Leasing Laws in India

7/24/2019 Leasing Laws in India

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LEASING LAWS IN INDIA

PGPM 2015-17 Section D

Group 9

Arijit Nayak (15P189)

Gaura Gupta (15P199)

Mounica !"i##a (15P209)

Puneet" Putc"a (15P219)

Sarin $a%u (15P229)

&i'"a# Gara (15P29)


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INTRODUCTION

In India, there are two types of agreements that deal with tenancy

Lease Agreement

Leave & License Agreement

Lease Agreement covered by rent control laws

Amount of rent is evaluated by taking into consideration the cost of construction

of property and the market price of the land

Landlords- abide by the strict rent laws which apply to these agreements when

they rent accommodation with a 12 month lease

Leave & License Agreement only grants the tenant a license to occupy the

property for a period shorter than one year

ption to renew the lease, at the e!piration of the said period


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"he #ental control laws - prevent the landlords from overcharging

the tenants and protect the tenants from sudden or unfair eviction

Landlords need to show a reason, legally considered valid if theyintend to evict the tenant

Dra*t Mo+e# ,enancy Act 2015

Allows landlords to charge market rate from the tenants

allows them to increase the rent periodically by 1$% at the

e!piration of the rent agreement

Allows both the landlord and the tenant to mutually decide the

period for which the premises will be leased out

rovides that in case the tenancy period e!tends and it is not

renewed, the tenancy shall be deemed to be renewed on a month-to-

month basis for a period of si! months

rovides compensation to the landlord, which is double of the

monthly rent, if the tenant refuses to vacate the premises after his

tenancy has been terminated by order, notice or agreement


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TRANSFER OF PROPERTY ACT, 1882

"he "ransfer of roperty Act, 1''2 mainly deals with

transfer of immovable property

(oes not apply to transfers by the operation of law such

as transfer of immovable property necessitated by rder

of )ourt for insolvency or forfeiture among others

"he 1*+ sections contained within have been divided into

' chapters

Applies only to voluntary transfers


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OBJECTIVE

As per the preamble of the Act, the " Act, 1''2 is to amend

or regulate the law relating to transfer of property by the acts

of the parties

"he Act provides a clear, systematic and uniform law for the

transfer of immovable property

ith provision for inter-vivostransfers, the " Act, 1''2

provides a law parallel to the e!isting laws of testamentary and

intestate transfers

"he Act is not e!haustive and provides scope to apply the

principles of ustice, ./uity and 0ood )onscience if aparticular case is not governed by any provision of law


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SCOPE

.i/itation on ,ran'*er "he Act applies to transfer by

the act of parties and not by application of law

e/ption o* Mu'#i/ .a In case of a conflict

between the " Act, 1''2 and rules of uslim Law, the

latter will prevail

e/ption o* 3i"t' an+ 4nci+ent' )ertain incidents

of a contract or the essential nature of property are

e!emption from the operation of the Act by 3ection 2


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LEASE AGREEMENT Section 105of the ,ran'*er o* Property Acttalks about lease

A lease of immovable property is a tran'*er o* a ri"t to

en4oy such property, made for a certain ti/e epre'' or

i/p#ie+ or in perpetuity, in consideration of a price paid or

promised, or of money, a share of crops, service or any other

thing of value, to be rendered perio+ica##y or on 'peci*ie+occa'ion' to t"e tran'*eror %y t"e tran'*eree, who accepts

the transfer on such terms

"ransferor 5 lessor

"ransferee 5 lessee

rice 5 premium

oney, share, service or other thing to be so rendered 5 rent6


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F TUR S

Lessee ac/uires a transferable interest and can sub-lease

It is both heritable and transferable

Lessor and Lessee must be competent to contract and

cannot be the same person

3ub4ect matter of the lease must be specific immovable

property

TYP S

Absolute7rimary

(erivative73ub-lease78nder-lease

9i!ed term

eriodic Lease

Lease in perpetuity


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LICENSE License - a permissive right and is personal to the

grantee

FEATURES

A license is not connected with the ownership of land 7

property but creates only a personal right or obligation

A license cannot be transferred or assigned

License is purely permissive right arising only by

permission, e!press or implied, and not by adverse

e!ercise or in any other way

It only legali:e a certain act which would otherwise be

unlawful and does not confer any interest in the

property itself


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Lease Vs. Lie!se.AS .4!NS

"ransfer of an interest ere permission to do something without any

transfer of interest

;oth transferable and heritable


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Ri"#$s a!% &ia'i&i$ies () $#e Less(* ;ound to disclose to the lessee any material defect in the

property, with reference to its intended use, of which theformer is and the latter is not aware, and which the latter

could not with ordinary care discover

;ound on the lessee=s re/uest to put him in possession of

the property "he lessor shall be deemed to contract with the lessee

that, if the latter pays the rent reserved by the lease and

performs the contracts binding on the lessee, he may hold

the property during the time limited by the lease withoutinterruption


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Ri"#$s a!% &ia'i&i$ies () $#e Lessee If during the continuance of the lease any accession is made to the

property, such accession shall be deemed to be comprised in the lease

If by fire, tempest or flood, or violence of an army or of a mob, or other

irresistible force, any material part of the property is wholly destroyed or

rendered substantially and permanently unfit for the purposes for which

it was let, the lease shall, at the option of the lessee, be void provided

that, if the in/uiry be occasioned by the wrongful act or default of the

lessee, he shall not be entitled to avail himself of the benefit of thisprovision

