1) increase in rent is after completion of 11 months ie from September 2021

2)you are bound to pay arrears of rent 

The lease shall be for a period of 3 years beginning 
from 21st October 2020, and renewable with 5% escalation on the rent after completion of 11 months every year."

You have to pay escalation charges on completion of 11 months 

1. As per the narration, the increase in rent is effective after completion of eleven months in two thousand twenty one.

2.  However you can negotiate with the landlord saying that you had interpreted that the five percent escalation will be enforced only after renewal of lease deed in two thousand twenty three.

1. After every 11 months

2. If you can not pay the arrear rent you can leave the premises. 

1. The 5% increase in the monthly rental payment will be with effect from completion of the 12 months from the original date of lease agreement, i.e., it will be effected 21.10.2021 and every year thereafter.

2. Since you have agreed and accepted the terms as stated in the lease agreement you are bound by the clauses and have to pay the arrears of rental amount as well as the enhanced rental amount whether the landlord has intimated to you earlier or not.

Please note that the enhancement of monthly rental amount shall be given effect after completion of one year i.e., 12 months and not on completion of 11 months, this clause of increase in monthly rental amount after 11 months  makes no sense and cannot be legally valid. 

Renewable after 3 years has nothing to do with the enhancement of monthly rental amount every year, if you have understood that way as you have stated here then it is a misinterpretation of the clause/law.

Dear Client, I understand this is a challenging situation for you.

1. As per the lease deed, the rent escalation clause states that there should be a 5% escalation on the rent after completion of 11 months every year. This means that the rent increase should apply immediately after the completion of 11 months from the start of the lease in 2020. Therefore, the rent should have been increased in 2021 and every year thereafter.
2. If the landlord is now claiming arrears for the increased rent since 2021, and you have been paying the same rent since 2020 without any prior communication from the landlord, there may be a misunderstanding or misinterpretation of the lease agreement.
3. Try to negotiate with the landlord to reach a mutual understanding regarding the rent arrears. If there was a genuine misunderstanding or lack of communication, you may be able to come to a resolution without legal intervention.

If you are satisfied with the reply, kindly give me a 5 star rating.

Regards,
Arunkumar Khedia
Advocate Bombay Highcourt.

It will be as per the agreement 

1. As per Karnataka Rent Act, 1999, the landlord can lawfully increase the rent per year by an amount not exceeding ten percent of such cost. 

- Hence, the rent will be applicable after completion of 12 months and not 11 months.

2. The rent can be increased if there is clause mentioned in the lease deed/rent agreement , otherwise legally the landlord cannot increase the rent in the absence of any agreement. 

- Hence, if there is no clause in the agreement then you can deny to pay the same 

Dear Client,

Here’s a detailed analysis and response to your questions based on the lease agreement and relevant legal provisions:

Lease Agreement Interpretation:

Question #1: When is the rent increase applicable?

Lease Clause: “The lease shall be for a period of 3 years beginning on October 21, 2020, and renewable with 5% escalation on the rent after completion of 11 months every year.”

Based on this clause, the rent increase is applicable every year after the completion of 11 months, not after the lease renewal in 2023. Therefore, the first increase would have been due on September 21, 2021, the second on August 21, 2022, and the third on July 21, 2023.

Question #2: Landlord’s Claim for Arrears

Since the landlord has never raised this issue before and there was no communication regarding the rent increase, there are certain considerations under the law:

Legal Provisions and Principles:

1. "Contractual Terms":
Section 70 of the Indian Contract Act, 1872: When a person lawfully does something for another person or delivers something to him without intending to do so gratuitously, and the other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.
Section 115 of the Indian Evidence Act, 1872: Estoppel by conduct, where if a person has, by his declaration, act, or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing.

2. Reasonableness and Communication:
Section 106 of the Transfer of Property Act, 1882: In the absence of a contract or local law or usage to the contrary, a lease of immovable property shall be deemed to be a lease from month to month, terminable, on the part of either the lessor or the lessee, by 15 days’ notice expiring with the end of a month of the tenancy.
The landlord’s delay in raising the issue of rent increases and the absence of any prior communication may be considered unreasonable and could be argued to have waived the right to claim the increased rent retroactively.

