• Rent for lock in period

I have given my property for rent .two years is lock in period starts from Jan 2017. My tenant is habitually not paying . He has not paid rent for march , may and June 2018 so I have asked to terminate agreement due to cheque bouncing due to insufficient funds. Tenant us telling me to refund his deposit by cutting 3 months unpaid bill. I hv told him as lock in is 2 years I can't return your deposit. Tenant is claiming that there is no where in agreement return that we have to pay for lock in period.i had given him time to pay till June 8 if he doesn't pay to vacate the place by June 9 but yesterday he wrote saying I will vacate place on June 30 and please pay my deposit cutting 3 months unpaid rent. Kindly suggest me future course of action.
Asked 4 years ago in Property Law
Religion: Hindu

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14 Answers

You need to file a complaint case for this cheque bouncing under section 138 of Negotiable Instrument Act please indicate clearly that in a perpetual contract there is no lock in period any has to pay the rent for all the months starting from the date property is let out till the date of termination then only he can get the refund of the deposit cheque bouncing is a crime and is punishable upto 2 years and penalty of two similar amount along with the amount and interest

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

Best option is to return deposit after deducting 3 months rent

Litigation is long drawn and expensive proposition

Ajay Sethi
Advocate, Mumbai
87947 Answers
6207 Consultations

5.0 on 5.0

The terms in the rental agreement are very important in your case. Rent agreement providing "lock in period" of 24 months is legal and justified. The "lock in period clause" in the Rent agreement is binding on the parties and no one can permitted to come out of the said clause before the expiry of the initial lock in period provided in the Rent agreement.

Remit back the advance amount after 2 years is not a justifiable one in the eye of law. So better you will return the advance amount after deducting the arrears of rent. If you are stick on lock in period then he may or may not be vacate. A wrongful gain is restricted by law.

Ajay N S
Advocate, Ernakulam
3991 Answers
93 Consultations

5.0 on 5.0

It's advisable to deduct the amount recoverable by you and refund his deposit. If there Is no clause of lock in period you cannot get unlawful enrichment at cost of other. In case you do not return the amount he may not vacate the said premises and after two years he may extend his stay where you will be forced to file suit for.eviction and it will be long battle in court. As such deduct amount recoverable by you along with wear and tear damages done by.Tenant to your property and return.him rest of amount.

Swarnarka Chowdhury
Advocate, Mysore
1878 Answers
5 Consultations

5.0 on 5.0

Sir even if there was a clause of lock in period then also you can ask only for reasonable loss and compensation that you have suffered you cannot ask an amount for the total period. This is clear position of law settled in many cases.

Compensation/ Damages is awarded to make good the losses suffered by the aggrieved party, so as to reinstate him in his original position. Law does not penalise a contracting party for a contractual breach and neither does it allow the aggrieved party to take advantage of such a situation. The rule is that the parties are free to breach the contract provided they compensate the other party, if the other party has incurred an actual loss due to such breach.

Therefore if the lock-in clause in a leave and license agreement states that, in case of breach of the said clause, the licensee is liable to pay the rent for the remaining lock-in period is not really enforceable in a court of law. Only a claim based on actual injury suffered by the aggrieved party can be made whereas he has to prove the following things to make a successful claim

That such amount claimed is a genuine estimate of damages,

That the landlord had altered its position by making the premises available to the licensee keeping in view the licensee’s requirements and spending thereupon. That certain expenditure was incurred on infrastructure specifically provided to the licensee as per licensee’s requirements; certain other expenditure incurred on whitewashing, fixture and fittings and the landlord was forced to incur expenditure again before giving the premises to the new licensee and , therefore, lock-in period was treated as reasonable period to avoid duplication of such expenditure, etc.

That the licensor took all reasonable steps to mitigate the loss consequent on the breach.

Quantifying the compensation/ damages for a breach of the lock-in commitment is unnecessary as by proving the above mentioned three points, the aggrieved party is only entitled to get a reasonable compensation based on the actual losses/ injury he has suffered and he is not entitled to the agreed quantified compensation amount. Thus mentioning a quantified compensation in the lock-in clause itself acts as a mere scaring provision unenforceable in the court of law.

