Often when units are given on leave and license basis to tenants, Co-operative Housing Society’s (CHS) prior approval is obtained, or intimation is provided, whichever is prevalent as per the bye-laws of the CHS. CHS’s however refrain from letting owners give their tenants a right to park in the car parking space appurtenant to such unit, to enable the CHS to rotate the car parking slots among its members only.
Continue Reading It’s settled: Tenants are entitled to owners’ parking spaces
It started with the case of Booz-Allen & Hamilton Inc v. SBI Home Finance Ltd & Others (“Booz-Allen”), wherein the Supreme Court, after hearing the matter, held that the disputes relating to eviction and tenancy were not arbitrable. Leases are governed under the Transfer of Property Act, 1882 (“TOPA”). The court discussed the nature and scope of issues arising for consideration in an application under Section 8 of the Arbitration and Conciliation Act (“Act”) wherein “even if there is an arbitration agreement between the parties, and even if the dispute is covered by the arbitration agreement, the court where the civil suit is pending, will refuse an application under Section 8 of the Act, to refer the parties to arbitration, if the subject matter of the suit is capable of adjudication only by a public forum or the relief claimed can only be granted by a special court or Tribunal”.
Continue Reading Dispute mechanism available under a lease
More often than not, the central procedural question on the minds of parties entering into a lease deed is whether the registration thereof is mandatory. This central query pervades the gamut of situations ranging from lease of residential to commercial properties, and from short-term to long-term leases.
The law governing registration of lease deeds is primarily contained in the Registration Act, 1908 (“Registration Act”) and the Transfer of Property Act, 1882 (“TOPA”). A lease of an 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 specified occasions to the transferor by the transferee, who accepts the transfer on such terms as defined in Section 105 of TOPA. According to the Registration Act, ‘lease includes a counterpart, kabuliyat, an undertaking to cultivate or occupy, and an agreement to lease[1]’.
Continue Reading Time is of the essence for registration of a lease
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.
Continue Reading Termination of Leases – Express or Implied?
With a lot of disruption and backlog due to coronavirus, all industries, along with the real estate sector, have taken a massive hit. The year 2019 was not such a progressive year and everyone was counting on 2020 to recover and improve from last year’s lows. However, the real estate sector is in a deep standstill on the back of the global economic crisis, coupled with the COVID-19 situation.
This scenario calls for anyone to take precautions and due to restrictive movement because of the travel ban and the stock market crash, developers for one are not looking to take any chance in blocking their money in launching any new projects. At this point, one of the challenges being faced by them is the impact on contracts/agreements due to COVID-19, which are currently in motion/existence. The question being raised is whether the COVID-19 pandemic calls for a force majeure consideration in the existing contracts. Force majeure clause acts as a protection to parties wherein due to any unforeseen circumstances, either of the parties are unable to fulfil their commitment as per the agreed terms and conditions of the contract. To put it simply, due to any acts of god such as fire, flood, war, etc., parties are unable to perform their part as it is not reasonably within the control.
Continue Reading COVID-19: Impact on Real Estate
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.
Continue Reading Growing commercial leasing, what to keep in mind.
The announcement of the Union Budget 2019-2020 (Budget) by the Finance Minister, Ms. Nirmala Sitharaman, introduced a few changes in the periphery of the real estate sector. On July 10, 2019, the housing ministry put a policy in the public domain for suggestions, which could act as the model act for States and Union Territories to regulate this segment. The Model Tenancy Act, 2019 (Model Act), takes forward what was proposed in the Draft Model Tenancy Act, 2015.
With property prices far beyond the reach of many millennials, renting has the opportunity to become a far more common housing option. The Model Act brings in transparency enabling a two-fold mechanism wherein the landowners will be less vary of a possible threat of repossession and will let-out their homes to yield rent, which will in turn increase the footing for the real estate market. The concept of sharing spaces both living and working viz. a viz. ownership, presently being the market preference, have been covered under the Model Act.
Continue Reading An Overview of Model Tenancy Law
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.
Continue Reading Lease Transactions Under RERA