• Rent during lockdown

Dear Sir,
I am the landlord and I leased out my property to a showroon and the lease started on 14th dec.My Lease includes the following force Majeure clause (Wording as below)

FORCE MAJEURE:
If the performance by either of the parties, of any of its obligations under this Agreement is prevented, restricted or interfered with by reason of, fire, accident, strike, war or other violence, any law, or regulation of any Government, or any act or condition whatsoever beyond the reasonable control of such party (each such event shall be called a “Force Majeure” event), then such party shall be excused from such performance to the extent of such prevention, restriction or interference; and provided further that such party shall use reasonable efforts to avoid or remove such cause of non-performance and shall continue performance hereunder whenever such prevention, restriction or interference are removed. The LESSEE shall not be required to pay rent or any portion thereof during the continuance of the Force Majeure event, if such Force Majeure event renders the entire Schedule Property or a portion thereof unusable, until the LESSORS repair or render the Schedule Property or a portion thereof, usable by the LESSEE in terms hereto.

Please suggest

1 - Does the current situation count as a Force Majeure based on the wording in lease
2 - Lessee may be unable to do business operations .However, All of his stuff is within the premisis and the lessor has nothing to do with exiting out of the force Majeure clause
3 - Towards the end of para, As it only says a suspension of rent and not a waiver, what is the way to go forward
Asked 5 years ago in Civil Law

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22 Answers

Pandemic and subsequent lock down imposed by govt would be covered under force majeure clause in contract 

 

2) you cannot claim rentals during period of lock down 

Ajay Sethi
Advocate, Mumbai
99819 Answers
8147 Consultations

- Legally , a tenant cannot claim for force majeure , if the said agreement not having a clause for the same or even the same is mentioned in the agreement as well. 

- As per the order of the Home Ministry which issued under the Disaster Management Act, A landlord should stop from demanding rent from poor workers and migrant laborers for one month., and further strict action against the landlords who force evict their tenants, wherever the workers, including the migrants, are living in rented accommodation. 

- Hence , it is clear that , this direction/order would be applied with the poor workers, and migrant labors , and not for all , and a business man cannot claim for the same on the ground of force mejeure. 

- Further when a lease is executed, there is a transfer of property. Hence, the lease is governed under the Transfer of Property Act, 1881.

- Further, under Section 108(c)of the Transfer of Property Act. the lessee is put in possession , and it is the duty of the landlord to allow the tenant to continue in possession without interruption, and further the lessee is bound  to pay the rent to the lessor at the proper time and place 

- Further, Section 108 (e) of the Transfer of Property Act- "If by fire, tempest, or flood or violence of any army or of a mob or other irresistible force any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purpose for which it was let, the lease shall, at the option of the lessee, be void, etc.

- Since, the present crisis i.e covid-19  has neither destroyed the tenanted premises , and nor the house became permanently unfit for the purposes of occupation., hence even the provisions of Section108 (e) of the Transfer of Property Act are also inapplicable here. 

- Hence , a tenant cannot claim on the ground of force majeure. 

Mohammed Shahzad
Advocate, Delhi
15819 Answers
242 Consultations

1. No it's not a forcemajeure as far as payment of rent is concerned he can't get excuse to pay the same. If he can't pay he need to vacate the said premises by adhering to the terms of agreement. He can at the most take extension on Humanitarian grounds if you permit but not a matter of right. Even landlord has many obligation regarding property which there is no excuse by govt from taking care of those. If he is not paying not vacating you can evict him

Prashant Nayak
Advocate, Mumbai
34545 Answers
249 Consultations

1. Even though there is a clause for Force Majeure included in your lease agreement, the current situation do not fall in that category hence the tenant cannot invoke the said clause.

 2. Since the rented premise is in the possession of the tenant, he cannot invoke the said clause  just because he cannot do the business, that has nothing to do with the rental agreement.

3. You do not agree even for suspension of monthly rental amount, let  him default in rental payment, you may drag him to court with an eviction suit for willful default.

T Kalaiselvan
Advocate, Vellore
90020 Answers
2497 Consultations

1. Yes

2. Force Majeure is applicable here.

3. Rent can be delayed, not waived off. So ask him to delay 

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

Clearly it's mentioned in the clause that "the lessee should not required to pay rent".  Force Majeure clause is totally matching with current Covid 19 situation. However only reading this clause it will be giving like half answer. 

 

Need to understand what type of business is running at your place by lessee. So we can check  in the agreement whether it's 100% applicable or not. 