The above findings were held by SC in Silvermoon Construction Pvt. Ltd. v. South Asian Hospitality Services Pvt. Ltd., MANU/DE/4958/2012

So in my opinion deduct reasonable amount from deposit along with rent and refund rest of amount to the tenant and settle issue. Further if you even go for specific performance of agreement the court shall grant only actual damages caused.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

1. check the wording used in the lock in clause

2. is it stated that if you are required to terminate the agreement due to tenant's default during lock in period then tenant has to bear the rent for the entire lock in period?

3. in this case it is you who have terminated the agreement for tenant's default. Usually if tenant terminates the agreement during lock in then he becomes liable to pay rent for entire lock in period or as agreed in the agreement

4. you can adjust the security deposit by deducting unpaid rent with agreed interest thereon till the time the tenant hands over vacant possession of your flat to you

5. so if your tenant says that he will vacate on June 30, then he will be liable to pay arrears of rent alongwith agreed interest upto June 30. He cannot dictate that you should deduct only 3 months unpaid rent from the deposit

Yusuf Rampurawala
Advocate, Mumbai
6882 Answers
79 Consultations

5.0 on 5.0

If both Parties agree not to terminate the lease during the Lock-In Period other and in absence of any other clause for termination of lease deed, it is binding on both the parties.

In the event the Lessee terminates the lease during the Lock-In Period, the Lessee shall be liable to pay the Lessor the residual rental for the unexpired period of the Lock-In Period.

You Can also file case under 138 NI act, if the tenant fails to vacate before 09/06/18 for dishonour of cheques.

Siddharth Jain
Advocate, New Delhi
5930 Answers
101 Consultations

5.0 on 5.0

This is my response to you:

1. Send him a legal notice;

2. If he still disobeys your demands they you can easily file a case in court for violation of the agreement;

3. You can file a suit for specific performance of a contract.

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

Hi, it is advisable to settle the dispute amicbly..I am suggesting practically as any legal proceedings from him in court will take sufficient time And expenses for both of you ...Getting a premises vacate is not a easy course if we go legally ..

Hemant Chaudhary
Advocate, Gurgaon
4619 Answers
67 Consultations

4.9 on 5.0

Hello

Yes ! he is right ! You cannot cut the rent for locking period or you let him stay for that much period of time.... If that rules is not mentioned in the agreement.

Unnecessary if the tenants drag this matter in court under Land Lord and Tenancy act...Or

Contract Act., or Leave And license agreement act. You have to face uninvited problems.

Rita Rajput
Advocate, Thane
189 Answers
2 Consultations

Not rated

1) If lock in period clause is not mentioned in the agreement than you can deduct 3 months rent and notice period you can deduct those amount and return his deposit amount.

Ganesh Kadam
Advocate, Pune
12338 Answers
191 Consultations

4.9 on 5.0

Sir, as you said, the tenant is habitual defaulter and he is ready to vacate the property by 30 June, 018 but you are adamant to retain him due to lock in period. Think yourself, do you need a tenant who is not good pay master. Refund him 3 months deposit and locate some good tenant so that there may be easy going. Rest depends upon you how you react further and what course of action you want to take.

Dalip Singh
Advocate, New Delhi
1040 Answers
36 Consultations

5.0 on 5.0

You have only instructed the tenant to vacate the premises hence you cannot claim rent for balance of lock in period.

What are the clauses governing the lock in period?

You may go through the conditions of the rental agreement particularly that are governing the lock in period and decide

You must ensure that the agreement is a registered document, because unregistered document may not be enforceable in law.

T Kalaiselvan
Advocate, Vellore
78104 Answers
1543 Consultations

5.0 on 5.0

Sir

If he is ready to pay the 3 months balance rent amount to you then what remains. You deduct the amount of rent for 3 months and accordingly refund his money.

If his cheque's have been bounced then you need to issue him a notice for cheque bouncing. Your limitation against the same starts running from the day of return memo.

Garima Anil Mehrotra
Advocate, Mumbai
514 Answers
1 Consultation

4.9 on 5.0

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