Lease Deed Registration - How to create step by step

Lease deed is a legal contract whereby an owner (lessor) lets out immovable property to a tenant (lessee) for a fixed term, fixed rent, and conditions. It protects both sides if it goes wrong for them later.

 Step-by-Step: How to Prepare a Lease Deed

1. Decide on the basics of the deal

Agree verbally or by email/WhatsApp like this to:

• Who are the parties (owner and tenant)
• Property address and exact area to be leased
• Rent amount, security deposit and when is rent due
• Term of a lease (months/years) and when it starts
• Who pays utilities, property tax, repairs, maintenance
• Special restrictions (pets, subletting, commercial use, etc.)

2. Do due diligence (very important)

• Buyer/Tenant: - Ask the seller for proof of title, the latest sale deed, an encumbrance certificate, a property tax receipt, and ID proof.
• Owner: Tenant by checking ID, proof of income/employment, and references.
• Flats: check society NOC or building rules about renting; for commercial, check Zoning/land-use permissions.

3. Prepare a draft lease deed

Either:

• Use a lawyer/advocate (recommended for long/commercial leases), or
• Use a clear template and fill in details (fine for short residential leases).

Typing draft must be clear and legible, along with including all key clauses (see list below).

4. Decide stamp duty & registration

• Stamp duty is required on the lease instrument, and the rates/method (total rent or annual rent basis) vary by state.
• Registration: Generally in India, leases for more than a year will need to be registered at the sub-registrar. (If in doubt, always check with local state rules.).
• Pay stamp duty BEFORE signing (or according to local practice). Schedule the appointment at the sub-registrar if the registration is required.

5. Signatures & witnesses

• Both parties sign the final deed in the presence of two witnesses (witnesses should sign and give their addresses).
• If registration is required, parties (or their authorised POAs) must appear for registration with identity proofs.

6. Register it (if required)

• Visit the local Sub-Registrar Office with original documents, IDs, stamp duty receipts and witnesses.
• Registrar will record/register the deed and return a stamped/registered copy. Keep the original registered copy safe.

7. Handover & inventory

• An inventory/condition report (photos + meter readings) signed by both sides created on the possession day. Tenant pays the security deposit and the first month’s rent as agreed.

8. Keep copies & notify

• Registered original copy and at least one copy each with the lessor and lessee should be kept. Local municipal/utility bodies can be notified if there is a requirement by a tenant (water/gas/electric connections).

Essential clauses to include (must-have)

• Parties (names, addresses, PAN/Aadhaar)
• Property details (address, boundaries, floor/flat no.)
• Term (start date, duration, extension/renewal terms)
• Rent & mode of payment (due date, late fee)
• Security deposit (amount, conditions for refund, interest)
• Use of property (residential/commercial and prohibitions)
• Maintenance & repairs (who pays what; routine vs major repairs)
• Utilities & taxes (who pays property tax, electricity, water, society charges)
• Alterations & subletting (allowed only with written permission?)
• Termination & notice period (how either party can terminate, notice length)
• Breach & remedies (penalties, eviction steps, forfeiture of deposit)
• Force majeure (what happens in lockdowns, natural calamities)
• Indemnity & liability (who is responsible for third-party claims)
• Dispute resolution & jurisdiction (arbitration or court; city jurisdiction)
• Registration & stamp duty clause (who bears cost)
• Signatures & witness details

Documentation Check List

Owner (Lessor)

• Original Sale Deed / Title Deed
• Latest Encumbrance Certificate (EC)
• Property Tax receipt/electricity bill
• ID proof (Aadhaar / PAN) and address proof
• Society NOC (for flats) or owner’s board resolution (if company)

Tenant (Lessee)

• ID & address proof (Aadhaar / Passport / Voter ID)
• PAN (for rent > above certain threshold)
• Passport-size photos
• Employment proof/salary slips (if landlord asks)
• Previous landlord reference (optional)

For registration

• Stamp Duty Receipt/e-stamp certificate
• Two witnesses' ID proofs
• PoA if any party not physically present

Typical Timeline

• Negotiation & due diligence: 1-7 days
• Drafting & review: 2-5 days (longer for complex/commercial)
• Stamp duty payment & registration appointment: 1-14 days depending on local office
• Handover & inventory: day of possession

Practical Tips 

• Always verify the owner title before payment of deposit.
• Do not hand over large amounts without a signed agreement (at least token advance + receipt).
• Require written consent for all structural alterations.
• Avoid verbal promises – get every concession in writing.
• Instruct the advocate at all times for long/commercial leases or high value.
• Query pending mortgages/loans on property (as mentioned in Encumbrance Certificate)
• Hold meter reading & photos to solve later disputes.

