Hello, I own a house in Indore (M.P.) which I am planning to rent out but I live in Noida (U.P). I have three questions as mentioned below.. 1. I noticed that in rent agreement its mentioned that in case of any dispute judicial area will be Indore (M.P.) , can I make it as Noida (U.P.) since I live here or it has to be Indore (M.P.) only as property is in Indore ? 2. My Second Question is - Do I need to buy a stamp paper from Indore (M.P.) Or I can use the Noida (U.P.) stamp paper where I currently live ? 3. Also Can I add following clause LEGALLY in the agreement ? "if tenant continue to be tenant of the property after expiry of this rent-agreement (of 11 months) then it would be presumed that the tenant agrees to increase rent by 25% on EACH SUBSEQUENT YEAR on THE PREVAILING RENT." I do not have knowledge to draft legal document. please redraft the above language. In my opinion getting property vacated is too difficult but it is easy to claim enhanced rent through court. On the 1st date court would ask tenant to deposit enhanced rent in court till final judgment and rent as per this clause would come as: Ist year= 100; 2nd year = 125; 3rd year = 156.25 ; 4th year = 195.25; so on.. Compounding increase in rent would force tenant to vacate home instead of fighting case. Thanks KK
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1) jurisdiction woukd be courts at Indore
2) buy stamp paper from Indore only
3) you should add clause that if licencee fails to vacate premises on expiry of leave and licence agreement then licencee be liable to pay penal rent of x amount
4) get leave and licence agreement drafted by lawyer
1. It will be Indore only since the property is situated there.
2. Stamp from any place can be used for the agreement it won't have any effect.
3. See yes you can add this clause further it can be written as " Renewable clause : in case the tenant continue occupying the said premises as tenant then in that condition he hereby agrees to abide by this agreement terms and further agrees to pay the increased rent of 25 percent each year after this agreement expire"
See further if tenant continue to live in the premises after the expiry of the period then it is advisable to make new agreement.
Noida alone will have jurisdiction if there is a court proceedings. Also buy stamp paper from noida. Always wr the property is situated have jurisdiction.
If your agreement goes beyond 11 years it need to be registered. U can insert that clause of enhancement provided the tenant agrees.
Dear Cleint,
Civil jurisdiction of court cannot be decided by parties. It will rest where property exits and cause of action arise.
Any one can buy stamp and from any where In India except J&K.
Yes, automatic renewal term can be this.
Court will ask to make rent payment, failure to which eviction.
Hi
1) As per Section 16 of Civil Procedure Code, suits pertaining to property shall be instituted in the court within the local limits of whose jurisdiction the property is situated. Since the property is located at Indore (Madhya Pradesh), the courts at Indore alone will have jurisdiction over the rental agreement.
2) The Stamp paper can be purchased in any of the state of your choice. However if you choose to register the rental agreement in a sub registrar office, registration and stamp duty shall be as per Rules prevalent in Madhya Pradesh. Also since you are planning for 11 months agreement, it is not mandatory to register the rental agreement.
3) A 11 Month rental agreement should not have any extension clauses or escalation clauses. If any of the wording in the rental agreement indicates a tenure beyond 11 months, then you need compulsorily register the rental agreement by paying registration charges and stamp duty at Madhya Pradesh , failing which the rental agreement will be void in eyes of law.
4) The best option would be to enter to a fresh rental agreement at the end of 11 months or opt for fixed tenure rental agreement with rental escalation clauses and register the rental agreement by paying stamp duty and registration charges.
Hope this information is useful.
1. property is in Indore, so courts have jurisdiction over the property in Indore can try the dispute
2. Indore
3. not advisable - you need to write that in case the tenant does not hand over possession on stipulated expiry date then he will be considered as a trespasser and unauthorised occupant for every day during which he continues to live in the property and will be liable to pay double the rent towards damages
1. The property is situated in Indore hence the jurisdictions for litigation may not fall in NOIDA.
2. You can use the NJ stamp paper purchased in UP also, however if the tenant hails from Indore, you may ask him to purchase the stamp paper from Indore itself, because the expenses for this agreement shall be borne by the tenant and not the landlord.
3. The enhancement in rent for the period of stay beyond the rental agreement is exorbitant and may not stand valid if you want to enforce it.
