Sunday, August 15, 2010

Is Anyone Following Rent Laws In Pakistan?

Concluding a rental agreement is part of the routine for a real estate agent. Unfortunately, there are many agents who despite having several years of experience conduct these deals in a manner that not only leaves both landlords and tenants dissatisfied, but also violates local rental laws.
Most tenants would like rental agreement s to be made for at least 12 months although there is no law limiting the maximum number of years of an agreement. However, the law requires all rental agreements of 12 or more months to be registered with the Area Registrar and the fixation of revenue stamps on the rental agreement. These fees are paid by the tenant.
In order to save on stamp duty and registration fee, both the landlord and the tenant sign an agreement for 11 months. The reality is that most tenants do not move from the premises in such a short periods it involves expenses and payment such as brokerage/service charges to an estate agent, as well as the cost of packing and moving.
This means that the landlord, tenants and estate agents who brokers the deal, all are equally responsible for evading government taxes which is a criminal offense.
The estate agent should ideally inform both the landlord and the tenant that the rental agreement should be signed for the actual term of tenancy; this will save both parties from incurring unnecessary expenses after 11 months. More importantly, this will prevent both parties, from breaking the law, which, at the end of the day, results in financial losers for the provincial government.
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