• Fair rent

HI,
I have rented a 2700 square feet empty ground with two sides of 10 feet compound. In which i have constructed 8 feet above that compound , cement flooring, steel roofing and shutter gate for my company. I have agreed for paying 17000 as rent which is higher than the market value for the period of eleven months as per the landlord request. For the building construction it took 6.5 lakhs for me. we have agreed to keep 3 lakh as the advance remaining 3.5 lakhs deducting from the rent.
We have started a stainless steel manufacturing unit in the building but fortune where not favoring our business as we expected initially.Now 1.5 years over from agreement date after the building constructed. Now he is deducting the rent from the time of constructing the building which means i have to pay rent for constructing his building also. He saying we have to renew the agreement and he  is demanding above 20000 rent which is unacceptable. i have taken loans for the machinery for our company and other personal loans its very hard to pay even 17000 right now. I want to know whether every 11months they can increase the rent? If so what would be the maximum percent as per standards. 
I want to know about fair rent and how it is calculated . approximately how much i will have to pay if that was implemented. And say me about rent control act will be useful?
My source of income is only through this business. i have to pay my loans rent workers salary everything from this business only.So i need to stay for atleast 10 years here. Whether he can evict me out early when i go through legal way? i'm ready to pay 5% increment to every 11months. 

Thanks for your valuable time in looking into this. 
Awaiting reply

Monesh
Asked 1 year ago in Property Law from Vellore, Tamil Nadu
Religion: Hindu
1) it is leave and licence agreement . it can be renewed by consent of parties at rent mutually agreed between the parties . 

2) you can inform the licensor that you are willing to pay 5%incremental rent every year and to enter into agreement for 33 months with a renewal clause . 

3) licensor can evict you as per the clauses in agreement on expiry of the agreement or after giving notice as provided in the agreement 

4) company would not fall within ambit of rent control act . every state has its own rent control act . you can check with local lawyer in this regard 
Ajay Sethi
Advocate, Mumbai
23325 Answers
1220 Consultations
5.0 on 5.0
The conditions of rental agreement will govern the issue.  If it was agreed to increase the rent by....percentage, it has to be complied with. The landlord cannot arbitrarily increase the rent as per his fancies and whims. 
You should  peruse the conditions of the agreement once again  or show it to a local lawyer and take his opinion before issuing a notice to vent out your grievances. 
he fixation of fair rent will be operative only  when the terms of agreement or the  agreement itself is  no more valid or stands expired. 
T Kalaiselvan
Advocate, Vellore
14122 Answers
127 Consultations
5.0 on 5.0
If you are ready to pay 5% increment then negotiate the same with the owner and enter into the agreement. The rent can be increased after every 11 month if the same is mentioned as a clause in your rent agreement. there are no set standards and the percentage of increase if any must have been mentioned in the rent agreement. 

Rent control act does not apply on companies however since Rent legislation varies from state to state so kindly check with your state laws. 
Shaveta Chaudhary (Sanghi)
Advocate, Chandigarh
821 Answers
60 Consultations
5.0 on 5.0
1) express your inability to pay rs 25000 per month 

2) if you refuse to vacate licensor will file suit for eviction 

3) it may take some years to be disposed of depending upon pendency of cases in your city 

4)you cannot force licensor to renew agreement at rent offered b you 

5) you are mere licencee and not a tenant and can continue in possession only as per terms of your contract
Ajay Sethi
Advocate, Mumbai
23325 Answers
1220 Consultations
5.0 on 5.0
1. Unless there is a specific clause in the agreement which provides for deduction of rent from the date of construction it cannot be so deducted.

2. In the absence of a clause providing annual increase the landlord cannot unilaterally enhance it. The agreement is sacrosanct. The concept of fair rent is alien to an agreement which does not have a provision for enhancement of rent.

3. You cannot be evicted at the drop of a hat. To evict you he has to go to court to file a case for your eviction. The court alone can order your eviction. You will be given an opportunity to rebut his case. 
Ashish Davessar
Advocate, Jaipur
18167 Answers
449 Consultations
5.0 on 5.0
1. Since there is no clause for enhancement in the agreement the landlord cannot unilaterally increase it. He has to go to court which alone can increase it.

2. You are not obligated to be a party to the renewal of agreement. You may vacate the property and claim your deposit in accordance with the law.

3, If he refuses to pay the rent you can deposit it in the court.

4. Unless the court orders your eviction you can stay in the place.

5. If the agreement is expired and has not been renewed you are duty bound to vacate the premises, failing which you can be sued for damages and also prosecuted which may culminate in a sentence of imprisonment being awarded to you.
Ashish Davessar
Advocate, Jaipur
18167 Answers
449 Consultations
5.0 on 5.0
land lord can increase 10 % rent per annum or after completion of agreement. you should file application before rent controller and seen necessary changes in agreement because commercial agreement shall not be extend for 11 months only because tenant need to establish his business and he can't windup only on one month notice.

This is unfair agreement and you need to get necessary changes.   
Shivendra Pratap Singh
Advocate, Lucknow
2760 Answers
41 Consultations
4.9 on 5.0
The demand made by him for increased rental payment is unjustified,  no doubt upon expiry of the present agreement he may ask you to vacate and refuse accepting the rent.  
For this you have to adopt the strategy by writing a letter to him stating that since he has refused to accept the monthly rental amount being paid to him in person since the month of ....., he may furnish the bank account details so that you will be able to credit the same to his account directly within 7 days failing which you may have to send the same by money order by deducting the money order commission, and even if that is  refused, you may have to approach the court for depositing the same in the court.  
You can this letter to his address by registered post with acknowledgement card by yourself and further actions you can contact a local lawyer.  If you would like to have discussion over phone with this lawyer you can click the option talk to the lawyer available against my profile for further clarifications. 
T Kalaiselvan
Advocate, Vellore
14122 Answers
127 Consultations
5.0 on 5.0
1. It appears that you have taken the property on leave and license agreement,

2. So, you are not covered under Rent Act,

3.So, te concept of fair rent is not applicable on you,

4. You are required to renew your agreement,

5. Negotiate with him and make a fresh agreement and this time let it be tenancy agreement for nore than 1 year to enable you to take shelter on tenancy act later on.
Krishna Kishore Ganguly
Advocate, Kolkata
12127 Answers
233 Consultations
5.0 on 5.0
1. You are not covered under any tenancy act since you have entered into a leave and license agreement by which you have been given license to stay for 11 months only,

2. It was inproper on your part to enter into LL agreement for 11 months and spend so much money on construction purpose,

3. It will be take less time to evict you, if the land lord files an eviction suit against you,

4. The land lord is legally smart since he is not renewing the agreement for more than 11 months or converting  it to a tenancy agreement,

5. It will be prudent on your part to negotiate with him at this stage.
Krishna Kishore Ganguly
Advocate, Kolkata
12127 Answers
233 Consultations
5.0 on 5.0

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