Section 107 of TPA : Section 107: Leases How Made

Explanation using Example

Imagine Sarah wants to rent an apartment from John for a period of two years. According to Section 107 of The Transfer of Property Act, 1882, since the lease is for more than one year, they must have a registered instrument (a formal written legal document) to make the lease valid. They both go to a lawyer, draft the lease agreement, and then register it with the appropriate government authority to comply with the law. This registered document will then be signed by both Sarah (lessee) and John (lessor).

If, however, Sarah was renting the apartment for only six months, they could opt to simply have an oral agreement and Sarah could move in straight away, which would be legally binding as well without the need for registration, provided that possession of the property is indeed delivered to Sarah.