• 5 year lease for office space to tenant

I own a commercial property in Mumbai suburbs Bhandup. For leasing it the tenant needs the lease deed for 5 year period as it's a pharmaceutical firm. Is there any disadvantage in signing five year lease from the point of view of getting the property vacated.
Asked 2 years ago in Property Law
Religion: Hindu

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40 Answers

you cna execute lease deed for period of 5 years

2) however if there is lock in period you would not be able to evict lessee before expiry of 5 years

3) lease deed should be duly stamped and registered

Ajay Sethi
Advocate, Mumbai
79294 Answers
4742 Consultations

5.0 on 5.0

Hello,

There is no problem in getting a 5 years lease deed.

Just make sure that the lease deed is perused by a lawyer and the deed has the clear terms for termination of the contract.

Regards

Anilesh Tewari
Advocate, New Delhi
17847 Answers
312 Consultations

5.0 on 5.0

Yes, you can give property for lease for five years

Since if there is a clause property cannot be vacated than it shall cause prejudice to you as you cannot get it vacated before 5 years

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
111 Consultations

5.0 on 5.0

No problem to give it to lease for five years. Better get the lease deed registered and duly stamped from concerned sub registrar office.

Swarnarka Chowdhury
Advocate, Mysore
1878 Answers
5 Consultations

5.0 on 5.0

Does not makes a difference, whether you sign an agreement valid for 5 years or 1, as along as you are not locking your property. Do not lock-in your property, even if he insists. This was you'll be able to get the property after serving an advance eviction notice upon him.

Vibhanshu Srivastava
Advocate, New Delhi
9126 Answers
179 Consultations

5.0 on 5.0

No

Ramakant Singh
Advocate, Delhi
27 Answers
4 Consultations

4.0 on 5.0

Dear Client,

Even if property leased for 1 year, tenant can create ruckus at the time to vacate the rented property. So, Whether it may be for 1 year or 5 years, if tenant not agree to hand over the premises peacefully, same legal procedure and time will follow to evict the tenant.

All it need, the rent agreement to be duly registered and terms unambiguous.

Yogendra Singh Rajawat
Advocate, Jaipur
21402 Answers
31 Consultations

4.4 on 5.0

Dear Sir,

There is no disadvantage in 5 year lease.Before expiry period you send a written notice to tenant for vacant or new lease agreement.After expiry period you are entitled for vacant.Pharmaceutical firm license is renewed after five years.If license is not renewed then he is not entitled for running shop.

Rahul Sachdeva
Advocate, Moga
8 Answers

4.0 on 5.0

No there is nothing wrong in that please negotiate the clauses like rent & exit clause and any sublet clause.

Please rember to get the lease deed registered on payment of stamp duty.

Vimlesh Prasad Mishra
Advocate, Lucknow
6786 Answers
23 Consultations

4.9 on 5.0

No there is no disadvantage

Anwar Zaidi
Advocate, Mira Bhayandar
231 Answers

4.5 on 5.0

1.There is no danger in lease deed if its executed for 5 years.

2.However since the lease is for a specific period exceeding one year the deed has to be mandatorily registered.

3. Since the lease is for 5 years on expiry of time if the lessee refuses to vacate the property you can file a suit for eviction on the ground of efflux of time.

Devajyoti Barman
Advocate, Kolkata
21680 Answers
311 Consultations

5.0 on 5.0

Just to save the stamp duty.

Ramakant Singh
Advocate, Delhi
27 Answers
4 Consultations

4.0 on 5.0

Sir that is for personal property to increase rent arrears for renting as prizes increase fast in resident areas for rent also termination of agreement commercial property the company need it for time being as it cant change addresses every now then there is no risk involved in lease for 5 years.and every years rent increase can be mentioned in the agreement.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
111 Consultations

5.0 on 5.0

Because a lease agreement for a duration of 11months and less does not attracts payment of stamp duty.

Vibhanshu Srivastava
Advocate, New Delhi
9126 Answers
179 Consultations

5.0 on 5.0

You are confusing between Leave and licence agreement and lease deed

2) leave and licence agreement are made for period of 11months or so

Ajay Sethi
Advocate, Mumbai
79294 Answers
4742 Consultations

5.0 on 5.0

Common people are not aware of law

Anwar Zaidi
Advocate, Mira Bhayandar
231 Answers

4.5 on 5.0

1. For giving your property on lease for more than one year, you shall have to register the said lease deed otherwise it will not be valid in the eyes of law.

2. If the lease holder does not want to vacate your premises, your getting the lease deed for 5 years will not be a disadvantage to vacate the lease holder with due process of law by filing the eviction suit.

