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Discussion > LAW > Agreement deeds >

Query on Rent and lease agreement

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[ Scorecard : 1587]
Posted On 09 July 2008 at 13:42 Report Abuse

All the RENT agreements I have seen mention that the LEASE agreement is for 11 months. My question in this regard are:


1)Why is it that eventhough the title of the agreement says "RENT AGREEMENT" the wordings in the agreement are"LEASE AGREEMENT".


2)Why the lease agreement is always entered into for 11 months only?


3)Normally the agreement so entered are not renewed after 11 months eventhough the tenant continues to occupy the property. What is the effect of non renewal?


4)How does one determine the amount of stamp paper to be used for rent agreement?

 

Kindly answer questionwise.


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Senguttuvan K
Manager Taxation

[ Scorecard : 33]
Posted On 24 August 2008 at 08:49

This is an article to which I had an access from ACCOMMODATION TIMES (India's oldest knowledge based newspaper on Real Estate) and it clarified most of my doubts in line with yours. The same is reproduced here. For further clarifications, you write back. LEAVE AND LICENSE Why Eleven Months only ? By. S. R. Agarwal, Advocate There is a practice prevalent in Bombay that Leave & Licence Agreement in respect of a residential premises is entered into and executed for a maximum period of 11 months. The question arise whether it can be for more than 11 months. A licence has been defined in Section 62 of the Indian Easement Act, as a right to do or continue to do something in or upon an immovable property . It does not transfer the interest or create any interest in the immovable property , like a “ LEASE”, as defined in Section 105 of the Transfer of Property Act, as a right to enjoy property for a certain period in consideration of the price paid. Provisions of Section 62 of the Indian Easements Act do not prescribe , any minimum or maximum period for which a licence may be granted. A lease of a immovable property in Bombay is governed by the provisions of Bombay Rents Hotel & Logging House Rates Control Act, 1947 ( Popularly known as Bombay Rent Act, ) which no where provided , prior to 1.2.1973 for giving a residential premises on Leave & Licence basis. Still the practice was in vogue to give the residential premises on Leave & Licence basis . An instrument creating a lease of immovable property for a term of one year and above was required compulsorily to be registered by virtue of provisions of Section 17(d) of the Indian Registration Act. Therefore, such Leave & Licence Agreements were being executed for a period of 11 months with duel intention namely to avoid the stamping of such agreement and its registration and , secondly, to avoid interpreting such Leave & Licence Agreement as a lease of the immovable property to avoid protection against vacation of the occupier, as per the provisions of the said Bombay Rent Act. In the year 1973 an amendment was carried out in the said Bombay Rent Act buy the State of Maharashtra, where section 15A was introduced therein providing that any person in occupation of any premises as a License on 1.2.1973 shall be deemed to have become a tenant in respect of the premises in his occupiers of residential premises as licensees as on 1.2.1973 , became the statutory tenants of the premises with the benefit of protection against vacation of the premises, except in accordance with the provisions of the said Bombay Rent Act. Thought, the State Government of Maharashtra regularised an illegal practice of creating Leave & License in respect of residential premises, which was contrary to the provisions of the said Rent Act, yet the Landlords, who did not or do not require the premises for their own use, were not willing to give the premises to others which created imbalance in the Society in as much as on the one hand sufficient was available and on the other, people were starving of the accommodation, albeit for a temporary period. These were being held back by the owners because of the apprehension of not getting the premises vacated, when they needed in view of the protection provided to the tenants by said Bombay Rent Act. Therefore, it recognized the need of giving the premises on Leave & Licence basis as a practical solution, to this problem and, consequently, made a specific provisions by way of Section 13A2 for giving the residential premises on licence basis, which also provided that in case of the failure of the licencee to deliver the possession of the licensed premises on the expiry of the period of licence , the licencee could be summarily evicted from the premises by the Competent Authority as per the provisions of Section 31D of the said Bombay Rent Act. Again Section 13A2 does not provide for any specific period of a licence and further clarifies that an Agreement of Licence in writing shall be conclusive evidence of fact of the licence. By virtue of Sub-Clause (V) of Section 17(2) of the Indian Registration Act, and Instrument or Deed, which by it does not create any right, title or interest in an immovable property does not require registration. As stated above, a licence has been defined in Section 62 of the Indian Easements Act as an act, which does not create or transfer any interest in an immovable property. When the concept of Leave and License has been recognised by the aforesaid Bombay Rent Act by Section 13A2, which does not provide for any specified period of licence and an agreement of Leave & Licence, which does not create any right title and interest in an immovable property does not require registration under the Indian Registration Act, the author is of the opinion that a Leave & Licence Agreement for more than 11 months is legally valid and can be entered into for a period for more than 11 months , and such an Agreement can simply be executed on a non-judicial stamp paper of Rs. 20/- as per Bombay.




