Can a renewal clause in an expired lease be still valid?

Dear Mr. Somesh,

Bank cannot renew the lease Deed as stated in the lease Deed, since only the Lessor can renew the lease in favour of the lessee, morover the clause itself wrong as it must be drafted like the Lease Deed shall be renewed for a further period of five years, on the mutual consent of the both the parties. or it may be like " Lease Deed shall be renewed for a period of further .. years at the option of the Lessor. The above said clause seems to be unilateral. i.e., onesided however the same was done with your grandfather's consent i.e., the Lessor consent. 

if your grandfather is there, ask him to give a notice(it may be legal) stating that you are terminating the Lease Deed with proper reasons.  is there termination clause in the Lease Deed. 

regards

S.Deepika,

Advocate

Thanks for your response Deepika.

There was no any ternination clause specifically called out in the lease deed. The lease deed was drafted by the bank and for a drastically very cheap rent. In a way my grandfather signed the agreement in complete ignorance. However the period of the lease has expired on 31st march of this year and the bank continues to enjoy the property paying the same rent. 

Upon sending multiple requests to renew the lease with higher rent, they recently sent a letter stating that our previous lease has a clause saying "bank SHALL have the option of renewing the lease for next five years under the same terms and conditions upon the end of the lease" and now they are invoking this clause."

Hence the bank want to invoke the caluse and renew the lease at same rent. 

So just understand your reply, are you saying that renewal clause has no value even though its written in a unilateral manner?

Also, since the lease has expired, does it make illegal for the bank to continue to stay at our permises? They automatically deposit the montly rent in our account. Should we refuse to accept the rent? What are the steps we need to take to make there stay illegal so that we can evict them.

The Bank is rightfully exercising its right for renewal of lease deed on existing terms and conditions as agreed upon. Under the terms of the same lease deed you have been accepting rent for the premises for the last five years ,how  now you can go back on the terms not favourable to you .you never challenged the terms of the lease deed for the last five years.

Somesh do you feel that the you will get vacate possession of your property by knowing cons and pros of your contract?

Better to hire a good lawyer and get some results.

Ajit,

So what are the option we have? Also note bank hasnt expressed interest for renewal of lease witin lease period. They only did after 4 months of the lease.

need to see ur lease deed before giving appropriate advise, if the bank has not sent you any request for renewal so far, then send them a terminating notice through a lawyer

I recommend you should not enter in to a long drawn litigation for vacation of your premises and instead you should contact your lessee for amicable ,compromise settlement.Had you started pressurising your lessee for vacation of premises at an early stage ,you must have obtained good results.I repeat compromise may be the best option under the circumstances.