What is a Lease agreement
The Lease agreement is a contract between the Lessor and Lessee which permits the lessee to use the property for a limited period of time which is owned by the Lessor. The consideration for the lease agreement shall be rent. The normal period of Lease agreement shall be 12 months or more and the registration is composer in that case.
Essential elements of Lease agreement
It is mandatory that the lease agreement should always be in written. It is very difficult to prove a oral agreement.
Caution on going for lease or rent
- Lessor possesses title over the property: The lessee should always ensure whether the lessor possesses a clear title over the property and whether he has got complete right to let the property for rent or lease.
- Encumbrance: whether the property is free from any legal encumbrances such as mortgage of prior rental existence.
A rental agreement shall always be for a period less than 11 months with an option to renew for a further period. Registration is not needed as in case of Rental Agreement.