Rent agreement, step by step

The short answer

A rent agreement is made in eight steps: agree the terms; choose the right form for your state; draft every clause; pay stamp duty, often by e-stamp; register it if the law requires; sign with two witnesses; complete tenant verification where your city requires it; and record the deposit, the handover and every rent payment.

The two points people get wrong are registration and stamp duty. A lease for more than a year must be registered under the Registration Act, 1908, which is why most agreements are written for eleven months. In Maharashtra, leave and licence agreements must be registered whatever their term. Stamp duty is payable either way, at a rate your state sets.

Step 1: agree the terms before anyone drafts

Settle these in a message both sides can refer to: monthly rent and due date; security deposit and how many days after handover it is returned; lock-in and notice period for each side; escalation at renewal; who pays society maintenance, property tax, and minor and major repairs; who will live there; whether pets are allowed; and the move-in date.

If you are in a state that has adopted the Model Tenancy Act, 2021 or its own version of it, check what it says about deposits and about informing the rent authority. Several states have adopted versions; check your state's notified law rather than the model text.

Step 2: choose the right form

Most states use a rent agreement, which is a lease. In Maharashtra, homes are usually let on a leave and licence agreement, which grants permission to occupy rather than a tenancy and must be registered under section 55 of the Maharashtra Rent Control Act, 1999. For shops and offices, use a commercial lease, which deals with lock-in, escalation, maintenance charges, fit-out and restoration.

Our document formats include all three, each with notes on every clause.

Step 3: draft the agreement in full

Fill every blank: full names and addresses as on identity documents, the exact address and carpet area of the home, parking, rent in figures and words, deposit, dates, and the bank account for rent. Delete optional clauses you have not agreed rather than leaving them in.

Attach a schedule of fittings and fixtures, with photographs and meter readings, to be signed on move-in day. Most deposit disputes are settled by whether this record exists.

Clauses worth writing out rather than leaving to custom: a rupee limit for minor repairs that the tenant pays; who repairs seepage and concealed plumbing; how much notice the owner gives before an inspection; whether subletting or paying-guest use is allowed; what happens if rent is unpaid for a stated number of months; and that ordinary wear and tear is not deducted from the deposit. The rent agreement clauses guide explains the ones landlords and tenants argue about most.

Step 4: pay stamp duty or buy an e-stamp

Every state charges stamp duty on lease and licence agreements under its own stamp law, and the amount depends on the term, the rent and the deposit. Many states sell e-stamp certificates online or through authorised collection centres; in states using the Stock Holding Corporation of India's system, the certificate can be checked on its website. Some states also allow franking at banks or the purchase of stamp paper from licensed vendors.

Buy the stamp in the name of the party paying for it, before the agreement is signed, and print the agreement on it or attach the certificate. Check your state's rate on the stamp duty page first.

Step 5: registration or notarisation

Section 17(1)(d) of the Registration Act, 1908 requires a lease from year to year, for any term exceeding one year, or reserving a yearly rent to be registered, and section 107 of the Transfer of Property Act, 1882 says such leases can be made only by a registered instrument. An eleven-month agreement falls outside that, so outside Maharashtra it is commonly stamped and signed but not registered.

Registration is done at the sub-registrar's office where the property is, with both parties, two witnesses and identity documents, or online where the state offers it. In Maharashtra, leave and licence agreements must be registered whatever their term, and the Department of Registration and Stamps offers online registration for them.

Notarisation is different: a notary attests that the people signing are who they say they are. It does not register the document, and it is not a substitute where registration is required. Many landlords and tenants notarise eleven-month agreements anyway; it does no harm.

Step 6: sign with witnesses

Both parties sign every page, and two witnesses sign with their names and addresses. Each side keeps an original or a registered copy. The tenant should receive the signed agreement before paying the deposit, or against a receipt for it.

If the owner lives elsewhere and a relative or agent signs, ask for the authority in writing, ideally a registered power of attorney, and the owner's identity and title documents. A tenancy signed with someone who had no authority to let is the hardest kind to defend.

When the term ends, renew with a fresh agreement on fresh stamp paper rather than by carrying on. If the tenant is leaving, give notice in writing as the agreement requires, fix the inspection date, and repeat the fittings schedule on the day of handover.

Step 7: police tenant verification

Many cities require landlords to submit tenant details to the police, and many police forces accept the form online. The landlord usually submits it; the tenant provides identity documents and photographs. Check your city police's website for its procedure. Even where it is not mandatory, it costs little and protects both sides.

Step 8: deposit, handover and receipts

Pay the deposit and rent by bank transfer or UPI, and ask for a receipt each month. Tenants claiming house rent allowance need receipts, and employers ask for the landlord's PAN when the year's rent exceeds ₹1 lakh. The rent receipt generator makes a year's receipts at once.

On move-in day, both sides sign the fittings schedule with photographs and meter readings. On move-out, repeat it, and the deposit is returned within the days the agreement states, less only the deductions it allows.

Worked example (illustrative figures only): rent of ₹20,000 a month with a 5% increase on renewal becomes ₹21,000 in the second eleven-month term and ₹22,050 in the third (₹21,000 × 1.05). A deposit of ₹60,000 with an unpaid electricity bill of ₹1,800 and a broken window pane repaired for ₹2,500, both shown with bills, is refunded as ₹60,000 − ₹1,800 − ₹2,500 = ₹55,700. Repainting from ordinary wear is not deducted unless the agreement says so.

Common mistakes, questions to ask and documents

Common mistakes: paying the deposit before seeing the owner's identity and title; leaving 'as mutually agreed' for escalation; an open-ended deduction clause; no fittings schedule; renewing by word of mouth; and, in Maharashtra, not registering the leave and licence agreement.

Questions to ask: Who owns the property, and can I see the title document or tax receipt in that name? Who pays maintenance and repairs? How many days after handover is the deposit returned? Is registration required for this agreement in this state? Who submits police verification?

Documents: identity and address proof of both parties; owner's title document or latest property tax receipt; stamp paper or e-stamp certificate; signed agreement and fittings schedule with photographs; rent receipts or bank records; police verification acknowledgement where applicable.

Common questions

Sources

• Registration Act, 1908, section 17(1)(d)
• Transfer of Property Act, 1882, section 107
• Maharashtra Rent Control Act, 1999, section 55
• Model Tenancy Act, 2021 (Ministry of Housing and Urban Affairs) and state adaptations
• Central Board of Direct Taxes, annual circular on tax deduction from salaries (landlord's PAN for rent above ₹1 lakh a year)
• Your state's stamp act and its schedule for leases and licences

Last checked 2026-10-02.