Krishna Kishore Ganguly
Advocate, Kolkata
24708 Answers
701 Consultations

5.0 on 5.0

1. As explained in my earlier post, lease deed for a period of more than 12 months requires registration.

2. Lease agreement for 11 years is executed generally to avoid registration.

Krishna Kishore Ganguly
Advocate, Kolkata
24708 Answers
701 Consultations

5.0 on 5.0

Sir agreement for 11 months is unregistered agreement. Any agreement above 11 months needs to be registered. There is no problem if the agreement is registered beyond period of 11 months. Please go through this provision

17. Documents of which registration is compulsory

The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877 or this Act came or comes into force, namely:-

d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;

As such to avoid you from hassles of registration they may have asked you to do it for 11 months rather than 12 months and above.

Swarnarka Chowdhury
Advocate, Mysore
1878 Answers
5 Consultations

5.0 on 5.0

Making a leave and license agreement for 11 months would not give any benefit if you wish to gain long term income out of it.

If it is made for 5 years then registering the lease deed is mandatory.

Devajyoti Barman
Advocate, Kolkata
21680 Answers
311 Consultations

5.0 on 5.0

Difference:

Under leave and license agreements, the legal ownership and the possession of the property remains with the licensor. Under a lease or rent agreement, the tenant generally has exclusive possession with respect to the property. In other words, a license does not create any interest in the premises in favour of the licensee.

A licensee cannot give the premises on rent to a third party under any circumstances. On the other hand, a tenant can sub-let the premises to a third party, unless the rental agreement expressly provides otherwise. A leave and license agreement is easier to terminate and enforce compared to rent agreement.

In the case of a lease agreement, if the agreement is for a period of less than 12 months, it does not have to be registered. However, a lease agreement for 12 months and beyond has to be compulsorily registered. In many states, a license agreement does not have to be registered.

Sign a leave and license agreement.

Vibhanshu Srivastava
Advocate, New Delhi
9126 Answers
179 Consultations

5.0 on 5.0

Under license agreements, the legal ownership and the possession of the property remain with the licensor though it indirect. Under a lease agreement, the tenant generally has exclusive possession with respect to the property. In other words, a license does not create any interest in the premises in favor of the licensee.

A license agreement is easier to terminate than a rent agreement. License agreements are terminable, whereas lease agreements are generally not

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
111 Consultations

5.0 on 5.0

Lease, defined under Section 105 of The Transfer of Property Act, 1882, is a transfer of the right to enjoy the concerned property for a pre-defined time period or in perpetuity. The lessor (owner of the property) gives the lessee (the one leasing the property) such consideration periodically, usually at the beginning or end of a lease agreement. License is defined in Section 52 of the Indian Easements Act,1882. License does not allow any interest in the premises on the licensee's part. It merely gives the licensee the right to use and occupy the premises for a limited duration.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
111 Consultations

5.0 on 5.0

If you are going for company get a lease drafted by lawyer there shall be no issue.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
111 Consultations

5.0 on 5.0

You can enter into lease deed for period of 5 years

2) Under license agreements, the legal ownership and the possession of the property remain with the licensor. Under a lease agreement, the tenant generally has exclusive possession with respect to the property.

Ajay Sethi
Advocate, Mumbai
79294 Answers
4742 Consultations

5.0 on 5.0

Dear Sir,

It is better to enter into eleven month lease with a assurance that it will be continued for next five years. A clause may be introduced for any reason if it is not continued then you are liable to pay Rs. 1 lakh (this clause is for convincing your prospective tenant). If you enter into five year license then you have to face some troubles in future since every day the rules are being changed in property matters.

A Lease, defined under Section 105 of The Transfer of Property Act, 1882, is a transfer of the right to enjoy the concerned property for a pre-defined time period or in perpetuity. The lessor (owner of the property) gives the lessee (the one leasing the property) such consideration periodically, usually at the beginning or end of a lease agreement.

License is defined in Section 52 of the Indian Easements Act,1882. License does not allow any interest in the premises on the licensee's part. It merely gives the licensee the right to use and occupy the premises for a limited duration.

A lease deed needs to be stamped and registered. The amount payable towards the lease deed's stamp duty is more than that payable towards the Leave and License's. For a period exceeding three years, the stamp duty is same for both agreements.

Kishan Dutt Kalaskar
Advocate, Bangalore
5583 Answers
218 Consultations

4.8 on 5.0

Sir as per your question for renting property lease and licence both option are available in license the owner has more power, in lease there is locking period as the company cant now then change address but in lease also you have all the rights and in a well drafted lease agreement there shall be no problem any time in future.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
111 Consultations

5.0 on 5.0

Any lease executed for more than 11 months are compulsorily be registered with sub registrar that cost 2% stamp duty of yearly rent. And unregistered deed is inadmissible in evidence if dispute any reach to court.

