Under no circumstances should you agree for 3 months termination clause
2) insist on lock in period of 3 years
3) after expiry of lock in period agreement can be terminated by 3 months notice period
Commercial lease deed
I am getting into a rental agreement with landlord for 4 years for a preschool purpose but landlord is asking to keep a termination clause of 3 months from both sides , in this case i hope a agreement will not be valid for 4 years . If i go with 4 years lockin period landlord feels unsafe & is not willing for lockin period for more than 1year . So please let me know how should i go with agreement for 4 years as i need to safeguard my investment spent on interiors & frequent change of location will spoil the goodwill .
Asked 7 years ago in Property Law
Religion: Hindu
11 Answers
You need to find some other person with lock-in period of more period. There is no harm in execution of agreement for increased lock-in period
Dear Sir,
Agreement for more than 11 months requires registration. Yes you must insist for lock in period of 4 years otherwise your investment will be waste. Landlords sometimes become jealous of your growing business. Get it registered.
Section 106 in The Transfer of Property Act, 1882
1[106. Duration of certain leases in absence of written contract or local usage.—
(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice.
(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice.
1) You can put rent increase clause after every 11 months and as your school goodwill prestige you can till owner you won't be vacate in middle of educational year.
2) For three months advance notice he has to give notice in month of January. and you can charge for interior etc expenses.
There is no way out if the landlord does not agree for a 4 year lock-in period. It all depends upon the landlord and mutual understanding.
1. Yes, you are right as since huge investments is required for running the playschool it is essential that there must be some lock in period and under the circumstances at least 2 years must be a period before which landlord can not terminate the agreement.
2 Another option is to increase the rent in every years so the landlord feel inclined not to terminate the agreement even after lock in period.
3. So without hesitation talk to the landlord. Else search for other property.
See you need to sit and decide with the landlord mutually and you should agree on minimum lock in-period of three years, you need to explain the landlord that it is beneficial for him also as if business doesn't go well he shall still get rent for three years.
Further the condition that the agreement can be terminated with notice of three months only when there is breach of any condition of agreement that is rent is not paid timely or and contrary activity is taking place.
- As per the information mentioned in the present query, makes it clear that you are going to establish a venture that may require longer exeistnce at a place where it is starting now.
- Even according to me 4 years would also be a less period in comparison to the money which you would be spending on interiors etc.
- The period of one year is abosulutely not acceptable, when you are ready for 4 years which may also be looked into. But, definitely not one year or less than four.
- Once you can decide with these problems at hand then I can tell you more specifically as to what you should add in the agreement to save guard your interest without even showing from the words of clauses to the landlord that is it something which is more favourable to you only.
4 years lock in for the landlord appears to be excessive
Just as you are concerned that you should not suffer loss if such a lock in is not kept, in same manner landlord will have that apprehension
A lock in of 1 year for both is reasonable
During the lock in neither party can give any termination notice to each other except in case of breach of obligations under the agreement applicable to each party
Thereafter a 3 months termination notice can be applied for both in case either party wants to terminate the contract, but only in case of a breach and not otherwise
Instead of going for a termination clause please mention" If the tenant failed to pay the rent for continuously 3 months or alter the accommodation without the knowledge of the owner or sublet the accommodation then the agreement will be terminated from the owner side by giving three months notice prior to " because there should be any valid reason to do so.
Them three months termination notice period ion either side is an advantage to the land owner, therefore without the clause for a strict lock in period for four years, this agreement can be terminated anytime by giving three months notice by the landlord.
You may insist on the 4 years lock in period or dont sign the leas e agreement.
