Hi, I have a shop to me under the West Bengal Tenancy Act for which i pay fixed monthly rent as per agreement with the owner. Using the space, i have setup a fast food center and have acquired Trade license, Food/ Fire License, electricity and water connection in my name. (proprietorship) Now, I want to give out the premise to an individual or a brand to run it on my behalf using my setup & license and give me a fixed agreed amount or a percentage of income at the end of the month. 1) What kind of agreement should i make with the brand or individual? 2) What are the terms and conditions that i should be looking at? 3) Can the landlord raise any objection/ create any issues? If yes, what are the precautions i can take now to avoid any issue in the future? 4) What is the difference between "Leave & Lincense agreement" and "Lease agreement"?
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1. The arrangement conceived by you is in the nature of a sub-lease for which you require the permission of the landlord unless the rent agreement says that you can create a sub-lease without the permission of the landlord.
2. Creating a sub-lease without the consent of the landlord is a ground for eviction of the tenant.
3. Once the landlord consents then you can execute an agreement with the brand/individual.
1. It will be a franchisee agreement but since another brand would run the business at your premises a sub-tenancy agreement is also required.
2. The terms and conditions are many which can be stated in this reply. You may contact me for drafting such an agreement as such agreement requires lot of skilled job and terms and conditions. SInce you appear to be from Kolkata you may contact me at [deleted] to draft such agreement.
3.Sub-tenancy always requires written consent of landlord.
4.You have to execute lease agreement. leave and License agreement has no existence in WB , more so, when there is exchange of rent.
1. If you have been authorised through your tenancy agreement to sub-let or lease or give under leave and license agreement your tenanted place or any part thereof, then you can enter into a leave and license agreement for 11 months if the other party so agrees. It is the safest step but the other party may not agree for the license for 11 months.
2. If the other party does not agree for 11 months leave and license agreement you can go for a longer period of the said agreement but in that case you shall have to register the said agreement.
3. The landlord can certainly raise objection for your sub-letting of sub-leasing his premises which he has given you on rent if it has been specifically mentioned in the said tenancy agreement that you are not authorised to sub-let or sub-lease the said premises. If your tenancy agreement does not permit you to sub-let or sub-lease your tenanted place, you can not do so legally.
4. Leave and license is not tenancy and does not fall under tenancy act whereas lease agreement is similar to tenancy for a specific period. It is easier to evict a person from the premises if he has entered in to a leave and license agreement with the land lord of the said premises.
1) obtain consent of landlord
2) you cannot give the premises to indivdual or brand without landlord consent
3) if you fial to obtain his consent landlord would temrinate your agreement and evict you from the prermises
4) period of agreement , rentals , security deposit , jurisdiction clause etc should be specified in agreement
5) get it drafted by local lawyer
Thanks all for your response. Please find my follow-up questions below: Can this arrangement be handled through a partnership agreement? Where i am the provider of the infrastructure to conduct the business and the other party is the provider of expertise and man power. In my city, i see multiple such arrangements where one party (a tenant) makes all the investment to setup a place to make it suitable to run the business and the other party (with expertise) runs the same on his behalf. They agree on profit sharing equation or fixed remuneration based on their amicable discussion. Hence i wanted to understand how can this arrangement be made legally without anybody stepping on each other's foot.
1) tenancy of the premises is in your individual name and not in partnership firm name
2) if you want your premises to be used by he partnership firm wherein you are a partner take the landlord consent in writing
3) then you can enter into partnership agreement . get partnership deed drafted by local lawyer
4) partnership firm should be registered with the registrar of firm
1. Yes, this arrangement proposed by you can be adopted provided you have not been barred by the land lord to induct a third party in your business.
2. If there is no such contractual restrain, you can very well enter in to an agreement with the third party wherein you shall provide the place and expertise where as he will invest capital and run the business.
1. You can enter into a business sharing agreement wherein the desired terms and conditions can be fixed.
2. The terms and conditions should be as simple as it is but the terms of profit sharing or fixed income should be very clear and also the termination for default or fraud if any also to be mentioned in it.
3. Sub-letting the premise shall be a cause of concern hence you may allow the business to run in the same nae and under the same banner.
4. A 'Leave & License' ensures that there is no transfer of interest from the Licensor to the Licensee. It is License to occupy and use the premises in the mentioned duration on mutually agreed terms. If the Licensee continues to occupy the property upon the cessation of the License or upon the prescribed notice period, they will be considered as unlawful occupants and action initiated against them for immediate eviction.
A "Lease" being one of the modes of transfer , is governed by the Transfer of Property Act,1882.
A rental / lease agreement cause a transfer of interest from the owner to the tenant, or lessor to the lessee.
Can this arrangement be handled through a partnership agreement? Where i am the provider of the infrastructure to conduct the business and the other party is the provider of expertise and man power.
If you anticipate trouble or problem from the landlord side due to this, you may enter into a partnership agreement with the new incumbent and continue the business in that name
They agree on profit sharing equation or fixed remuneration based on their amicable discussion. Hence i wanted to understand how can this arrangement be made legally without anybody stepping on each other's foot.
There is no provision in law for this however the practice is abundantly prevailing in the local atmosphere.