• Renting property more than 5 years

Hello: 1) what is the risk of renting flat to a good tenant ( who pays regular rent ) more than 5 years? 2) does agreement title have to be leave/license not tenancy agreement 3) apart from evacuate due to personal use is there any other safeguard landlord needs to add in agrmnt clause ? 4) property tax, maintenance, water/electricity bills are borne by whom?
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Asked 4 years ago in Property Law
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20 Answers

Dear Client,

It will be lease agreement.

Risk is same which can be in shorter tenancy.

Default in rent payment, sub let, major alteration in property without permission and alike can another clause suggested,

water /electricity will be borne by tenant and maintaining property in condition , liability of tenant.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. I suggest you sign a leave and license for 3 years and have a renewal clause in agreement using which the agreement can be renewed for another fresh term

2. Termination clauses need to be properly drafted to safeguard the landlord. For eg. If licensee commits any default then landlord should have right to terminate the agreement after giving notice to tenant/licensee

3. Payment of the outgoings like property tax, maintenance etc depends on the agreement between the parties. Generally the licensor or owner bears such expenses. Or the licensee can pay on behalf of owner and owner can reimburse the licensee the amounts paid. But better let the owner pay these charges. Many times a licensee may claim right on the property just on the basis that the outgoings are borne by him

4. You will need to have a leave and license agreement drafted by a competent lawyer.

5. This agreement will have to be duly stamped and registered

6. There is no such provision in law that a leave and license cannot be greater than 5 years. But certain stamp laws consider leave and license greater than 5 years as a lease for the purpose of stamp duty. And some dishonest tenants may take undue advantage of this provision.

7. Therefore it's better to have an agreement for less than 5 years and have a renewal clause

8. Do keep in mind that you can raise the rent by 10% every year. This is customarily the practice for residential houses. But it depends on the agreement between the parties

Yusuf Rampurawala
Advocate, Mumbai
6882 Answers
79 Consultations

5.0 on 5.0

Hi, there is no risk in renting flat for 5 years ..2) the title can be rent/lease agreement 3)Generally such bills are paid by the tenant , but you can negotiate as per your own understanding and can draft the same in the agreement ... 4) Any violation of clause mentioned in the agreement by the tenant shall be a ground for eviction

Hemant Chaudhary
Advocate, Gurgaon
4619 Answers
67 Consultations

4.9 on 5.0

1. There is nothing wrong in giving property on rent for five year if the agreement is registered clear and terms of termination of agreement are specifically mentioned. also the small agreements are made for purpose to increase rent or incase the owner needs in between it is easy to evacuate the tenant on termination

2. It has to be leave and licence agreement as this gives limited rights to the tenant also there are different kind of tenancy so specifically leave and license can be mentioned.

3.on non payment of rent.

On using property on different use than it is rented out.

On damaging property.

On use of property illegal purpose.

Subletting the property.

4. See water and electricity is borne by the tenant and it should be specifically mentioned in the agreement.

Property tax landlord has to pay

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

You should prepare a leave and licence for 11 months. You can mention in the agreement that the licensee will be responsible to pay any taxes like electricity charges, House Tax, water tax etc. you can extend the leave and licence agreement for the term of 5 years. It is settled law that the licensee gets no right on the property on the basis that he has been there for long time. Licensee has right to occupy the place only on the basis of licence. Whenever the licence has been cancelled he has no right to remain on the property for a single day.

Shivendra Pratap Singh
Advocate, Lucknow
5127 Answers
78 Consultations

4.9 on 5.0

1) it is better you enter into leave and licence agreement for period of 33 months or so with renewal clause

2) you can enter into lease agreement to give your premises on lease for period of more than 5 years

3) there should be clause that if lessee does not vacate premises on expiry of agreement penal rent would be payable

4)property taxes , maintenance bills are paid by the owner of property

5) electricity bills paid by licencee or lessee

Ajay Sethi
Advocate, Mumbai
87938 Answers
6207 Consultations

5.0 on 5.0

you should not give your premise on rent .

2) if tenant refuses to vacate you have long drawn legal battle ahead

Ajay Sethi
Advocate, Mumbai
87938 Answers
6207 Consultations

5.0 on 5.0

1. There is always a risk when u rent a flat to a good tenant also. A good tenant converts into bad tenant u never know.

2. Agreement title should be leave and licence if in Maharashtra - it should not be a tenancy agreeent or Rent agreement.

3. Evacuate when the term ends.

4. property tax/ big maintenance- by LESSOR

5. small maintenance/ water / electricity bills by LESSEE

Girish Bhambhani
Advocate, mumbai
24 Answers
1 Consultation

4.0 on 5.0

Where lease deed is executed, its`s term will get preference,

And by efflux of time, lease will over after 5 years.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. L&L agreement can be of any number of months /years. This can be executed safely without any worry, subject to proper strategic clauses, for periodic rent increments, automatic vacating at end of agreement period, PROVIDED the L&L agreement is duly Stamp Duty paid and Duly Registered.