Above all Conditions hiring a lawyer

• Commercial lease or long-term (5+ years)
• High-value security deposits/high rents
• Very complicated title history or multiple ownerships
• When a PoA is used in place of the owner appearing in person

FAQs on Lease Deed and Registration

1. What is a lease deed?

A lease deed is a written contract where an owner (lessor) gives property to a tenant (lessee) for rent, for a fixed period under certain conditions.
Example: A shop owner leasing space for 3 years at ₹20,000/month.

2. Is it mandatory to register a lease deed?

Yes — if the lease term exceeds 11 months, registration is compulsory under the Registration Act.
Shorter leases (like 6 or 11 months) can be notarized instead.

3. What happens if a long lease deed is not registered?

It becomes invalid in court. You can’t enforce terms like rent recovery, eviction, or deposit refund legally.

4. Where do I register a lease deed?

At the local Sub-Registrar Office (SRO) in the area where the property is located.
Example: Delhi property → register at the Delhi SRO for that district.

5. Can a lease deed be registered online?

Yes, in many states — including Delhi, Maharashtra, Karnataka, Telangana, Haryana, etc.
You can start the process on:
Delhi: https://doris.delhigovt.nic.in
Maharashtra: https://igrmaharashtra.gov.in
Karnataka: https://www.kaveri.karnataka.gov.in/landing-page

6. How is stamp duty calculated?

Stamp duty varies by state and lease term — generally based on total rent for the lease period + deposit value.
Example: If rent is ₹10,000/month for 2 years → ₹2,40,000 total rent → duty charged on that.

7. Who pays the stamp duty and registration charges?

Usually shared or paid by the tenant, but it depends on mutual agreement. Mention it clearly in the deed.

8. Can lease deeds be executed on plain paper?

No. They must be on non-judicial stamp paper or e-stamp paper of proper value.

9. How many witnesses are needed?

Two witnesses are compulsory — both should sign and provide address proof.

10. What if the tenant doesn’t vacate after expiry?

The landlord must issue a legal notice and can approach a Rent Controller Court or Civil Court for eviction.

11. Can rent be increased automatically every year?

Only if mentioned in the lease deed.
Example: “Rent shall increase by 10% every 12 months.”

12. What if either party wants to end the lease early?

Include a termination clause specifying the notice period (commonly 1–3 months). Both can end it with written notice.

13. Is police verification required?

Yes — for safety, especially in cities like Delhi, Mumbai, and Bengaluru. Both tenant and landlord must submit ID proofs at the local police station or online.

14. Can the tenant sublet the property?

Only if the lease allows it in writing. Otherwise, it’s a breach of contract.

15. Who pays for maintenance and utilities?

Usually, tenants pay monthly utilities (electricity, water) while landlords handle property tax and major repairs. Mention this clearly in the deed.

16. What documents are needed for registration?

• Original lease deed
• ID & address proof of both parties
• Property ownership proof (Sale deed/tax receipt)
• Stamp duty receipt/e-stamp certificate
• 2 witnesses’ ID proofs

17. Can lease deeds be executed by Power of Attorney (PoA)?

Yes — but the PoA must itself be registered and valid for that property.

18. Can I modify or renew a registered lease deed?

Yes — by executing a fresh lease or a renewal deed mentioning revised terms.

19. What happens if rent is not paid?

The landlord can issue a notice of default as per the breach clause, terminate the lease, and file for eviction or recovery.

20. Can I use one lease deed format for all states?

No. Each state has its own stamp duty rate, registration process, and portal. Always check your state government website.