If the lessor neglects to make, within a reasonable time after notice, any

repairs which he is bound to make to the property, the lessee may make

the same himself, and deduct the e!pense of such repairs with interest

from the rent, or otherwise recover it from the lessor If the lessor neglects to make any payment which he is bound to make,

and which, if not made by him, is recoverable from the lessee or against

the property, the lessee may make such payment himself, and deduct it

with interest from the rent, or otherwise recover it from the lessor


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Ri"#$s a!% &ia'i&i$ies () $#e Lessee "he lessee may, even after the determination of the lease remove, at any

time whilst he is in possession of the property but not afterwards, all thingswhich he has attached to the earth> provided he leaves the property in the

state in which he received it

hen a lease of uncertain duration determines by any means e!cept by the

fault of the lessee, he or his legal representative is entitled to all the crops

planted or sown by the lessee and growing upon the property when the

lease determines, and to free ingress and egress to gather and carry them

"he lessee may transfer absolutely or by way of mortgage or sub-lease the

whole or any part of his interest in the property, and any transferee of such

interest or part may again transfer it6 "he lessee shall not, by reason only of

such transfer, cease to be sub4ect to any of the liabilities attaching to the

lease "he lessee is bound to disclose to the lessor any fact as to the nature or

e!tent of the interest which the lessee is about to take> of which the lessee

is and the lessor is not aware, and which materially increases the value of

such interest


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Ri"#$s a!% &ia'i&i$ies () $#e Lessee "he lessee is bound to pay or tender, at the proper time and place, the

premium or rent to the lessor or his agent in this behalf "he lessee is bound to keep, and on the termination of the lease to

restore, the property in as good condition as it was in at the time when

he was put in possession, sub4ect only to the changes caused by

reasonable wear and tear or irresistible force, and to allow the lessor

and his agents, at all reasonable times during the term, to enter upon

the property and inspect the condition thereof and give or leave notice

of any defect in such condition> and, when such defect has been caused

by any act or default on the part of the lessee, his servants or agents, he

is bound to make it good within three months after such notice has

been given or left

If the lessee becomes aware of any proceeding to recover the property

or any part thereof, or of any encroachment made upon, or any

interference with, the lessor=s rights concerning such property, he is

bound to give, with reasonable diligence, notice thereof to the lessor


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Ri"#$s a!% &ia'i&i$ies () $#e Lessee "he lessee may use the property and its products ?if any@ as a

person of ordinary prudence would use them if they were hisown> but he must not use, or permit another to use, the

property for a purpose other than that for which it was leased,

or fell or sell timber, pull down or damage buildings belonging

to the lessor, or work mines or /uarries not open when the

lease was granted, or commit any other act which is destructiveor permanently in4urious thereto

e must not, without the lessor=s consent, erect on the property

any permanent structure, e!cept for agricultural purposes

n the determination of the lease, the lessee is bound to put thelessor into possession of the property


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MODES OF DETERMINATION OF LEASE3ection 111 of "ransfer of roperty Act 1''2 defines modes as

A lease of immovable property determines-

by efflu! of the time limited thereby

where such time is limited conditionally on the happening of some event-by

the happening of such event

where the interest of the lessor in the property terminates on, or his power

to dispose of the same e!tends only to, the happening of any event-by thehappening of such event

in case the interests of the lessee and the lessor in the whole of the property

become vested at the same time in one person in the same right

by e!press surrender, in case the lessee yields up his interest under the lease

to the lessor, by mutual agreement between themby implied surrender

by forfeiture

on e!piration of notice to determine the lease, or to /uit or of intention to

/uit, the property leased duly given by one party to the other


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RENTAL AGREEMENTS,er/' o* 3enta# Aree/ent

Amount of rent to be paid every month

"he amount of safety deposit to be paid to the owner on a

return basis

eriod of rental agreement


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Na+%e( L(+a! L(%#i -s Na*+a%a'ai a!% O$#e*s4n+ii+ua#' in t"e ca'e(efendant


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n 1'th August, 1'+$, Ibrahim sold his tenancy rights to one 0irdhari

;alaram Lodhi for #s6 +,EEE6 "he sale deed provided that in default of

payment of rent to #amabai or her heirs, the purchaser would have no rights

over the property

In the year 1E1*, rent for si! years was in arrears6 Binayakbhat filed 3uit in

the court of the II )lass 3ub-udge, oona, against the present defendants

on the ground of forfeiture

(efendant


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It was alleged in the plaint that the rent due on 2'th anuary,

1EG1, was not paid, though demanded6 laintiff asked for

possession of survey


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JUDGEMENT

,34A. !63, 6DGMN,

"he trial court decreed the plaintiff=s suit6 In awarding ossession

of the entire property to the plaintiff the trial court imposed a

condition that defendant


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6DGMN, D4S,34!, !63, "he lower appellate court confirmed the decree of the trial court with

two modifications6 (efendant


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Leasing Laws in India

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