Urgent need legal advice on lease agreement-
Querist :
Anonymous
(Querist) 23 October 2011
This query is : Resolved
One 60 year’s old retired man signed a lease agreement of his commercial property without consulting legal adviser in the state of Rajasthan. Agreement bounds him to offer to buy property first to Lessee Company in the event to sell the property. He is not having any residential property & living on rent He also has 2 married sons unemployed. Can he file a sue to quash the lease agreement & force to the lessee to leave the property? If yes, then on what ground & what are the possibly of success? The agreement has completed 3 years & Lessee Company is paying rent on almost date 25 th or later every month .after completion of 3 year lessee were supposed to pay rent with increased amount but still sending old rent value cheques from past 5-6 months. The lease agreement has not been registered yet. I would appreciate any advise on this matter.thanks.
The lease agreement is having these condition clauses-
Tenure-
The lessor has granted lease to the lessee for the use, occupation and enjoyment of the said premises for a period of 9 (nine) years from the date of execution of this lease agreement (hereinafter referred to as “the said lease period”)
Rent
The lessee shall pay to the lessor Rs**** per month by way of rent inclusive of service tax for the use ,occupation and enjoyment of the said premises on or before 10 th day of each English calendar month in advance by an account payee cheque drawn in favor of the lessor. the rent shall be subject to deduction of tax at source (TDS)under the income tax act, 1961 and the lessee shall furnish to the lessor certificate of tax deduction at source within the period stipulated in the income tax act, 1961 and the rules made thereunder. The rent shall be increased by 15 % every 3 year during said lease period of the agreement.
Termination-
1.It is agreed by the parties hereto that the lessee will be expending substantial amounts in carrying out the work of renovation in the said premises including installation of furniture ,fittings, equipments and appliances for carrying out the said business from the said premises and therefore in consideration of these circumstances ,the lessor hereby agrees and covenants with the lessee that the lessor shall not be entitled to terminate this agreement earlier than the said lease period save and except in the event the lessee defaults in making payments of rent to the lessor for consecutive two months ,provided that the power of termination shall not be exercised unless and until the lessor has given to the lessee 30 days notice in writing of such default by registered post with acknowledgement due of the lessor`s intention to terminate this agreement and specifying the amount in arrears and the lessee defaults in paying in amount in arrears within 30 days after the receipt of such notice. If the amount in arrears specified in the notice is paid by the lessee within the notice period of 30 days, the notice shall stand withdrawn.
2. the lessee may after the expiration of 1 (one)year from the date of execution of this agreement (lock-in-period) ,by giving three months` notice in writing to the lessor terminate this agreement and on the expiry of the said notice period this agreement shall stand terminated.
General provisions-
The lessor agrees & undertakes that in the event of sale, assignment or transfer of the said premises, the purchase /transferee shall step into the shoes of the lessor in all respect & that such sale, assignment or transfer shall be subject to this lease agreement and further shall not in any way after, restrict, limit or curtail the rights of the lessee granted under this lease agreement. However, the lessee shall have the pre-emptive right to purchase the said premises and in the event, the lessee decides not to exercise the right of pre-emption, then only it shall be lawful for the lessor to sell or otherwise transfer the said premises to any other person whatsoever.
ajay sethi
(Expert) 23 October 2011
1) lease agreement is required to be registered. un registered agreement is not admissible in evidence
2) if agreement provides for increase in lease after 3 years and lesee fails to pay he has commited breach of terms of the agreement . you should call upon him to pay 15%increased rent
3)agreement provides for termination by lesee only after completion of one year after giving 3 months notice . no power has been given to lessor to terminate agrement before eexpiry of term ie 9 years .
4)you cn ainform leseee that you have receievd an offer for purchase of property . the rate should be 50^%more than market rate . the lesee may decline to exercise his right of premeption . in such a case you cna validly sell the property .
5) your best remedy is to ask for 15%increase in rent a s per provision in agreement . get increased rent and stay in peace
6) if lesee fails to pay increased rent you cna issue him notice for termination . but be prepared then for a messy legal battle ahead
Querist :
Anonymous
(Querist) 24 October 2011
I thank you again for your kind guidance.
It means that eviction sues on personal necessity ground & the violation of contract (paying rent after due date and not paying increased rent) are not solid enough to regain the property.
As it has been year s the contract not registered, what to do if they reuse and delay, if asked them to register the agreement?
Is it as per rent law of Rajasthan having condition in agreement bounding lessor to first offer lessee the property if intended to sell? Is it not a violation of basis rights of lessor?in case if eviction not possible ,is it not possible to ask in court to exclude at least this condition from the agreement?
If offered the property to lessee on higher prices first and later (after their refusal) sold & registered to other party on lower rates? Is it possible that lessee deposit the amount equal to the amount paid by third party in court and asks court to declare invalid the sale of the property to third party declaring them as owner? Any suggestion regarding this situation?
Regards
prabhakar singh
(Expert) 24 October 2011
If your lease is unregistered and was created for a period more than a year then it is illegal no covenant of it shall be enforced,
it shall be read for only for nature of possession of tenant as rent has been accepted so far your tenant is a defacto tenant who can be evicted after service of a legal notice u/s106 of T P Act
ajay sethi
(Expert) 24 October 2011
your client has duly signed the lease agreement . i have time and time again always advised querists to consult a lawyer before signing any document .
your best bet is to request lessee to appear for registartion of agreement .pay penalty and get the document registered . you need his cooperation .
if under contact parties have duly agreed that in event of sale right of first refusal is to be given to lessee then it is reasonable condition .
i have told you your document is inadmissible i n evidence as it is not registered . why should the ocurt intervene and strike out a resaobale condition of right to first refusal
Querist :
Anonymous
(Querist) 25 October 2011
I thank you all & appreciate for the guidance & for your valuable time.
Regards
Devajyoti Barman
(Expert) 26 October 2011
Yes I agree but only wish to add one thing and that is unregistered lease beyond a period of 1 year is not illegal nit does it touches the validity of the Will.
Only the deed does not get admissible without making payment of impounding fees if the dispute reaches the court
Querist :
Anonymous
(Querist) 27 October 2011
In any way these lease can be considered valid (registered) if lessor notify the lessee by any legal form to appear for registration ,in case of not appearing, to lessor deposit the impounding fee on his own part? As Barman sir mentioned.
Kindly note that lessee is a private limited company and the premises has been constructed year 2007 ,rented for commercial use & rent is more than 10,000 INR per month, the premises is situated in a city” having a population exceeding fifty thousand as per 1991 Census" .lease not registered ,this case it is legal to fill eviction sue under Rajasthan rent control act ? Anybody can suggest after reviewing the Rajasthan rent control act? Any more suggestion to adopt a best possible eviction strategy?
