Patna: In a move aimed at encouraging more people to opt for legally valid rent and lease agreements, the Bihar government is preparing to reduce registration charges by up to 50 percent. The Prohibition, Excise and Registration Department has formed a special committee to review the existing fee structure and suggest changes.
The committee has also been asked to recommend ways to spread awareness about the importance and benefits of registered rent and lease agreements so that more citizens follow the legal process.
Very Low Registration Despite High Number of Tenants
Currently, the number of registered rent agreements in Patna is extremely low. On average, only about 5,000 rent agreements are registered every year. According to the department, this figure should ideally run into lakhs.
Patna has around 3.10 lakh registered houses that pay holding tax. As per Patna Municipal Corporation data, more than 10 lakh tenants live in these houses, including both residential and commercial renters. Legally, all of them require a registered rent agreement. Despite this, only about 5,000 agreements are being registered annually across the city.
Officials say that most registered rent agreements are currently being done only at the Patna District Sub-Registrar Office and the Danapur Sub-Registrar Office. The practice is negligible in other parts of the state. Bihar has a total of 114 registration offices, but awareness and usage remain very limited outside Patna.
Notary Agreements Have No Legal Validity
Legal experts have clarified that rent or lease agreements done through a notary do not have legal standing.
“Under the Notary Act, there is no provision for rent or lease agreements. If a dispute arises, a notarised agreement is not treated as a legally valid document. Only agreements registered at the registration office are legally recognised, and court decisions are based on the terms mentioned in those documents,” said Anil Kumar Udyogi, advocate at Patna Civil Court.
Shekhar Neelam, retired DIG (Registration), Headquarters, Registration Department, Patna, said that even agreements for less than one year must be registered to get legal validity. “People follow the notary route because it is cheaper and quicker, but it has no legal value. Due to lack of awareness, citizens are not adopting the correct procedure,” he added.
How the Fee Structure Will Change
After the proposed reduction:
• Stamp duty will remain 0.5 percent of the total rent amount.
• Registration fee will be reduced to 1 percent of the total rent.
• On a total rent of ₹10 lakh, stamp duty will be ₹5,000.
• Registration fee will be ₹10,000.
• For a 10-year agreement, the total cost will come down to about ₹15,000.
Current Fee Structure
At present:
• Stamp duty is 0.5 percent of the total rent.
• Registration fee is 2 percent of the total rent.
• On a total rent of ₹10 lakh, stamp duty is ₹5,000.
• Registration fee is ₹20,000.
• For a 10-year agreement, the total cost is about ₹25,000.
The department believes that reducing charges and improving public awareness will push more landlords and tenants to register their agreements and avoid future legal complications.
