Hi there! My father owns a tenancy right of one property in south mumbai. My father expired 6 years back and since then my mother has been paying rent to the landlord from her account. Now we have decided to sell the tenancy right. We have also discussed with landlord and have arrived at transfer rate at 33% of the selling price. My mother intends buying a new property out of the sale proceeds of the said flat. Hence we requested to make my mother an outgoing tenant while entering into tripartite tenancy agreement. However my land lord despite receiving 33% of the agreed sale price is now seeking another few lacs rupees to make my mother as an outgoing tenant. I fail to understand after the death of my father, should it not be my mother as legal heir have a first right of tenancy. Also specially when i have already agreed to pay 33% of sale consideration why should there be extra sum to make her a party to tripartite agreement. In such case where outgoing tenant is my late father then should it not be automatically his legal heir my mother be party to the sale agreement? I can understand if landlord seeks money to tranfer tenancy right in her name and make rent receipts on her name but here we are already selling the right to third person then why my mother cant be outgoing Tenant? Please provide legal angle to the sams
On demise of father your mother and you staying with him in said premises woukd be deemed tenants
2) if landlord refuses to transfer tenancy rights you can file declaratory suit before small causes court for declaration that you are tenants of the premises
3)for sale of tenancy rights landlord is entitled to 33 per cent of sale price
You can't sell the same it will be deed of assignment. He can't charge you more than 33 percent as it is the normal prevailing percentage. Try to settle it mutually with him. Otherwise you need to approach court which will be again a long process
When a tenant dies, its not his legal heirs, who have a first preference over the tenancy rights
As per the definition of tenant given in rent act, the first preference is given to the family members of the deceased tenant who are residing with him in tenanted premises at time of his demise
A family member may not necessarily mean a legal heir of tenant
For eg. A daughter in law may be living with her father in law, who is the original tenant. She stays as a family member with the tenant, because she is married to the tenant's son
So when original tenant dies, the tenancy will go to the son and his wife jointly and not to the legal heirs of tenant, simply because son and his wife were living with tenant at time of his death in the premises
If there is no such family members, then the tenancy would go to the legal heirs
I would like to know who all were living with your father in the tenanted premises at the time of his demise ?
If that was your mom, then she is entitled to transfer of tenancy
However if there were other family members too like you, your wife, children etc, then all of them including your mom become joint tenants
So if only mother is desired to be recognised as a tenant after the father's death, then that is certainly possible with noc of other family members
In this case there would be actually two transfers by landlord
First transfer will be to the agreed family member and second to the incoming tenant
That's why landlord is asking you to pay above 33%
But its all a matter of negotiating with landlord for transfer fee. You need to negotiate hard
Obviously he would not want to leave the 33% for few extra lacs. So dont show too much interest in the transfer and may be the landlord would agree
I understand that as per family arrangement you may want that sale proceeds be used exclusively by your mom for buying new property in her sole name
If sale proceeds are paid to all family members then all of them become liable for capital gains tax u/s 54F
And then new house may have to be invested in all their names and then subsequent transfers to mother's name which calls for legal hassles
So you need to be resilient with the landlord and stick to the 33% transfer fee
Thanks Yusuf ji. Well explained. However i want to know when after the demise of main tenant when tenancy right is transferred to his wife or blood relation (in my case my mother after the demise of my father) only change in name in rent receipt
Thanks Yusuf ji. Well explained. However i want to know when after the demise of main tenant when tenancy right is transferred to his wife or blood relation (in my case my mother after the demise of my father) only change in name in rent receipt Is enough or even tenancy right tranfer agreement is also required to be obtained?
On transfer of tenancy rights Rent receipt would be issued by landlord in name of wife and daughter
Only change in rent receipt
No fresh tenancy agreement is needed
Its just devolution of tenancy upon demise of original tenant
So no fresh tenancy is created
By issuing rent receipt in favour of wife, landlord recognises her as exclusive tenant of premises
See on demise of your father as per law the heirs or dependents of father staying in property shall be deemed tenants in your case since mother was staying there she is deemed tenant and the land owner need to transfer the rent receipt and tenancy to her name.
If he fails to transfer a suit for same can be filed.
See proof of tenancy is by rent receipts so if the name is transferred in same then she has tenancy right over the flat.
The agreement is not required if the rent receipts are transferred.
My question is that why do you want to show your mother as an outgoing tenant?
Since she is not going to remain in that place and also she cannot show this sale consideration amount in her income tax returns as sale of house property, she need not be worried about it and she need unnecessarily make simple things into complicated one.
She is not the only legal heir to your father, you and your siblings are also legal heirs to your deceased father.
Just give that 33% share to the landlord and let the new incumbent enter into rental agreement with the landlord, your mother can simply walk out with her share of sale consideration amount.
This is a rental property hence there is no concept of legal heirs for the deceased tenant or selling the house, hence dont make simple things complicated.
Change of the tenant after the death of the original tenant is not automatic and there are no legal rights for the heirs of the deceased to claim tenancy in place of the deceased tenant.
However in pagdi system it is going on based on the practical issues.
Moreover your mother alone is not a legal heir to your deceased father, what about his children?
Everyone are legal heirs hence your mother cannot claim any special rights just because shews the spouse of the deceased.
Change of name in the receipt alone is not sufficient, the rental agreement should be transferred on the-individual's name after the demise of the original tenant.