You cannot make any such agreement instructing the tenant to deposit the rent in court, what if he does not ?
This cannot be enforced, you can evict him instead.
Discuss with a local advocate at length and decide further course in this regard.
1. It will be at Indore only since theproperty is at Indore.
2. Since the notarisation or registration of the agreement will eb done at Indore it is advisable that the stamp paper also is bougfht from Indore otherwise the Notary Public might refuse to notarise the said agreement printed on a stamp paper purchased from Noida vendor.
3. Addition of such clause is not advisable since by it yiu shall admit that he can continue to stay in your premises even after expiry of the tenure of the agreement.
Judicial area for this property will only be Indore and this time paper should also be purchased in the same territory where the judicial area is.
Any agreement which is made for more than 11 months then this will be a Lease Agreement and this agreement should be registered and payment of stamp duty which is required to be paid at the rate of 3%.
This is not invalid to increase to increase the rent at the rate of 25% if both the parties are agree and stamp duty in this regard has been paid.
You can find out and advocate and explain your conditions that that the party is agree too and you can draft the agreement and later you can get it registered.
Thank you All ! Can you please let me know the difference between "Rent Agreement" and "Leave and License agreement", I would like to go for 11 months agreement, which one should I write on the heading of the agreement ?
you should enter into leave and licence agreement for 11 months .
2) A rental agreement gives a tenant certain rights to the property.
3)
Under license agreements, the legal ownership and the possession of the property remain with the licensor. In other words, a license does not create any interest in the premises in favor of the licensee.
Leave and license agreement gives a mere right to use and occupy the premises strictly subject to the license terms
whereas rent agreement confers a greater right of possession on the tenant
a licensee cannot transfer and assign his rights under any circumstances
whereas a tenant can assign and transfer his right with permission of landlord
So go for Leave and License agreement
Rent agreement not requires registration is executed for 11 months and leave and license agreement granted for the specified purpose and duration and legal possession stays with owner.
1. Rent agreement is gioverned by Tenancy Act of the concerned State whereas the Leave and License Agreement is for giving license to said person to stay at your premises.
2. It is much easier to evict a licensee tnan a tenant by filing eviction suit.
See Leave and license is one kind of rent agreement which gives limited rights to the tenant so you should go for a leave and license agreement.
A rental / lease agreement cause a transfer of interest from the owner to thetenant, or lessor to the lessee. ... 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
Both can be made for 11 months itself.
The leave and license agreement may be registered but the 11 months rental agreement is not mandatorily to be registered.
Thanks ! 1. So what I understood is that Leave & License agreement can be done for 11 months as well but it has to be necessarily registered, is that correct ? OR 11 months "Leave and License agreement" is also not mandatory to register ? 2. Is Leave and License agreement can be done across India or only in some states ? 3. If only in some states then please confirm if its legally valid in Madhya Pradesh (M.P.) and Uttar Pradesh (U.P.) both ?
1. Your understanding is right
2. It can be done only in the place where the property situate.
3. L & L is valid in MP and also in UP.
1. Not mandatory to register notarized will do and is valid.
2. It can be done across india.
2. Yes it is valid in both state.
in states like Maharashtra registration of leave and licence agreement is mandatory
2) local lawyer can guide you whether it can be done in UP , MP or not
You decide the jurisdiction as per your agreement. You can buy stamp paper any place. Yes you can add any legitimate clause in the Agreement
The section 17 of Registration Act provises leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent; months requires compulsory Registration.
However a lease agreement of 11 months does not require compulsory Registration.
In my view an unregistered lese argeement of 11 months is legally valid document.
1. No. Leave & License Agreement can be executed for any period of time. In case it is for a period of one yearvor more, it is required to be registered. Any suah agreement for a perriod less that one year need not be registered for which land lords go for L & L Agreement for a period of 11 months which is not required to be registered and can be continued to be renewed thereafter..
2.& 3. The subject of tenancy is a State matter. L & L Agreement can be executed all over India since it is an agreement to grant leave and license to some one in connection with your house property and not a tenancy. However, Decisions of Local High Courts in connection with the matter should be treated as guiding principal of the said State though the same can be chalenged in the Supreme Court.