A GUIDE TO RENT AGREEMENTS & TENANCY REGISTRATION IN PAKISTAN

RENT AGREEMENTS & TENANCY REGISTRATION IN PAKISTAN

When you are letting out, renting or offering a temporary occupation of your immoveable property such as house, apartment or godown etc. whether for commercial or residential use, you will need to execute a Rent Agreement which is also termed as Rent Deed and subsequentially this agreement needs to be register under tenancy registration laws in Pakistan. Here is a comprehensive guide from drafting a rent agreement to its registration and also a glimpse of rights and obligations of landlord and tenant.

Rent Laws In Pakistan

Tenancy laws in Pakistan falls under provincial domain meaning thereby that Provincial Government legislate and regulates laws pertaining to tenancy, also termed as (Karaya-dari, کرایہ داری).

There are rent laws regulating in all provinces in Pakistan, such as;

Punjab:

  • The Punjab Rented Premises Act, 2009
  • The Punjab Protection and Restoration of Tenancy Rights Act, 1950
  • The Punjab Tenancy Act, 1887

Sindh:

  • Sindh Rented Premises Ordinance, 1979

Khyber Pakhtunkhwa:

  • The Khyber Pakhtunkhwa Tenancy Act, 1950

Balochistan:

  • Balochistan Urban Rent Restriction Ordinance, 1959
  • Balochistan Tenancy Ordinance 1978

Rent Agreement in Pakistan

Rental Agreement, Rent Deed, or Tenancy Agreement are different terms, but all refer to an agreement executed between a landlord and a tenant. The essential guidelines for drafting such a rent deed can be taken from the Contract Act, 1872. It is registered under the Registration Act, 1908, and stamp duty is determined under the Stamp Act, 1899.

Is Creation and Registration of Tenancy Agreement Mandatory?

Yes, it is Mandatory. Section 5 of 2009 Act ordains that a landlord cannot rent out a property without a proper tenancy agreement, which must be presented to the Rent Registrar for registration and official record-keeping. The Rent Registrar will enter the details, affix an official seal, keep a copy, and return the original to the landlord.

However, this does not replace the legal requirement to register the agreement under property laws in Pakistan. A tenancy agreement recorded with the Rent Registrar, or its certified copy, serves as legal proof of the landlord-tenant relationship.

Any future agreements between the landlord and tenant must also be registered in the same manner.

Essential Ingredients of a Rent Agreement?

Rent Deed or Tenancy Agreement also knows as Karaya Nama or , کرایہ دار. there is no bar of language, you can draft rent agreement in urdu or English but a rental agreement format must contain all necessary particulars as per section 6 of the Punjab Rent Premises Act, 2009:

  • Landlord & Tenant Details
  • Property Description
  • Tenancy Duration
  • Rent Details (Rate, Increase, Due Date, Payment Method)
  • Landlord’s Bank Account (If rent is paid via bank)
  • Purpose of Rental (Residential, Commercial, etc.)
  • Advance Rent, Security, or Pagri (if any)
  • If rent is set for only part of the tenure, it remains the same unless stated otherwise.

Consequences of non-registration of a Rent Deed or Tenancy Agreement

All tenancy-related disputes are addressed by the Rent Tribunal, a special court established to resolve tenancy-related issues. Under Section 9 of the Act, failing to register a tenancy can have serious consequences. If the tenancy is not registered, the Rent Tribunal will not accept any applications. If a tenant wishes to file a case, they must first pay a fine equal to 5% of the property’s annual rent to the Government treasury. For a landlord, the fine is even higher—10% of the annual rent before the Tribunal will hear the case.

Tenancy Registration With Police Department

Tenancy registration with the Rent Registrar is different from tenancy registration with the police department. In the police department, it is more about submitting details of a temporary resident, such as in Punjab under the Punjab Information of Temporary Residents Act, 2015.

