To terminate a registered lease deed, is it mandatory to get the termination agreement registered at Sub-registrar office?

Yes, it’s mandatory to register termination agreement at sub-registrar office

let me share my similar experience: 

One of my client owns a property in Bangalore and wants to lease this property. we found a lessee, the lease value is Rs.9.95 lakh and duration is 3 years. We registered the lease deed in Rajajinagar sub-registrar office.

Refer to be below registered Lease Deed:

Immediately after the registration, we extracted below encumbrance certificate (EC), Refer to the lease transaction in below EC

As mentioned above, the lease duration is 3 years. but before the end of 3 years, the owner decided to sell the property.

We found the buyer, the buyer paid down payment of Rs.2 Lakh to confirm the deal. We shared the property documents with buyer for verification. The buyer extracted the latest encumbrance certificate and found that there is lease transaction in property worth Rs.9.95 lakhs.

The buyer told us to remove the lease transaction in EC before we proceed to sale deed registration. Accordingly, we followed below procedure to remove lease transaction in EC:

As per our lease deed, we gave 2 months’ notice to our tenant. The tenant accepted our notice and vacated the property at the end of 2 months. We registered the “SURRENDER OF LEASE” in same Rajajinagar sub-registrar where we registered the Lease Deed earlier. Refer to below registered “Surrender of Lease”

Immediately after the registration of above “Surrender of Lease”, the owner refunded the lease value of Rs.9.95 lakh to tenant via DD, in sub-registrar office itself.

We extracted the below encumbrance certificate, we can see the “Lease Deed” in serial no. 1 and “Surrender of Lease” in serial no. 2. Refer to below image

It means that we successfully terminated our lease transaction

Note:

• If we hadn’t registered the ”Surrender of Lease” the lease transaction would still show open in encumbrance certificate and this would cause hindrance to sell our property. So. it’s mandatory to register “Surrender of Lease” in sub-registration to close the lease transaction in EC.
• Sometimes it’s easy to onboard a tenant but challenging to send them out. In that context, I would like to share the procedure for safe termination:

Step 1: Give the notice as per lease deed. Notice can be sent through email, SMS, WhatsApp or postal. Usually, the notice period is 1–3 months for residential property and 3–6 months for commercial property

Step 2: Tenant vacates the property

Step 3: Valuate the damages in property and share estimated cost to tenant for recovery of damage in property or inform the tenant to recover the damage on his/her cost before the surrender of property.

Step 4: Register the “Surrender of Lease” in sub-registrar office

Step 5: Refund the security deposit or lease amount to tenant

This completes the procedure

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We provide assistance for termination. Our service includes Notice + damage estimate + registration + facilitating refund. Please write to us +91-97424-79020

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