Leave & license agreement will be ideal in the same
Renting a commercial land to LPG Bunk
Hi, I am planning to rent a DC Converted – Commercial land on the main road to a LPG bunk in Bangalore. The rental period is 10 years with 5% increment yearly. I want to understand how do I cover myself legally so that I can get my rent but also recover my land after 10 years. The tenant will be building the structure and LPG station. I have been told that once a Land rented to a Petrol/LPG station cannot be recovered at all ? Please can you kindly guide me and provide any insights regarding renting a commercial land to a private company ?
Asked 2 years ago in Property Law
Religion: Hindu
8 Answers
Can I generate a Leave & License agreement for 10 years ? what if the tenant stops paying rent after 1-2 years then ?
Asked 2 years ago
Dear Client,
The same can be done only with a full proof rent agreement that includes all the necessary documents. Contact a professional and let him draft it.
Thank you
You can evict him if he stops
Leave and licence agreement cannot be for 10 years
2) you have to enter into registered lease deed with lessee for LPG bunker
3) agreement should provide that on expiry of lease period lessee shall vacate premises forthwith and lease would not be renewed under any circumstances
4) penal rent would be payable if lessee fails to vacate premises
If lessee fails to pay rent for 3 months lease deed should provide that lessor can terminate agreement for non payment of rentals
The minimum period of lease for petrol pumps is generally 30 years, hence your condition for 10 years lease may not be acceptable.
Therefore you may hae to read the draft lease agreement carefully and if you are okay with the terms, you may proceed with the lease agreement or can decide about not leasing it out to petrol pump operators.
It is true that the land once leased out to operate petrol pumps cannot be retrieved so easily even after the expiration of the lease period.
It is becoming difficult for petrol Pump owners in India to release their land from the clutches of Public Sector Oil Marketing Companies with Government of India taking a tough stand on the above issues. In recent years due to non increase of commission on sale of fuels the business of petrol pump has become nonviable for the petrol pumps having low sales.
Even if the Dealer wants to quit the business of the petrol Pump for some other lucrative business, the Land on which the petrol pump stands cannot be released from the PSU oil companies due to current directives of the Petroleum & Natural Gas ministry to the PSU oil Companies in form of De-leasing Policy for Retail Outlet sites-2010 Policy circular no:R-30024\56\07MC dated 28.4.2010
In the above policy it is clearly specified that the PSU Oil companies to coerce the landlords to sale or let out their property to PSU oil companies even after the lease period have expired.
The policy has stressed upon to pursue litigation upto the last available option, irrespective to the provision contained in the lease agreements executed between the Land owners and the Oil companies. In the policy it is clearly stated that even after the lease period have expired the oil companies should not vacate the land and opt for all available legal options to continue squatting on the land of poor landlords.
There is no option for leave and license for letting out the land for petrol pump operation.
The PSU oil companies will not approve the same.
The minimum period of lease agreement shall be 30 years owing to various factors involved in setting up a petrol pump by the PSU oil companies.
1. Please avoid unwanted unwanted terms and conditions in the rental agreement. If the lock in period is 10 Years the rental agreement shall cease to exist on last day of the agreement.
2. No tenant can claim ownership of the property rented to him/her or to any person.
3. Leave or License agreement all are the same purposes, let it be what ever document do not include any terms and conditions which is not necessary.
4. if the tenant fails to pay the rent you will have the options to file suit against your tenant for ejectment of tenant premise and for the recovery of balance rent.
