If rent renegotiation (due to Covid19) with landlord fails, in lock-in period, what to do?
We had leased out a bungalow in Kandivali West Mumbai for running a playschool franchise. Rent is upwards of Rs. 1 lakh a month, structured separately as rent agreement + facilitation / maintenance charges (paid to owners wife). 6% annual escalation.
We had a 3 year lock-in on the property, of which 1 year got over in March 2020. The rental agreement does not have a force majeure clause somehow, am not sure how it got missed. Our property owner is a bit of a maniac, which we realized only after registering the agreement. He is far too money minded and does not live up to his own promises (he took 6 month rent as deposit, did not do all the work which he had agreed to get done, fought with both his and our contractors, architect etc. - we have proofs and witnesses, misbehaved with me and my wife - have proofs, and delayed the work due to being finicky and non-cooperative), we had a lot of clashes with him in early period due to his nature, but somehow have managed to stay on normal terms for last few months. We had lost a lot of admissions in our first year due to delay in site getting completed (pre schools have a fixed academci calendar and therefore admissions window) and this led to heavy economic loss for us. Now, in the second year, we have again been hit by Corona virus issue, in peak admission season (March-May).
Due to Covid19, our business has got severely impacted and we are in no position to pay the high rent. We have requested owner multiple times for rent renegotiation, but he has not responded so far. We fear that he may not agree to a renegotiation, and we may be forced to vacate the property, but given the lock in clause we cannot vacate it also without economic impact.
I need a quick view on what could be our options (legal and otherwise) if the owner does not agree to our request for rent renegotiation? Can we break the agreement without giving the rent for remaining 2 years as penalty? Is there a provision in Maharashtra Rent Control Act (or any such Act) that allows us to not pay rent claiming force majeure? Or any other way that we can force the owner to negotiate terms with us? And worst case scenario, if there is indeed litigation, can we pursue the line that we had economic loss in first year due to the owner, and the harassment charges etc, to defend our case?
Thanks and Regards
Tushar
Asked 4 years ago in Property Law
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