• Premises owner not willing to refund advance

We rented a commercial premises in 2008 in Chennai and paid  Rs. 20 Lakhs advance to premises owner. Every month we paid  rent on time. As business was down  we served three months notice to premises owner on 20/08/2014 ( as per lease agreement) and they accepted it.
 
We vacated the premises after three months on 20/11/2014 and informed to premises owner  by phone , email and speed post to refund advance amount and take handover simultaneously. But owner replied by email that “  first you officially handover , then we shall inspect then we shall refund the advance. Until you handover rent will continue “ .
 
Our apprehension is ,  If we handover the premises without getting advance then owner may delay the refund payment . Please help us in this situation.
Asked 2 years ago in Property Law from Hyderabad, Andhra Pradesh
1)what is the clause  in lease deed regarding handing over possession and refund of Security deposit ? 

2) generally in lease deed provision is made for simultaneously handing over possession and refund of security deposit 

3) you can request the lessor to take inspection of premises  prior to handing over the keys of the premises . obtain in writing from licensor that he has taken inspection of the premises and no damage has been caused to the said premises by you . 

4) if the lessor refuses to return security deposit inspite of handing over possession file summary suit under order XXXVII of CPC
Ajay Sethi
Advocate, Mumbai
23116 Answers
1214 Consultations
5.0 on 5.0
A. Generally, we need for scrutiny of the terms and conditions of the lease deed in respect of Notice period, handing over possession, and Security Deposit.

B. Better fix a date for inspection of the premises to find out whether the premises damaged or not and fully restored as earlier position? Issue a notice by RPAD with respect to the same.

C. Thereafter, both parties will come to a conclusion regarding the condition of the premises as delivered the possession by the lessor at the time of handing over the premises. In case any damages found you are liable to pay the expenses, whatever incurred by the lessor. If damages not found, you are entitled to get the whole security deposit subject to clearance of arrears of rent and miscellaneous charges i.e, painting etc., but it should be mentioned in the lease agreement. However, don't hand over the premises unless obtain SD.

D. Perhaps, the lessor fails to pay the SD even though damages not found, you can approach the Court by filing recovery suit who is rightly pointed out by Mr. Ajay Sethi.
B.T. Ravi
Advocate, Bangalore
733 Answers
29 Consultations
5.0 on 5.0
1. If the lease deed is silent on the manner of hand over of the possession and refund of the security deposit then both the phenomenons shall take place simultaneously. The clause in sale deed, if any, with respect to the return of deposit and hand over of possession will take effect.

2. Lessor has the right to carry out, prior to refunding the security deposit, an inspection of the premises to ensure that no damage has been caused to the premises due to an act of the lessee. A lessee is liable to compensate the lessor for any damage caused to the premises due to his act. This is a right which cannot be denied to the lessor. 

3. If security deposit is not returned by the lessor even after possession being returned in accordance with the mode enshrined in the lease deed then you may file a lawsuit for recovery of money.
Ashish Davessar
Advocate, Jaipur
18057 Answers
445 Consultations
5.0 on 5.0
Hi,
 to finish it amicably, inform the owner  by sending him a notice that you want o hand over the premise and key officially, and fix a time.This notice can be send by you or through an advocate. This simple notice will show that the terms of the  deal and you are giving a notice of intimation of vacating the premise. In the notice mention that you have already given notice via email.
 if he does not pay you the amount of deposit, after handing over the possession ,you can recover it  by filing a suit in the court under 37 cpc.. Most of the cases a legal notice will do the work .He will  not resist much as the legal complications would be more to him.
 So do it officially and legally with the help of an advocate  so that the clauses in the agreement will be  understood well before taking the legal steps.
Thresiamma G. Mathew
Advocate, Mumbai
1316 Answers
85 Consultations
5.0 on 5.0
1. What has been mentioned in the tenancy agreement regarding the terms of handing over the possession of the premises back and refund of the advance amount paid?

