 years (ii) Rent fixed is Rs.1,000=00 per month Article 30(1)(a)(ii) (c) (i) Period of lease 10 years (ii)Rent fixed is Rs.1, 000=00 per month. Article 30(1)(a)(iii) (d) (i) Period of lease 20 years (ii)Rent fixed is Rs.1,000=00 per month Article 30(1)(a)(iv) (e) (i) Period of lease 30 years (ii) Rent fixed is Rs.1, 000=00 per month. Article 30(1)(a)(v) (f) (i) Period of lease is above 30 years (ii)Rent fixed is Rs.1, 000=00 per month. Article 30(1)(a)(vi) 2 (B) (a) Where entire rent / premium paid in advance. (i) Period of lease not exceeding30 years. (ii) Entire rent amount of Rs.30, 000 paid in advance. Article 30(1)(b)(i) (b) (i) Period of lease above 30 years. (ii) Entire rent amount of Rs.30,000 paid in advance. Article 30(1)(b)(ii) 3 (a) (i) Period of lease less than 30 years (ii) Rent amount of Rs.30, 000 paid in advance. and (iii) Agreed to pay monthly payment of Rs.500 Article 30(1)(c)(i) (b) (i) Period of lease above 30 years. (ii)Rent amount of Rs.30,000 paid in advance and (iii) Agreed to pay monthly payment of Rs.500 Article 30(1)(c)(ii) 4 Registration fee The Table of Fees  (2) When lessee undertakes to pay any recurring charges such as Government revenue, the landlord share of ceases, or the owner share of municipal rates or taxes which is by law recoverable from the Lessor, the amount so agreed to be paid by the lessee shall be deemed to be part of the rent. (3) Surcharge Duty @ of 3% or 2% as the case may be is livable if the lease is in perpetuity. The list of documents (enclosures) required to be produced at the time of presentation of the document before the jurisdictional Sub-Registrar. 1. An Identical copy of the Lease-deed. 2. Form No.1. (in duplicate) (If the lease is above 30 years)  (Prevention of Undervaluation of Instruments) Rules, 1977 to download Form No.1 3. Affidavit (in duplicate) (a) Affidavit shall state that “Registration of this document does not violate the notification issued under Section 22A of the Registration Act, 1908.” For Notification Oppose to Public Policy. (b) Affidavit shall be made on Document Sheet or on plain paper. Stamp duty of Rs.20=00 can be paid in cash at Sub-Registrar Office itself. (c) Sub-Registrar is empowered to attest affidavits as per Chapter IV –of the Karnataka Civil Rules of Practice, 1967.  5. Extract of assessment register of the property. This extract is necessary to assess the market value of the property.

This Article has been written by CMA Samir Biswal. He can be reached at cmasamirbiswal@gmail.com

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