(Guest)
Posted On 12 September 2008 at 17:39

I am presently staying in the chawl as tenant from last 45 years.

I am intend to shift from chawl to flat/apartment as the place in which i am leaving now is not enough.

Can I give this on rental to outsiaders as it will otherwise remain of no use.please advise as it will be a case of sub teanancy.

 

What safety I should follow for gving this paghadi property on renta.

can i amke an agreement for this fo rental please advise

 

regads

 

 

 

 

 




(Guest)
Posted On 06 October 2008 at 12:31

Q 1. What is the consequence of Non renewal of Leave and License Agreement for a period of 24 years.

Q 2. What is the remedy if the Licensee in the above case refuses to leave the licensed premises and inturn claims tenancy rights.




(Guest)
Posted On 30 October 2008 at 15:26

All Lease Agreements for residential purpose are mostly made for 11 months which can be renewed at the option of any of the parties.

Now the question arises is that, why do they prefer to make 11 months lease agreement rather than to make it for a year i.e 12 months or more.

The basic reason for making it on 11 months basis by the property owner is to shy away  from the law of giving 6 months notice.

if he makes it for 1 year i.e 12 months, then he has to give notice of 6 months at the end of those 12 months but if he makes the agreement for 11 months then there is no compulsion of giving notice, he can give him minimum period of notice which he think say 7 days notice .

 

thus 11 months agreement is made so as to shy away from the laws relating to giving notice of 6 months.

this is the only fact which at present is kept in mind by the lawyers etc thus the note given by sangutttvan is very good but it neglected the main aspect other than what he stated.

 




(Guest)
Posted On 31 October 2008 at 13:23

please be kind enough to write the details in a rent agreement




(Guest)
Posted On 09 December 2008 at 15:05

 

Sir, I am stying in a flat under Leave & Licence. And at the time of executing the agreement, the lessor took from me one month rent in advance (Rs. 2800), in addition to the deposit amount (Rs. 20,000) at the first day of my occupancy. And he also deposited the post dated cheque  in the first few days of my occupany. As such, the lessor says that I don't have to pay the rent in the last month of my leave and license agreemtn.  But for this advance amount, he didn't give me any receipt as proof of payment of this advance rent. Is it ok according to the law?

For reasons I couldn't vacate the flat. so I asked him for permission to continue one or two month more. For this, I think he didn't renew the agreement, the provision is already there in the agreement itself. He executed agreement with increased rent. Is it ok? He is threatening me of forceful eviction. In this renewed agreement, I have again given him the same 11 post dated cheques also. Now I am ready to vacate my flat now - after a month. (that means only one month has been extended. I am worried that he may play some mischief and create problem with the deposit money to be returned to me. What to do. Please advice me immediately. My extended one month expires on 15 /12/ 2008. I have to vacate the flat on 16th Dec., 2008. I have found another accommodation ready now.




sabina
TRAINEE JOURNALIST

[ Scorecard : 22]
Posted On 29 June 2009 at 10:52

How does one determine the amount of stamp paper to be used for rent agreement?

 




Aayesha
Student

[ Scorecard : 21]
Posted On 12 February 2010 at 15:08

Dear Sir/Madam,


I have leased my house for five years now to the same person due to the difficulty in finding a new person every year. He and his family have been paying us the rent and we renew the lease every year. After 3 years of their stay, we had made a completely new lease after exchange of cheques. They now have a telephone connnection on that address but we still pay the property tax and the society maintainence charges.

Since it has been such a long time, I am concerened if there are any potential dangers of continuing renting out our house to the same person. If there are so, are there any steps that i can take to prevent any such mishaps?


Thanking you




Gaurang Tambulwadkar
CS

[ Scorecard : 29]
Posted On 05 March 2011 at 18:39

Hi i m staying at kharghar navi mumbai on rent


I have entered into 11 months leave and licence agreement of a flat through a broker. I have duly paid deposit and brokerage to broker and landlord the receipt of which is not given to me My leave and license agreement is prepared by broker and is ready. But my broker is insisting on further brokerage and is denying to hand over agreement until i pay the same. On being asked about the receipt of brokerage he says there is no such receipt of the same. I have also talked with my landlord but he is also not co-operating.

In this situation what remedy is available to me. Please advise on the same.


 

So what

 



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