Under license agreements, the legal ownership and the possession of the property remain with the licensor. Under a lease agreement, the tenant generally has exclusive possession with respect to the property. In other words, a license does not create any interest in the premises in favor of the licensee

Yogendra Singh Rajawat
Advocate, Jaipur
21402 Answers
31 Consultations

4.4 on 5.0

advisable to enter into leave and licence agreement for period of 5 years with lock in clause

Ajay Sethi
Advocate, Mumbai
79294 Answers
4742 Consultations

5.0 on 5.0

The amount payable towards stamp duty is more for a lease agreement as compared to a leave and license agreement. But for duration of more than three years, the stamp duty payable is the same for both.

Under license agreements, the legal ownership and the possession of the property remain with the licensor. Under a lease agreement, the tenant generally has exclusive possession with respect to the property.

You can make leave and licence agreement but problem is tenant may not agree since as stated above he will get possession of property to carry out his business properly under lease deed.

Swarnarka Chowdhury
Advocate, Mysore
1878 Answers
5 Consultations

5.0 on 5.0

The registered 5 years lease agreement deed with the clause that it is not renewable shall be very safe and it will be easy for evicting the reluctant tenant after the expiration of the lease period.

T Kalaiselvan
Advocate, Vellore
69328 Answers
929 Consultations

5.0 on 5.0

If all lawyers say that there is no problem in signing for 5 year lease agreement than why everyone thinks that it is not safe to sign lease for more than 11 months and most lease agreements are made for 11 months.

11 months agreement is for rent and not for lease

The lease agreement for 5 years by getting it registered with clauses agreed by both the sides is a valid agreement.

T Kalaiselvan
Advocate, Vellore
69328 Answers
929 Consultations

5.0 on 5.0

For renting out a commercial property do we need to make a lease deed or leave and license agreement. What's the difference between the two.

Under license agreements, the legal ownership and the possession of the property remain with the licensor. Under a lease agreement, the tenant generally has exclusive possession with respect to the property. In other words, a license does not create any interest in the premises in favor of the licensee.

A licensee cannot give the premises on rent to a third party under any circumstances. On the other hand, a tenant can sub-let the premises to a third party, unless the rental agreement expressly provides otherwise.

A license agreement is easier to terminate than a rent agreement. License agreements are terminable, whereas lease agreements are generally not.

The amount payable towards stamp duty is more for a lease agreement as compared to a leave and license agreement. But for duration of more than three years, the stamp duty payable is the same for both.

In the case of a lease agreement, if the agreement is for a period of less than 12 months, it does not have to be registered. However, a lease agreement for 12 months and beyond has to be compulsorily registered. In many states, a license agreement does not have to be registered.

T Kalaiselvan
Advocate, Vellore
69328 Answers
929 Consultations

5.0 on 5.0

Lock in clause would be that agreement cannot be terminated during the period mentioned in the agreement

For instance if lock in clause is one year both parties cannot terminate the agreement during said period

Ajay Sethi
Advocate, Mumbai
79294 Answers
4742 Consultations

5.0 on 5.0

1. Lease deed in one type of tenancy and it is more difficult to evict the leasee from the leased premises after the lease period is over.

2. Leave and License is for giving leave (i.e. permission) and license to the licensee for using your premises for a particular period of time. It is easier to evict a licensee with due process of law than a leasee.

Krishna Kishore Ganguly
Advocate, Kolkata
24708 Answers
701 Consultations

5.0 on 5.0

There lost of difference legally

Always make leave and licence

Anwar Zaidi
Advocate, Mira Bhayandar
231 Answers

4.5 on 5.0

There is no issue but don't keep a lockin period as if you need the property then it can create issues.

Prashant Nayak
Advocate, Mumbai
22417 Answers
49 Consultations

4.4 on 5.0

Most lease agreements are made for 11 months in order to save the registration amount

Anilesh Tewari
Advocate, New Delhi
17847 Answers
312 Consultations

5.0 on 5.0

Lease agreement is preferred. refer to the following link for the difference:

https://www.moneycontrol.com/news/business/personal-finance/find-out-difference-between-leaselicense-agreement-1267789.html

Regards

Anilesh Tewari
Advocate, New Delhi
17847 Answers
312 Consultations

5.0 on 5.0

1. Executing a Long-Term L&L agreement is not a legal problem, PROVIDED it is duly Stamp Duty paid and Registered and further provided that proper strategic clauses are recorded in the agreement, relating to vacating, yearly increase in rent, penalty etc....

2. L&L agreement for 11 months are executed only by apprehensive parties, to safe-guard their interests, which in a way has no relevance in law. 11 month L&L deeds are effective IF the new L&L deeds are executed BETWEEN "NEW" tenants.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
5441 Answers
25 Consultations

5.0 on 5.0

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