• Renewal clause in lease agreement

My late father had let out a part of his property to a bank in 2014 for 5 years. The lease agreement states that the bank has a unilateral right to renew in 2019 by paying 25% more rent. 

However, we are not interested in renewing - we want to re-construct the whole premises as it was constructed way back in 1981.

Can we refuse to renew in 2019, please?
Asked 1 year ago in Property Law from New Delhi, Delhi
Religion: Hindu

the terms of contract are sacrosanct

2) if you refuse to renew bank will refuse to vacate

3) you will have to file eviction suit

4) it would take years to be disposed of

Ajay Sethi
Advocate, Mumbai
66996 Answers
4045 Consultations

5.0 on 5.0

Yes you can refuse to renew better go through recitals of agreement and check for clauses where it may be mentioned that the leaser reserves right to renew the lease or may not extend the lease period. And also check for any clauses where it will be mentioned that you people can ask schedule premises after termination of contract period by giving reasonable time period notice.

If they refuse to vacate you may have to file suit for eviction.

Swarnarka Chowdhury
Advocate, Mysore
1769 Answers
4 Consultations

5.0 on 5.0

Hi..,

There must be a Termination Clause, under which you can terminate the Lease.

However, it is tough to answer without looking at the Contract itself.

Thanks.

Ramakant Singh
Advocate, Delhi
36 Answers
3 Consultations

4.0 on 5.0

1) Yes, if you don't want to go for renewal of lease agreement contract. You can end this lease agreement by sending them notice as you don't want to continue with agreement.

2) For safer side inform to them as well.

Ganesh Kadam
Advocate, Pune
7502 Answers
65 Consultations

4.9 on 5.0

Hello sir , you can terminate the lease deed by sending a prior legal notice to the leasee..kinldy share the lease deed for better guidance on the topic ...

Hemant Chaudhary
Advocate, Gurgaon
4259 Answers
31 Consultations

4.9 on 5.0

in the said case even the renewal period had expired . hence court passed order of eviction and granted company 6 months time to vacate the premises

Ajay Sethi
Advocate, Mumbai
66996 Answers
4045 Consultations

5.0 on 5.0

Is there a cancellation clause or eviction or termination clause ?

Debasmita Mitra
Advocate, Kolkata
33 Answers

4.0 on 5.0

There is a difference between 'renewal' and 'extension' of a Lease Agreement.

If the Lease agreement states the word 'renew', it means that the parties have to go back to square one and start the process again. It always require two parties to 'renew' an agreement.

If the agreement says the word 'renew', then you can take the benefit of ineffeciency of the previous scribe and drag the party to the court of law for the same.

If the agreement states the word 'extend', then one party can do that without the other without executing a new document.

Sagar Mongia
Advocate, New Delhi
7 Answers

4.0 on 5.0

Please note that renewal means both parties has to start with new agreement where you can reject to make new agreement and file suit for eviction by giving prior notice. Extension gives them right to extend lease. Anyhow since your father died as such you people being legal heirs can terminate it by giving advance notice.

Swarnarka Chowdhury
Advocate, Mysore
1769 Answers
4 Consultations

5.0 on 5.0

Dear Sir,

Firstly, the clause of reserving right of renewing with the bankers is against the principles of law. It is the land lord who is the owner of the property, his absolute rights cannot be taken away.

Secondly, it is about 40 years old building and get an endorsement from local authority that it is in dilapidated condition and requires immediate demolition.

Thirdly, you require building for re-construction the entire premises, for bonafide reasons. At the most the bankers may request for providing the some space for their occupation after its re-construction.

Viewing from any angle, you will win the case. Just get issue a legal notice (under section 106 of Transfer of Property Act) and ask them to vacate the premises on expiry of lease period, failing which suit for eviction may be filed.

Kishan Dutt Kalaskar
Advocate, Bangalore
4438 Answers
112 Consultations

5.0 on 5.0

It is a possibility that you don't renew the agreement but as the bank have right to renew by increasing rent for another 5 years then the lease will go in dispute and will take time to decide and if court is satisfied by the case then it may go in your favour.

Vimlesh Prasad Mishra
Advocate, Lucknow
5511 Answers
18 Consultations

4.9 on 5.0

1. The said renewal clause is one sided, hence can be challenged.

2. You can ask the bank to vacate the premises for your conducting the renovation work.

3. If the Bank refuses to vacate, you can file an eviction suit on appropriate ground.

Krishna Kishore Ganguly
Advocate, Kolkata
22519 Answers
595 Consultations

5.0 on 5.0

1. Any unilateral clause is bad at law, hence can be challenged.

2. File the eviction suit as advised in my earlier post citing the above Judgement.

Krishna Kishore Ganguly
Advocate, Kolkata
22519 Answers
595 Consultations

5.0 on 5.0

You can send them notice showing your interest not to renew the said lease agreement. You can provide them ample time for the same. If they are not evicting file eviction suit in court.

Prashant Nayak
Advocate, Mumbai
12939 Answers
23 Consultations

4.6 on 5.0

Yes you have all right to terminate giving valid reason for termination their are few judgment of SC that conform the stand of lessor /owner.

Ravi Kumar Singh
Advocate, Patna
49 Answers
1 Consultation

4.0 on 5.0

However, we are not interested in renewing - we want to re-construct the whole premises as it was constructed way back in 1981.

Can we refuse to renew in 2019, please?

The contents of the agreement, if it is a registered lease deed, has to be honored and complied with.

You can reject the offer to renew the lease deed if the same is executed by an unregistered document, the unregistered deed is not enforceable in court of law, hence the bank may not be able to fight it out successfully.

T Kalaiselvan
Advocate, Vellore
56740 Answers
705 Consultations

5.0 on 5.0

The agreement clearly mentions that only the bank has the right to renew, after increasing the rent by 25%. Landlord has no option.

However, there is 1 case - Bata India Ltd vs P Satyanarayana - with similar circumstances, wherein the AP High Court decided in favour of the landlord.

You first of all confirm that if the deed is a registered or unregistered deed.

The case referred by you is a different situation and may not applicable to your situation

T Kalaiselvan
Advocate, Vellore
56740 Answers
705 Consultations

5.0 on 5.0

Ye after the said duration you may deny for the renewal of the lease period

Anilesh Tewari
Advocate, New Delhi
16920 Answers
259 Consultations

5.0 on 5.0

It is advised that you send a notice with regards to this well in advance, so that they may make alternate arrangements for the same.

regards

Anilesh Tewari
Advocate, New Delhi
16920 Answers
259 Consultations

5.0 on 5.0

1. You can serve a Legal Notice for Termination of L&L agreement, even today, citing personal reasons. No need to wait till 2019.

2. Check the clauses of the L&L Agreement, before going forward.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
2430 Answers
14 Consultations

5.0 on 5.0

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