Lease or rent
Vijaya Bhaskar
(Querist) 04 September 2018
This query is : Resolved
Dear Learned Experts
We are a charitable trust working for the empowerment of persons with disabilities. We provide vocational training to persons with disabilities and various services. After training, we find it very difficult for job placement for the trainees.
However, a Pvt Ltd company, Garment Industry, came forward to provide job opportunities to the persons with disabilities subject to giving our premises for their garment industry.
Since there is a scope for employment, the trust is willing to give the trust premises for the garment industry which is permitted under our bylaws too.
The company is willing to pay the rent
Please guide us whether
1. Should we execute an 11 months lease agreement or 11 months rent agreement?
2. Can lease agreement be less than 11 months?
3. What are the risks involved by letting this property to the Pvt Ltd
4. What is the maximum rent we can charge under Law
Please suggest.
Kishor Mehta
(Expert) 04 September 2018
A Leave and license agreement can be registered for a period of maximum 5 years, for a greater period a Lease agreement has to be registered. These agreements will be governed by the prevailing laws of your State. The maximum chargeable rent will also depend on the current laws of your State.
kavksatyanarayana
(Expert) 04 September 2018
All leases shall be registerable documents in most states according to the Amendments from time to time. Usually the leases for less than year, lease for a period of from one year to 5 years, next 10 years like that. the Stamp duties varies from one State to State. the payable stamp duty shall be on Average Annual Rent value fixed according to the period as said above. The terms and conditions shall be mentioned clearly in the lease deed to avoid legal complications. Better to get lease deed drafted by an Advocate or a Senior Document Writer having knowledge in drafting the deed without legal complications.
Vijaya Bhaskar
(Querist) 04 September 2018
Thank you for your quick replies. We would like to have 11 months agreement. Can we have lease agreement for 11 months
BAALASUBRAMANNYAMM
(Expert) 05 September 2018
In addition to the above experts opinion, I am adding the following for your clarity.
If you go for Point Nos. 1 and 2, there is no need to go for registration of a Lease Deed. But the company will not accept for 11 months lease.
2. No possibility in giving assurance/s with regard to risks/disputes. There is every chance to raise a dispute either from both the Lessor and the Lessee during the lease period.
3. With regard to fixation rent, it is depending upon your bye-laws and as well as the mutual understanding of the parties.
Dr J C Vashista
(Expert) 09 September 2018
I fully agree with the analyses and appreciate advise of experts.
Do not take a chance for "unregistered" leave and licence agreement, which may be agreed for any period to time. Terms and conditions of the agreement should be drafted by a prudent lawyer and not a drafting person incorporating all (or maximum) legal covenants/requirements, which may be used subsequently (in case of any dispute) and amount of rent has to be going market rate with a scope for annual increase.
Consult a local prudent lawyer for better appreciation of facts, analyses, guidance and proper proceeding. If you are in Delhi and feel, may contact me at Ch. No 647, 6th Floor, Lawyer's Chamber Block, Dwarka Courts Complex, Sector 10, Dwarka, New Delhi-110075: email majjagdish@yahoo.com; Cell # 9891152939
Vijaya Bhaskar
(Querist) 09 September 2018
Thank you all for your valuable suggestions and guidance. This forum has always been a great helpful. Your service to the community is very much appreciated.