2. To avoid futuristic legal hassles, it is preferable that all outgoings relating to the Property may be paid by cheque by the Land-Lord. IT is further preferable to rent out only to Corporate houses .OR. tenants from other States.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

For the long-term lease you have to enter in the lease agreement with the party properly drafted including the exit class and get the lease agreement registered after payment of the requisite stamp duty with Registrar of the district and you can leave the property for a longer Period there is nothing wrong in that and your interest will be saved by registering the agreement you need to pay the taxes arising out of the income from the lease

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

please mention the location of property.

Arihant Nahar
Advocate, Indore
130 Answers

4.8 on 5.0

1. tenancy law is heavily tilted in favour of the tenant in India. If you rent your place to a tenant where he opens his shop and his business clicks there after 5 years, then he will certainly not like to vacate the said premises after 5 years. So, rent agreement itself is risky be it for 2 years or for 5 years or more.

2. Leave and license agreement does not fall under tenancy act.and it is only the permission (leave) and license you have given for using your place for a particular period of time. It is required to be registered if the tenure is for more than 12 months.

3. Execute leave and license agreement for 11 months and thereafter keep renewing the same for as long as you want, for every 11 months if the licensee and the terms suit you.

4. Property tax & major repairs is to be born by you and small reapairs and maintenance and electricity etc. are to be born by the licensee which should be clearly mentioned in the agreement.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

As per the Tenancy Act, it becomes more difficult to evict a tenant who stays for a longer period of time since she can present more difficulties in being displaced than a tenant staying for a shorter period of time.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

No there is no such presumption in the tenants favour.

It is only with regard to the maximum amount of rent which gives tenant a right to not to vacate the same property in dispute.

It differs from state to state.

As in Delhi, it should be 3500 or less then that but not more than.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

1. You can lease out the property for number of years on a monthly rental basis.

The lease agreement may be registered.

2. It can be a lease agreement.

3. Default in rental payment.

4. Property tax has to be paid by the landlord, the utility taxes and charges are to be paid by the tenant

T Kalaiselvan
Advocate, Vellore
78097 Answers
1543 Consultations

5.0 on 5.0

1) Does Rent Control / Property Act protect tenants or give them extra rights if property is let for more than 5 continuous years to same person?

You can incorporate a clause for renewal at the end of the current agreement, instead of invoking any unnecessary rules.

T Kalaiselvan
Advocate, Vellore
78097 Answers
1543 Consultations

5.0 on 5.0

No there are no extra benefits under rent control act even if it given on 5 years period the tenant paying rent and following condition is always under permissive possession or under the leave of the owner.

Eviction in both cases is similar procedure and take similar time a leave and license registered agreement can be made for 5 years.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

I think one can suss out from the way your questions are worded that you are apprehensive about falling victim to India’s notoriously tenant-friendly rent control laws, which can make having a tenant evicted a particularly difficult task. Many a landlord/landlady before you has pondered this question in a bid to avoid having to eventually run the gauntlet of hardships these laws appear to codify. They usually resort to one of three options:

1. Have a month to month lease so as to be governed by section 106 of the Transfer of Property Act and have the option of terminating the lease by 15 days at notice at anytime during its currency (which I believe is not an option here and rightly so); or

2. Have a so-called leave and license agreement as opposed to a lease/rental agreement when the concerned property is to be let out for a fairly lengthy period, and be governed by the Indian Easements Act so as to not have to resort to a court when it’s time to terminate it.

The former is simply designed to fly under the radar of India’s rent control laws. As for the latter, i.e., the leave and license agreement, it does not transfer any interest in the property to the licensee but merely grants them a right to do something in or upon the licensed premise something which in normal course would be unlawful. This can be for any length of time—for instance 11 months, two years, five years, or what have you.

I must point out that the Supreme Court in Bharat Petroleum Corporation Ltd. v. Chembur Service Station observed that a leave and license agreement that “puts the licensee in exclusive possession of the premises, untrammeled by any control, and free from any directions from the licensor (instead of conferring only a bare personal privilege to use the premises) will be a lease, even if described as licence.” So be mindful of that. In practice, however, there is usually no problem. But then again you never know. The best you can do is to manage your risks, and that in your case involves making sure you can trust the tenant and getting someone competent to draft the agreement for you.

Pulkit Chandna
Advocate, New Delhi
191 Answers
5 Consultations

4.9 on 5.0

Agreement title should be leave and licence agreement. Don't rent more than 12 years in continuous possession. After 11 or 22 months agreement. Sign a fresh agreement in name of his wife or other relative with a gap or 1 month then it will not be risky. It's better not to continue na single Person for a long

Prashant Nayak
Advocate, Mumbai
27267 Answers
88 Consultations

4.4 on 5.0

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