• Purchase of tenancy rights in Mumbai

I want to purchase tenancy rights. The current tenant is willing to transfer the rights for a lump sum consideration. 1) Whether any agreement is prepared for such transfer, if yes, will it be a tripartite agreement or with the landlord.
2) how would the deed be structured to get complete tax benefit.
Asked 8 years ago in Property Law
Religion: Hindu

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5 Answers

1) if you are plannning to purchase tenancy rights it has to be by registered ageeement

2) bare perusal of sub-section (1) of Section 55 of the Act shows that only the agreements which have been entered into between a landlord and a tenant or a licensee after the commencement of the Act are required to be in writing and are also required to be registered under the Registration Act, 1908.

3)tennant can surrender his tenancy rights to landlord

4) agreement can be entered into between you and landlord for tenancy of the premises

5) in alternative tripartite agreement can be entered into between tenant , you and landlord

Ajay Sethi
Advocate, Mumbai
100113 Answers
8174 Consultations

There is no specified percentage of the consideration to be paid to the landlord mentioned in the act

2) on demise of tenant his legal heirs can apply to landlord for transfer of tenancy in their favour

3) if landlord refuses file application before small causes court in this regard for declaration that they are tenants of the premises

Ajay Sethi
Advocate, Mumbai
100113 Answers
8174 Consultations

1.Transfer of tenancy or creation of sub-tenancy is not valid without the written consent of the landlord.

2.So make it a valid transfer it must be done through a tripartite agreement making the landlord a party to the agreement.

3.However here the tenancy automatically devolves upon the death of the original tenant on his legal heirs for which no permission of the landlord is required.

Devajyoti Barman
Advocate, Kolkata
23670 Answers
538 Consultations

1. The tenancy rights cannot be purchase nor it can be sold.

In an oral arrangement between the tenant and the landlord, you may get the rental agreement made in your favor by landlord cancelling the agreement with the previous tenant.

Legally you cannot do anything other than this.

2. No tripartite agreement will also be maintainable under this situation. If the original agreement permits the tenant to sublet the premises, then he can enter into a sub lease agreement with you.

T Kalaiselvan
Advocate, Vellore
90316 Answers
2515 Consultations

Tenancy rights are not inheritable.

Tenancy rights are heritable only for a specified period.

Under Sub-section (1) of Section 5 the tenancy rights are heritable for a period of five years and under Sub-section (2) of Section 5 the successor acquires a right to continue in possession as a tenant only for a period of one year. In fact the word used in Sub-section. (2) is, the successor shall acquire a right to continue in possession as a tenant for a limited period of one year. Strictly speaking it is not a tenancy right at all. It is a right to continue in possession as a tenant for a period of one year.

under Sub-section (1) of Section 5 for a period of five years, such a successor firstly should be ordinarily living as a member of the family up to the date of his death and secondly be dependant on the deceased tenant, The second proviso to Sub-section (1) of Section 5 makes it clear under what circumstances the aforesaid tenancy right shall not devolve upon a successor. Even if a successor satisfies the aforesaid dual legal requirement, if such a successor is owning or occupying a premises in the local area in relation to the premises let, then the tenancy right shall not devolve upon such successor. In those circumstances what should happen is provided in Sub-section (2) of Section 5. Such a successor would not inherit any right of tenancy, but such a successor shall acquire a right to continue in possession as a tenant for a limited period of one year from the date of death of the tenancy.

T Kalaiselvan
Advocate, Vellore
90316 Answers
2515 Consultations

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