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Associate in the Mumbai office of Cyril Amarchand Mangaldas. She has vast experience in handling commercial leases/ licenses and sale agreements for acquisition of luxury residential premises by High Net Worth individuals. She is also involved in large transactions for acquisition by corporates of land parcels throughout India. She can be reached at sana.ahmed@cyrilshroff.com

Termination of Leases – Express or Implied 

Landlord-Tenant relationship is a jural relationship and is governed by the provisions of Transfer of Property Act, 1882 (Act). In a landlord/tenant relationship, the parties are often referred to as lessor (landlord) and lessee (tenant). The contract under which the landlord-tenant relationship is bound is a lease agreement. The term ‘lease’ is defined under Section 105 of the Act and states as follows – 

“A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specific occasions to the transferor by the transferee, who accepts the transfer on such terms”. Thus, a lease of an immovable property is a contract between two principal parties the lessor and the lessee, whereby the lessor creates an interest in favour of the lessee with regard to property for a specific duration.
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Growing commercial leasing

In keeping with the trend in real estate space, both local and foreign corporates have accepted the norm of leasing spaces to conduct their business activities in India. In metro cities, demand for commercial spaces have led to time renewal of existing lease/license as well as spike in request for additional space. The demand for leasing of residential spaces, in comparison, has been as robust.

What does one keep in mind while leasing a commercial space and how important is the role of a legal advisor and other service providers in relation to such an acquisition? We have tried to sum up some of the key factor contributing to the development of this leasing sector and some of the sector specific services required.
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Lease Transactions Under RERA

Real estate is one of the largest industries in India. In the past two decades, the real estate sector has seen a boost in the country, in terms of the quantum of development (commercial and residential properties) and the price of properties. In spite of the same, real estate has remained the most unregulated of sectors, with every State having a different law to regulate properties. Hence, there was no single superior legislation, which would govern this industry.

The absence of a specific, stringent law for this industry led to exploitation of buyers of the property, by the developers. For example, there could be excessive delay in construction and handing over possession of property, biased/arbitrary contracts, deduction in the usable area of the property by developers, and a lack of transparency in the sector, and such like. Due to these issues, the Government of India, introduced a central legislation viz. the Real Estate (Regulation and Development) Act, 2016 (Act) to regulate the real estate industry, resolve the issued faced by buyers and bring transparency in this sector. All the States have been mandated to form the Real Estate Regulatory Authority for the implementation of Act and form rules and regulations under the same.
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