Provincial governments have established tenancy registration systems within their respective police departments. For example, in Punjab, the Police Khidmat Markaz has been developed to facilitate this process without hassle. Modern technology has also been integrated, allowing online registration.

The following documents are required:

  • Original and copy of the house owner’s CNIC
  • Original and copy of the tenant’s CNIC
  • Original and copy of the rent agreement
  • Affidavit
  • Photograph of the tenant

Rights and Obligations of a Landlord and Tenants

Tenancy laws secure both landlord and tenant rights; however, they also impose certain limits and obligations on both parties, which are as follows

Rights and Obligations of a Landlord

RightsObligations
Receive rent as per the tenancy agreement.Provide a certified copy of the tenancy agreement to the tenant.
Enter the premises with reasonable notice for inspection or repairs.Keep the premises in a habitable condition by making necessary repairs.
Take legal action if the tenant violates the agreement.Pay all taxes, fees, or charges levied on the premises.
Seek eviction if the tenant fails to fulfill obligations.Ensure that no utility, amenity, or easement is cut off without a valid reason.
Apply to the Rent Tribunal if the tenant fails to comply.Avoid unauthorized entry into the premises.

Rights and Obligations of a Tenant

RightsObligations
Live in the rented premises without disturbance.Keep the premises in the same condition as rented, except for normal wear and tear.
Have access to all agreed utilities and amenities.Use the premises only for the agreed purpose.
Request necessary repairs from the landlord.Allow the landlord to enter for inspection or repairs with reasonable notice.
Apply to the Rent Tribunal if the landlord fails to fulfill obligations.Hand over vacant possession after the tenancy ends.
Restore utilities if cut off unlawfully.Avoid causing nuisance to neighbors.
Not make structural changes without written consent from the landlord.
Follow tenancy agreement terms and pay rent on time.
Not to sublet the property, unless with the consent of Landlord.

Rent Increase Law In Pakistan

In Pakistan, the Urban Rent Restriction Ordinance, 1959 governs rent increases. Rent increases for residential properties are capped at 25% of the last paid rent, with adjustments only allowed every three years, unless the parties mutually agreed upon to do additions/alterations. For non-residential (commercial) properties, rent increases are automatically implemented every three years, also at a maximum of 25%. It is always best to explicitly outline the rate of increase in rent in the rental agreement to avoid disputes.

We have provided a comprehensive guide to help you understand the drafting and registration of a rent deed. However, if you still have any concerns, LEX is here to assist you. As professional lawyers, we offer expert legal services tailored to your needs. Please note that this guide is for informational purposes only and should not be considered legal advice or an alternative to professional consultation and may contain human errors. For personalized assistance, feel free to contact us or fill out the inquiry form on our website.

Frequently Asked Questions (FAQs)

1. What is the process for registering a rent agreement in Pakistan?

The landlord and tenant must first execute the agreement, then it will be presented to the Rent Registrar, where the details are recorded, an official seal is affixed. Rent deed must also be submitted before the nearby police station.

2. Is it mandatory to register a tenancy agreement under Pakistani law?

Yes, it is mandatory. Under Section 5 of the Punjab Rented Premises Act, 2009, a landlord cannot rent out a property without executing and registering a proper tenancy agreement.

3. What are the key details to include in a rent agreement in Pakistan?

A rent agreement in Pakistan should include, Landlord and tenant names and contact information, Property description, Tenancy duration, Rent details (rate, due date, payment method, and any increase clauses), Bank account details (if rent is paid via bank), Purpose of rental (e.g., residential or commercial), Advance rent or security deposit.

4. What are the consequences of not registering a tenancy agreement in Pakistan?

If a tenancy agreement is not registered, the Rent Tribunal will not accept any tenancy-related disputes or applications. Tenants or landlords wishing to file a case will need to pay a fine (5% for tenants and 10% for landlords of the property’s annual rent) before the case can be heard.

5. How much can rent be increased in Pakistan?

According to the Urban Rent Restriction Ordinance, 1959, the rent increase is capped to 25% of the last paid rent.

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