• Is it advisable to lease out a hospital in Kerala?

I would like to know two things:
1. We have a hospital and we are in the winding up stage..there are many ppl coming and asking for lease of the hospital. But we are hearing from sources that legally it is very difficult to get the lease amount if the leasing party is defaulting on payment and to evict the person from the property in the current Indian/Kerala scenario. Does it take 4 to 5 years in the court of law for such an eviction process in case of default of payment or any other reason. We want a hassle free leasing process so I need some advice.
2. Can the occupying lease party take the property after a while and not give it back?
 We have queries on sale or lease of this hospital so we want to know if outright sale is better to avoid hassles or if leasing can entail to a lengthy court process if the party is a defaulter or has other intentions? What would you advise?
Asked 8 months ago in Property Law
Religion: Hindu

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9 Answers

1) it is always advisable to sell the property and give it on lease 

 

2) if you give on lease and lessee fails to vacate you have long drawn legal battle ahead 

 

3) litigation is long drawn and expensive proposition in India 

Ajay Sethi
Advocate, Mumbai
82706 Answers
5254 Consultations

5.0 on 5.0

1. Yes in most states Rent Act is a welfare legislation and is in favour of the tenant.  However that is with regard to residential purposes.  For commercial gain lease is mostly favorable to landlords. 

2. A lessee is always a lessee and can never ever challenge the title of landlord by operation of law of estoppel. 

To me sale is better option. 

Devajyoti Barman
Advocate, Kolkata
22452 Answers
353 Consultations

5.0 on 5.0

Hi 

1) You can opt to lease out the hospital vide a registered lease deed for a fixed tenure to the parties interested in leasing the hospital premises & equipment.

2) It is true that any judicial process including Eviction of tenant is taking about 4-5 years time given the fact that judiciary is understaffed and there is a huge pendency of cases. 

3) Also in case hospitals/schools , notice period is very critical because, it is very difficult to take forcible possession of a running hospital and school as humanity factor will come in to play. 

4) Therefore ,  you can have a well crafted lease deed protecting all your interests (including payment of rent, damage to the premises, default terms, notice period ,  insurance for premises, rent enhancements, return of premises on expiry of lease and other exit clauses  etc) by contacting a good lawyer who can help you to incorporate all terms protecting your interest.

5) Only the owner can decide which options(out right sale / lease) is suited for him, but generally, if owner is not in urgent need of money / does not have alternative investment options and also that capital gains tax under section 54 of Income Tax will come in to play, we recommend the lease of property vide a registered lease agreement. 

Hope this information is useful. 

 

Rajgopalan Sripathi
Advocate, Hyderabad
2119 Answers
394 Consultations

5.0 on 5.0

1. You can lease out with proper registered agreement for safety. 

2. No, it is not so. There are law enforcement agencies for this problem. 

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

4.8 on 5.0

1. Why do you think about evicting the lessee even before leasing out the premise. 

You make a strong lease agreement which would protect your future interests. 

2. No, you are the owner,  the tenant cannot claim the ownership for any reason 

Selling the property is your own decision 

T Kalaiselvan
Advocate, Vellore
72791 Answers
1111 Consultations

5.0 on 5.0

- Many banks , hospitals are running from the lease building , hence after executing a registered lease deed and after mentioning the each and every conditions in details , you can give the said property on lease . 

- As per law , registration of lease deed is mandatory if the lease for more than 11 months. 

Mohammed Shahzad
Advocate, Delhi
7090 Answers
74 Consultations

5.0 on 5.0

Sale is undoubtedly more feasible and perceivable than lease. However both modes of transfer have their own loopholes. 

For evacuation of lease property in case of default in lease rentals is a cumbersome process in litigation. You may choose to give it on rent for shorter tenure and keep renewing the rent agreement. This way you will have upper hand and charge over the property also you can increase rent after cessation of stipulated period of first rent agreement. You can place a condition that you shall increase rent by certain percentage if the tenant is inclined to renew the agreement. 

Pooja Ashar
Advocate, Ahmedabad
207 Answers
2 Consultations

5.0 on 5.0

You can execute a leave and license agreement in the said scenario

Prashant Nayak
Advocate, Mumbai
23442 Answers
49 Consultations

4.4 on 5.0

Dear Sir/Madam,

You are suggested to get the lease drafted strongly in your favour if you are wiling to lease out the hospital. There are risks and if and buts everywhere, so the risk taking is better solution. 

Ganesh Singh
Advocate, New Delhi
6616 Answers
14 Consultations

4.5 on 5.0

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