it is necessary to go through MOU signed by you to advice . were the terms filed in court? if these terms have been filed in court tenant will take contempt of court proceedings against you .
Memorandum of understanding
Hello I had a old demolition condition building in a very commercial area in Chennai. I had wished to demolish and re-construct the building . There were two tenets occupying the ground floor. One tenet was occupying for more than 10 years and another one for 2 years. They all very well knew about the condition of the building and I wanted to demolish and reconstruct the building. I asked them Politely to vacate the building. I had plans of giving one shop of the same size to the older tenant at little less than current market price. We both agreed on the terms orally and were about to enter into a MOU. The other tenant also wanted the shop back but it was only possible to construct two shops on the ground floor out of which one shop is wanted for myself. He filed an interim injunction against me to stop evacuating him. He forced me to give me a shop on the ground floor or else he will never Vacate. I was forced to sacrifice the size of my shop and give him a portion at 25% of the market price. Now the older tenant came to know about this and even he refused to vacate his shop untill and unless I give him the shop at 25% of the market price. Since he was the only tenant stuck there and the whole project was in danger I Had to agree on his terms. Now when they have vacated and I have started my project and I am not able to afford to give them the shops at the agreed price. I have taken an advance by cheque from one tenant. I cannot compromise with the size of my shop now , so there is only one shop left . What shall I do about this? What consequences do I have to face if I don't agree to their MOU? Please give suggestions. Thanks in advance.
Asked 10 years ago in Property Law
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15 Answers
No. The MOU was not submitted to the court. If I agree by the MOU I will lose a lot of money. I am ready to give the shop only if I get a Fair Price.
Asked 10 years ago
1)the MOU has been duly signed by you .
2) under MOU you agreed to give shop at 25%^of market price .
3) if you fail to comply the tenant may obtain injunction restraining you from selling , creating third party rights on shop . you have also taken advance cheque from tenant
I am not selling the shop. It is only for rent. The tenants have shops adjacent to my building. Its not that they will be left without a shop if I dont give them a shop. Will compensation decided by the court work if I dont give them shops?
Asked 10 years ago
if mou is signed both of you then it binds both you or you say no mou was signed and the copy which other party has is forged and then you will have to fight it in court,kindly keep this in mind that even if there is no agreement between you and other party and there is correspondence in this regards between you and other party then also they can bound you
frankly it is necessary to go through MOU signed by parties to advice . it is doubtful that tenants will keep quiet after having been deprived of the shop they were entitled under the MOU . be ready for long legal battle ahead . the diference between market rate of shop and price paid by tenants would be compensation sought by tenants
I know if I dont abide by the MOU he will file a suit of Specific performance against me. Some lawyers had told me that the court will order me to give a shop or give compensation. Also I was told that compensation will be only as per the loss incurred by that person due to a shift of his shop. Please advise.
Asked 10 years ago
he has been tenant in your building for last 10 years . as per MOU you must have offered ownership rights to tenant for the shop . he will claim the maximum amount he can . it is upto court to decide . it would also depend upon terms of your contract
that can be only decided by the facts of the case before the court
Till how long can I pull the case?
Asked 10 years ago
10 years .
So till that I cant let out the shop for anyone else or can I use it for my own use?
Asked 10 years ago
no time frame can be set for this
So if they really need the shop they will pay the market price or little less than the market price rather than waiting for a decade?
Asked 10 years ago
dont create third party rights on shop . dont give it on rent . if you use the shop tenant may ask for appointment of court Receiver and that rent proceeds if any received be deposited in court till suit is heard and finally disposed of
we cannot forecast what your tenants will do . it all depends upon legal advice received and whether they want to go for litigation or arrive at an amicable settlement
Sir , so u mean to say I have to keep the shop unoccupied till the matter is settled? It cant be occupied by me also?
Asked 10 years ago
we have advised you at length . dont sell / give on rent . you can use it if you so desire
that you have to decide
If the MOU has been made and signed by you, dishonouring it can be remedied by tenant by moving court to seek enforcement of MOU along with monetary damages. On a legal action brought by tenant the court may hold you liable to pay monetary damages to him in addition to complying with the promise(s) made in MOU.
Once MOU has been signed it is irreversible and capable of enforcement through a court of law. If either party violates MOU then the suffering party can move to court for enforcing the MOU. Hence, to go back on the promise made in MOU is not an option for you as you will end up paying more than what you undertook in MOU to pay inasmuch as court may order monetary damages in addition to ordering a compliance of MOU.
It is for the court to decide the quantum of compensation having regard to well settled principles of law. If you can attempt to delay the case then his lawyer can also play many tricks in book to repel such attempts by you.