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

1. Yes

2. If running of business is prohibited due to lockdown then the lessee can seek exemption from rent.

3. The lessee is exempted from paying rent for the period the Government restricts in running the business for which the premises is taken on rent.  This is waiver of rent for the period when the showroom will remain closed for running the business.  Keeping the staff inside doesn't save you. 

Devajyoti Barman
Advocate, Kolkata
23655 Answers
537 Consultations

1. Lockdown is certainly a force majeure, as held by Delhi High Court, but it has also been held by the Delhi HC that the performance of every contractual obligation cannot be avoided by saying that lockdown is a force majeure.

2. However, so far as landlord-tenant relationship is concerned, lockdown as a Force Majeure works in favour of tenant to allow him to make delayed payment of rent, but he cannot claim as a right to have any part of the rent waived off.

3. Delhi HC has in a case before it allowed the tenant to make delayed payment of rent, but did not countenance his plea to waive the rent.

Ashish Davessar
Advocate, Jaipur
30840 Answers
981 Consultations

Dear Sir,

The situation caused by COVID 19 pandemic is surely a force majeure and you are suggested to ask for wavier of the rent for this period and if not waiver then small installments and deferment for rent. 

Ganesh Singh
Advocate, New Delhi
7169 Answers
16 Consultations

1) Yes, the present situation of pandemic and the  lock down imposed by Central Government  is covered in your Force Majeure Clause.

2) Going by the contents of the clause, you cannot claim the rent.

3) As per the Government's instructions, it is not fully waived off but can be deferred / delayed in payment of rent.

Thus, you can ask them to pay in deferred manner in 2 months.

S Srinivasa Prasad
Advocate, Hyderabad
2876 Answers
9 Consultations

Yes but rent will waived for that period only when govt. has ordered closer of shops. Once govt. granted permission to open the shops, rent will pay.

FM dose not applies on rent but you have wrongly include such clause and now you are bound by the clause.

Rightly noticed, suspension is for limited period or payment defer till situations exits.

You are entitle to rent without interest on delayed payment but no waiver.

Yogendra Singh Rajawat
Advocate, Jaipur
23083 Answers
31 Consultations

In litigation period rent will be on hold or max to max you can ask court to give interim order for rent and deposit in the court it self so you can withdraw from there.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

He need to deposit the rent in court during litigation he can't drag it to the end. You can withdraw the same from court

Prashant Nayak
Advocate, Mumbai
34545 Answers
249 Consultations

They will try to get the interim relief application allowed from court which means that if that application is allowed by judge than rent have to be paid during the litigations, try getting it cancelled 

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

- Since your matter is different from other rent cases, hence in your case court will prefer to conclude the petition . 

Mohammed Shahzad
Advocate, Delhi
15819 Answers
242 Consultations

The tenant is bound and liable to pay the rent till such time he is vacating the rented premise  and delivering vacant possession to the landlord.

This is applicable even for the period the litigation is going on in court.

You can inform court that he stopped paying rent which is 'willful' default in the legal terminology hence he is liable to be evicted.

 

 

T Kalaiselvan
Advocate, Vellore
90020 Answers
2497 Consultations

Rent will pay continue otherwise instant eviction. 

Yogendra Singh Rajawat
Advocate, Jaipur
23083 Answers
31 Consultations

Yes the clarification as to the disputed rents will be  given by court, as such, they will be  kept on hold.

You can file an application to deposit the admitted rents in to the court till the dispute is resolved.

  

S Srinivasa Prasad
Advocate, Hyderabad
2876 Answers
9 Consultations

You can seek others to direct lessee  to deposit rentals in court pending hearing and final disposal of suit 

Ajay Sethi
Advocate, Mumbai
99819 Answers
8147 Consultations

if the lease agreement is silent about force majeure clause you can claim the lease amount. 

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

1. The tenant continues to be liable to pay the rent even when the lis is pending in the court.

2. Presently, due to lockdown the courts across India are hearing only urgent cases, but such landlord-tenant disputes are not treated as urgent.

Ashish Davessar
Advocate, Jaipur
30840 Answers
981 Consultations

1. Yes current event is forced Majeure event as per your lease agreement.

2. It is specifically mentioned in forced Majeure clause The LESSEE shall not be required to pay rent or any portion thereof during the  continuance of the Force Majeure event.

3. You cannot ask lessee to pay rent for period of lockdown as it will be compete waiver of rent for period of lockdown.

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

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