1.

Is the leave and licence agreement generally signed in multiples of 11 months or 12 months? Is there any stipulation of time?

Formerly leave and licence agreements used to be signed in multiples of 11 months or 12 months. After The Maharashtra Rent Control Act,1999 came into force from 1.3.2000 there is no stipulation as to whether leave and licence agreement should be in multiples of 11 or 12 months, and there is no stipulation as to total time period.However Leave and licence agreement generally does not exceed three years.

TOP

2.

Can premises already encumbered to a bank be leased out to a Company with a high deposit and in case of a default who holds the first lien? And will the Company/Occupant be evicted?

Yes premises already encumbered to a bank can be leased out to a Company with a high deposit. However you may require the No-Objection of the bank. If the deposit monies are with you and in case if you default on payment to the bank,obviously you will continue to hold the deposit money. The Co./occupant can be evicted only if there is a provision to that effect in the lease Agreement.

TOP

3.

Is Business Centre Agreement done for Commercial Premises safe?

If the Business Centre Agreement is genuinely a Business Centre Agreement then it is safe to use commercial premises as such business center, since you shall be in physical control of the premises

TOP

4.

Is registration of a Leave and Licence mandatory and what are the consequences if the same is not registered?

As per Section 55 of the Maharashtra Rent Control Act,1999 registration of Leave and Licence Agreement is compulsory and it is the responsibility of the landlord to ensure registration. If the same is not registered, the landlord would be prosecuted and on conviction he’s subject to upto three months imprisonment or be subject to fine not exceeding Rs.5000/- or with both. Further in the absence of a Registered Agreement, the contention of the tenant, about the terms and conditions on which the premises have been given to him by the landlord shall prevail unless otherwise proved.

TOP

5.

How do I determine the property tax on the rent received as I have given the premises on higher rent to a Company? Are there any guidelines set by the BMC?

The calculation of property tax on rent cannot be generalized and depends on various factors, but however if the premises are rented out to banks, companies, multi-nationals, etc. who are exempted from the provisions of the Maharashtra Rent Control Act,1999 by virtue of Section 3(1) (B) of the Act then the rates of property taxes could be as high as 60% or so. If the premises are rented out to others, who are protected under the Rent Act, the Mumbai Municipal Corporation cannot charge taxes on the actual rent and have to base their taxes on Standard rent defined under the Act, which is, in most cases lower than the actual market rent.

TOP

6.

Society charges us heavy amounts and even deposits if we give our apartment on Leave and License basis without payment of past dues which are in litigation? Would occupation by the occupant create more trouble for him and me?

Although there are no fixed rules on the subject. However the society must be reasonable in all matters and if it is charging an exorbitant amount you could approach the Registrar of Co-operative Societies.

TOP

7.

The society refuses to give us NOC for leasing the apartment on leave and licence basis without payment of past dues which are in litigation? Would occupation by the occupant create more trouble for him and me?

If the society is not giving you its No-objection and you still give your flat out on leave and licence, the society could file a suit against you and the licencee and take legal action.

TOP

8.

What is the difference between lease and leave and licence agreement?

Lease is defined under Section 105 of The Transfer of Property Act,1882 and a lease of immoveable property is a transfer of a right to enjoy such property for a certain time or in perpetuity on consideration to be rendered periodically or on specified occasions, while a licence is defined in Section 52 of the Indian Easement Act,1882 and it does not create any interest in the premises in favour of the licensee excepting a mere right to use and occupy the premises for a limited duration. Both documents have now to be registered. A lease deed is required to be stamped and registered. However the stamp duty payable on lease is more than on Leave and Licence for a period upto three years. For a period exceeding three years the stamp duty is same for both agreements. The implications of entering into a lease agreement would be: i) That stamp duty would have to be paid ii) That the document would have to be registered iii) That Municipal taxes may go up iv) Of course, Income-tax would have to be paid on your income; and v) The question of Wealth-tax would have to be considered. One property is exempt from Wealth-tax. However, if you have any other property, this implication would have to be considered.

TOP

9.

Is it safe to give ownership flat for leave and license? What are the problems if I give for a longer period?

Yes, it is safe to give ownership flat for leave and license provided an agreement has been entered into to that effect and the same leave and license agreement has been registered with the Competent Authority under the Maharashtra Rent Control Act,1999.

TOP

 10.

What should I do if my tenants are not paying the rent and also not vacating for the residential & commercial property I own?

In those residential and commercial properties owned by you and occupied by people who are not paying rent you may serve a notice in writing to the tenants for demand of the standard rent in the manner provided in Section 106 of the Transfer of Property Act,1882(IV of 1882) and after expiry of 90 days and the rent has yet not been submitted by the tenants you may then file a suit for eviction of the tenants under the Maharashtra Rent Control Act,1999 and recover possession of the tenanted premises under Section 16 of the said Act.

TOP

11. 

If the landlord does not repair or maintain property, staircase, terrace and the tenants want to do, can they and can they deduct rent from the landlord if he does not share.

If the landlord does not repair or maintain the property, the tenant could after giving sufficient notice to the landlord do so carry out repairs which are necessary and deduct the cost thereof from the rent.

TOP

 12.

How can we evict tenants who do not pay or have made changes in their flats?

You can evict the tenant who is not paying rent or who has made permanent alterations/additions in the premises by giving him notices to this effect as required under law and proceed against the tenant in a Court to evict him.

TOP

 13.

Can the properties (residential/commercial) be given on rent if not required for immediate use?

Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation.

TOP

 14.

How does one determine the market rental value of a particular property?

The market rental value of a property can be found out by approaching such people as the brokers, registration authority etc as there is no prescribed manner for the same.

TOP

 15.

How many months of deposit rent can the landlord ask for?

The landlord can ask for a three months deposit rent.

TOP

 16.

In case a tenant is not protected by the Rent Act, what is the procedure to ask him to vacate?

The general procedure is to send a notice to the tenant, failing which a courtcase can be filed and it generally takes years to reach a verdict.

TOP

 17.

If I am a tenant of a property (old rental) in Mumbai, can I transfer my tenancy? If yes, then what amount of money can I demand from the landlord for the transfer of tenancy?

Yes, you can transfer the tenancy, with the permission of the landlord. It is at the market rate, the norm being that the landlord shall be entitled to a one third share.

TOP

 18.

Is the registration of Leave and Licence compulsory?

Yes, as per Section 55 of the Maharashtra Rent Act1999.

TOP

 19.

Is a leave and license agreement with a bank, PSU, Corporation companies exempt from registration?

Section 3 of the Maharashtra Rent Act exempts certain categories of persons. According to that section any premises let or sublet to a bank or any public sector undertaking or a limited company having paid up share capital of one crore and more is outside the purview of the Maharashtra Rent Control Act.

TOP

 20.

Do I need permission of the Society to keep a Paying Guest and are there any extra society outgoings I need to bear?

Yes, you need permission of the Society for keeping a Paying Guest. It depends on the Society byelaws and rules. Some Societies keep asking for extra outgoings by way of Non-Occupancy charges.

TOP