Hi Sir/Madam, I have a 5 bedroom house in Hyderabad. I was recently approached by a Businessman who wants to open an educational college ( Diploma college) and wanted to rent my house for the same. He is requesting that I give the house on rent for at least 6 years and also give him permission to make some structural changes to the house ( have some disposable partitions, change the flooring and such). Iam worried to give the house on rent for 6 years and the possibility of having to argue with him when I need back my house. What can I do? Any advice will be appreciated. Should I suggest that I could get into a partnership with the Renter to start the educational institution? I have a. template for a rental agreement where I have the clause for rental delays, and for utilities being charged at commercial rate and me the owner not being responsible for any costs incurred if any changes are made, and to return the property back to me upon lease completion, in the same state as initially given at the time of start of lease. But I still worry
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Enter into registered lease deed
2) it should provide for payment of penal rent in case lessee fails to vacate premises on expiry of lease period
3) clause should be inserted for termination of lease on failure to pay lease charges
4) don’t go in for ready made template
Hello,
Better execute leave and license agreement then it will be more easy eject the tenant if he refuses to vacate the property on completion of lease period.
Giving a property on lease/rent to college or school involves State Government through education department. At the time of getting recognition from State Government the management has to submit proof of rental agreement with landlord of the premises. It is difficult to seek his eviction as Education Acts and Rules will be applicable under which it is not possible get eviction in any time bound period.
Entering into a registered lease agreement or a leave and licence agreement is advisable.
As the tenant is desirous of starting a school in the rented premises, in the event of expiration of the lease period and the tenant is refusing the rented premises citing the future of children studying in the school the court also may favor his contention.
If you become a partner to this institution then you may not have any excuse before court in case of any unjustified or illegal move made by the original tenant.
The template for the agreement may not cover all the requirement hence you better get it drafted through an experienced lawyer
You may discuss about the pros and cons with an experienced lawyer and proceed after getting satisfied on all the problems you may anticipate in future
- As per law, if the lease period is more than 11 months , then its registration is mandatory.
- Since, you want to give that property on lease for a period of 6 years , then the lease deed must be registered from the office of registrar after paying stamp duty for the same.
- Further , the said alternation in the property should be carried on your instructions with the further remark that no further alteration or structural changes should be carried in future without getting your consent , otherwise the deed will terminated without notice.
- Further , the deed must have a clause that in the event of non payment of rent , the lease will terminated , and before the locking period he will not vacate the property .
Dear client,
Renting your house to a businessman who wants to use it for educational purposes can be a good opportunity to generate income, but it's important to take some precautions to protect your interests as a landlord.
Firstly, it's a good idea to have a lawyer review the rental agreement before signing it to make sure it's legally sound and includes all necessary clauses to protect your interests. In addition to the clauses you mentioned, you may want to include clauses that address maintenance and repair responsibilities, insurance requirements, and tenant obligations.
Regarding the length of the lease, you could negotiate a shorter initial term with an option to renew. For example, you could consider a two-year lease with the option to renew for an additional four years, subject to renegotiation of the rent and other terms.
Regarding the structural changes, you could consider having the tenant provide detailed plans and specifications of the proposed changes and require them to obtain all necessary permits and approvals before proceeding. You may also want to consider having the tenant agree to restore the property to its original condition at the end of the lease, at their expense.
Alternatively, as you suggested, you could consider a joint venture or partnership arrangement where you have a stake in the educational institution. This could potentially provide you with additional income streams and control over the use of the property, but it also involves additional risks and complexities that should be carefully evaluated.
Ultimately, it's important to carefully consider your options, negotiate the terms of the agreement, and have a comprehensive written agreement in place to protect your interests as a landlord.
It can be given on leave and license agreement there is no harm
