A lease deed is an instrument to transfer the right to possession and enjoyment, though not the title, of immovable property, from the transferor to the transferee, in consideration of a price in the form of rent or premium. The transferor is called the Lessor and the transferee is called the lessee.
A residential lease deed is executed for the purpose of allowing the Lessee to possess and reside at the premises for a certain period of time in return for rent. A Lease Deed protects the interest of the Lessor by placing restraints on the Lessee, and also of the Lessee by providing them legal rights to enjoy the peaceful possession of the premises.
Frequently Asked Questions
1. Is registration of the lease deed mandatory?
Section 17 of the Registration Act 190 provides that the registration of a lease deed of immovable property is mandatory if the lease period is for a duration exceeding 12 months. However, lease deed below a year is not required to be registered. Registration, however, is advisable in both cases as a registered deed has a higher evidentiary value in the courts of law.
2. Can restraints be placed on the use of the property by the tenant?
Section 108(o) of the Transfer of Property Act 1882 provides that the lessee may use the leased property as a man of ordinary prudence would use them if they were his own; but the lessee must not use, or permit another to use, the property for any other purpose other than for which it was leased. The Lessee cannot use the leased property in violation of the lease deed or any activity that may cause destruction to the property.
3. Can the property be transferred by the Lessor if it is leased?
Under section 109 of the Transfer of Property Act 1882, the Lessor can transfer the leased property to another person (the “transferee”), who shall then be subject to the rights and liabilities as of the Lessor, post the transfer. However, such transfer of leased property can be limited as per the terms of the lease deed executed between the Lessor and Lessee.
4. Does leasing the property to the Tenant/ Lessee allow them to further lease the property?
Under section 108(j) of Transfer of Property Act 1882, the lessee may sub-lease, mortgage or assign his interest in the leased property, however, the lessee by not, by reason of such transfer, cease to be the subject to any of the liabilities attaching to the lease. This right of the lessee is subject to the terms of the lease deed, which may place restraints on the lessee.
5. Can the Lessor access the property during the tenure of the lease?
Under section 108(m) of the Transfer of Property Act 1882, the Lessor may enter and access the property and inspect the condition of the property at reasonable times.
6. I am renting an apartment to a family member, should I enter into a lease deed?
While there is no law that mandates the requirement of entering into a lease deed when renting an apartment to a family member, it is advisable that a deed is executed to protect the interests of the parties.