Steps to take:

1. Review the Lease Agreement: Carefully read the lease agreement again to ensure there are no additional clauses that clarify the rent escalation terms.

2. Communicate with the Landlord: Write a formal letter or email to the landlord expressing your understanding of the lease agreement. State that there was no prior communication regarding the rent increase and that you have been paying the agreed rent of Rs. 23,000 per month.

3. Negotiate a Settlement: If the landlord insists on the arrears, negotiate a possible settlement. Given the absence of prior communication and the sudden demand for arrears, you can argue for a reduction or a waiver of the alleged outstanding amount.

4. Seek Legal Advice: Consult a legal expert specialising in property or tenancy law. They can help draft a formal response and guide you on how to proceed if the landlord continues to demand the arrears.

Pay amount as per old agreement .say any renewals have to be as per mutual understanding 

inform the landlord that you are not interested in renewing agreement as new rentals are not affordable and you shall we vacating premises after period of one month 

If the original agreement fixed in the year was 23000, the enhanced rent @ 5% is payable in the year 2021, which will be 24150 and the same is payable at Rs. 25360  in the year 2022 and it amounts to 26630 in the year 2023 and it will be Rs. 27960 in the year 2024.

Therefore the demand for Rs. 40,000 in the year as monthly rental amount is exorbitant.

You can calculate the arrears of rental amount due to the difference in enhancement every year and inform him that you can pay that amount as well the actual amount as per the calculation given above. 

You can refuse to pay exorbitant rental amount and also refuse to vacate, besides you can approach the rent control court or civil court seeking an order of injunction agaisnt the landlord to restrain him from forcibly evicting you other than by due process of law.

Dear Client, 

So, this is what you can do... 

• Review the Original Agreement

Escalation Clause: For instance, if the initial agreement for salary increment was at 5 percent annually, they expect you to stick to the same formula unless a new arrangement is made and put down in writing.

Expiry of Agreement: Specifically, when the initial deal concluded in 2018, there have been no extensions or new conditions set to replace it; however, you operate legally on a month-to-month basis until new terms and conditions are established.

• Communication and Negotiation

Discussion with Landlord: You should also try to speak to the landlord regarding the rent rise that is in place for the flat. Point out that since the escalation of the rate was not accompanied by a new agreement on the matter or a new contract, the raise should be implemented strictly in accordance with the increase previously agreed upon.

Written Agreement: Better make sure that any new terms are put in writing so that others can’t take advantage in the same way in the future.

• Legal Standpoint

Validity of Rent Increase: Unless the landlord secures a new signature for a new agreement, legal means exist that forbid this action, by which the landlord begins to unilaterally alter the terms of the rent and demands back payments according to those terms.

Payment of Arrears: You remain bound by the terms of the original agreement and thereby you will be expected to pay the arrears as outlined by the 5% escalation clause, not the new rate which has been singly decided.

• Steps to Take

Arrears calculated on the original terms and conditions Working in this calculation The formula in working with this calculation The formula in working with this calculation The formula in working with this calculation Arrears calculated based on the above-mentioned original terms and conditions can be determined by the following calculations: Working in this calculation: Arrears = Credit terms – Actual payment Credit terms are the original terms that were agreed upon between the supplier and the buyer while the actual

Based on this seeming disparity, determine the new total rent which is 5% above your last agreed rent, and then calculate the rent arrears from October 2023 to May 2024.

Communicate Your Position

Draft a letter or email to the landlord explaining your position. It is also important to confirm that there is a new agreement or an extension on the previous deadline. For that reason, state it in writing that: The current terms apply, including the 5% escalation clause due to the lack of a new agreement.

In conclusion, based on the current tenancy agreement that has not been altered, you cannot be expected to pay the arrears based on the new rent demand of Rs. 40, 000 without a new agreement being initiated and signed. You should work on the escalations based on the provisions of the agreement where the rate increases by 5% every year and that should be communicated to the landlord. Moreover, it is always useful to talk to a legal professional to ensure your rights are covered and to manage potential conflict.

- No, randomly the landlord cannot increase the rent without informing the tenant in advance , and specially when it is no mentioned in the agreement. 

- Since, the last agreement already expired , then new agreement will be affected from its date of execution 

- Hence, you are not bound to pay the increased rent arrears