2. Normally, a notice period is mentioned and possession and refund is exchanged simultaneously,

3. Send the landlord a legal notice asking him to make inspection of the premises and take possession of it and also simultaneously refund the advance amount,

4. If you do not get the refund, do not handover the possession and you should mention in your notice that you are not liable to pay any rent from the date fixed for inspection and if no refund of the advance amount is made to you,

5. After that you can sub rent the place if possible to recover your advance amount.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0
1)you have not answered the query raised by us . what is the clause in leave and licence agreement ? terms of contract are sacrosanct 

2) if agreement mentions it should be done simultaneously draw attention of licensor to said clause . inform him that as per the contract it should be done simultaneously .


3) if contract is silent ask him to take inspection of the commercial premises first . then you will hand over possession . and need your security deposit back .

4) if licensor refuses to see reason issue legal notice to him to return your security deposit and take possession of premises
Ajay Sethi
Advocate, Mumbai
23116 Answers
1214 Consultations
5.0 on 5.0
1. You send a legal notice to the owner asking him to inspect the premises on a particular day and take possession of it while refunding the advance amount on the spot if no damage to the property is found,

2. You also mention that you will not be liable to pay any rent if such inspection, taking over and refund is not conducted on that day,

3. If you have option to sub-let it and also think that the owner may not refund your advance, then it is justified that you should try to recover your advance paid by subletting the said property,

4. Since no clause for handing over possession and refund of advance is reportedly specified in the agreement, there is nothing you or the owner can ask the opposite side to perform specifically in this regard,

5. The owner may demand handing over first then inspection and refund & you may ask for inspection, handingover and refund simultaneously on the spot,

6. Since you are holding the possession, it is suggested that you hand it over to him only if he refunds the advance to you.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0
1. There is no lack of clarity in the reply. I have clearly stated that any clause in the lease deed, whereby and whereunder the manner of refund of security deposit has been delineated, will take effect. If either the lessor or lessee deviates therefrom the aggrieved party can approach the court for an appropriate relief.

2. If the lease deed is silent on the same then the possession and refund of security deposit is to take place simultaneously. You should tell the lessor to inspect the premises and then you will hand over the possession which should be followed by the return of security deposit.

3. If the lessor deviates from the lease deed, or does not return the security deposit even after the possession is handed to him then issue a lawyer's notice to him. 

4. If you retain the key with you then you will not get any relief from the court as one cannot take advantage of his own wrong.
Ashish Davessar
Advocate, Jaipur
18057 Answers
445 Consultations
5.0 on 5.0
A. All the legal experts on this blog are having same opinion, but the using the words and interpretation may be looks different manner.  The tenant has to be careful in exchanging vacant possession of the premises only against receipt of Security Deposit (subject to statutory deductions ). If he hands over the possession in good faith, without actually getting the deposit, the recovery of the security deposit can be a long haul for him. 

B. As discussed with earlier, issue a legal notice to the Owner to refund the Security Deposit without vacate the premises and mention that the tenant has no liable to pay any rent for continuation of possession of the premises and the Owner has to pay damages towards the non follow the legal procedures with respect to inspection of the premises.

C. Finally, What about the registration of the lease agreement? In case the lease agreement not registered, it is very difficult to approach the court because of your lease has been executed in the year 2008 i.e, more than 11 months must be registered. Hence, contact local advocate with respect to the same.
B.T. Ravi
Advocate, Bangalore
733 Answers
29 Consultations
5.0 on 5.0
premises is handed over to the owner then he should inspect it in "stipulated time". he is bound to return advance amount. if he refuses to return then you have right to claim that amount with interest from the date of  expiration of stipulated time. if there is indemnity clause in agreement then you compensate him but he can't hold  that amount  from the date when letting came to end. 
you should give a notice in this regard  thereafter file FIR or institute civil suit for recovery of money. if rent agreement is not registered then owner has no right to hold that security amount because unregistered deed does not make letting illegal. it is mere illegality and it can't harm the right of tenant.
Shivendra Pratap Singh
Advocate, Lucknow
2729 Answers
41 Consultations
4.9 on 5.0

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