21st, May, 2025

Why Are Rent Agreements Usually Created for 11 Months Only?

If you’ve ever rented a house or flat, you must have noticed that the rent agreement is usually made for 11 months. But why not 12 months or 1 year? Is there a legal reason or just a trend? In this blog, we will explain in simple words why rent agreements are made for 11 months, what the legal and financial implications are, and what tenants and landlords should know.

What is a Rent Agreement?

A rent agreement is a legal document signed between the landlord (property owner) and the tenant (person renting the property). It includes:

• Monthly rent amount

• Security deposit

• Duration of stay

• Rules and conditions of tenancy

Why is the Rent Agreement Usually for 11 Months?

Here’s the main reason:

To Avoid Mandatory Registration Under Rent Control Laws

In India, if a rental agreement is made for 12 months or more, it must be registered under the Registration Act, 1908. Registering the agreement involves:

• High stamp duty

• Registration charges

• Legal paperwork and time

1. High Stamp Duty

• Stamp duty is a tax imposed on legal documents, including rent agreements.

• The amount depends on the duration of the lease, monthly rent, security deposit, and the state’s stamp duty rates.

• For a 12-month or longer agreement, this duty can become quite costly, especially in metro cities.

• For example, in Maharashtra, stamp duty for a lease over 11 months can be 0.25% to 0.5% of the total rent + deposit amount.

2. Registration Charges

• In addition to stamp duty, a registration fee is charged for officially recording the rent agreement at the Sub-Registrar’s Office.

• These charges typically range from ₹1,000 to ₹5,000, depending on the state.

• This adds an extra financial burden on both the landlord and tenant, which many try to avoid for short-term agreements.

3. Legal Paperwork and Time

• A registered rent agreement requires:

• Drafting the lease in the required legal format

• Appointment and visit to the Sub-Registrar office

• ID and address proof submissions

• Biometric verification

• This process can take several hours or days, and involves legal formalities and travel, which many people find inconvenient—especially for short stays or informal arrangements.

To avoid these costs and legal formalities, landlords and tenants generally limit the rent agreement to 11 months.

Key Advantages of an 11-Month Rent Agreement

1. No Mandatory Registration

Agreements below 12 months don't require mandatory registration, saving time and money.

2. Low Stamp Duty

Stamp duty on 11-month agreements is much lower than for 12 months or longer agreements.

3. No Rent Control Act

Most rent control laws apply to leases of 12 months or more. By making it for 11 months, landlords can avoid certain legal obligations.

4. Flexibility to Renew or Modify

After 11 months, both parties can choose to:

• Renew the agreement

• Revise rent amount

• Modify terms if needed

What is Rent Control Act?

The Rent Control Act is a law in India that protects tenants from unfair rent hikes and eviction. But if your rental agreement is less than 12 months, these rules don’t automatically apply.

Hence, landlords prefer 11-month agreements to maintain more control over their property.

Is It Legal to Not Register the Rent Agreement?

Yes, an 11-month rent agreement on plain paper with stamp duty paid is considered legal and valid in India. However:

• For long-term rentals, it's safer to register the agreement

• Registered agreements hold more value in court, if disputes arise

What Details Are Usually Mentioned in an 11-Month Rent Agreement?

• Name and address of tenant and landlord

• Monthly rent and security deposit

• Duration (usually 11 months)

• Notice period

• Maintenance responsibilities

• Restrictions (e.g., no subletting)

Can You Renew the 11-Month Agreement?

Yes! After 11 months, the agreement can be:

• Renewed with same or new terms

• Extended for another 11 months

• Converted into a longer agreement (if required)

Tips for Tenants and Landlords

For Tenants:

• Always get a signed rent agreement

• Pay stamp duty to make it legally valid

• Check terms like rent hike, notice period, and deposit return

For Landlords:

• Draft agreement clearly

• Take proper ID proof from tenants

• Mention maintenance rules and restrictions

Conclusion

So, now you know why most rental agreements in India are made for 11 months. It’s a simple way to save on legal costs, avoid complications under the Rent Control Act, and keep things flexible for both tenant and landlord. Whether you're renting a house or giving it on rent, make sure your rent agreement is clear, fair, and legally valid.