Lease and Rentals - Are these Operational Debt under the IBC

INTRODUCTION

The Insolvency and Bankruptcy Code, 2016 (‘Code’) recognises two types of debts — financial and operational– to enable the creditors to make an application for initiating insolvency proceedings against a corporate debtor. A financial creditor and an operational creditor can initiate a Corporate Insolvency Resolution Process (‘CIRP’) under Section 7 and Section 9 of the Code, respectively. If there is a debt, other than a financial debt or an operational debt, the creditor will not qualify to apply under Sections 7 or 9 of the Code, as the case may be. Therefore, it becomes important to determine the nature of debt/claim while considering the application of an admission under the Code.
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Model Tenancy Act - Revamping the existing rent control regime

The existing rent control and tenancy legislations in the country largely tilt in favour of the tenants. They inter alia involve stringent measures on the fixation of rent and long drawn legal challenges faced by the landowners in evicting tenants. For this reason, landowners are often apprehensive of letting out their vacant premises. This has resultantly affected the rental economy and the rental housing segment across the country, adversely impacting the availability of housing facilities and affordable rental accommodation in urban areas.
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It’s settled Tenants are entitled to owners’ parking spaces

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.
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Development Manager as ‘Promoter’ under RERA regime - Deconstructing MahaRERA’s order in Shapoorjee Pallonji’s Case

1. INTRODUCTION

The Development Management Model (“Model”) has risen exponentially to meet the pace of growth and ensure expansion of real estate projects. The Model typically involves a Development Management Agreement (“DMA”) between a promoter and a development manager, wherein the latter is appointed for project execution, designing, marketing and sales of a project in consideration of a share of the revenue/profit or management fees.
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 Dispute mechanism available under a lease

How it started:

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”.
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Time is of the essence for registration of a lease

INTRODUCTION

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]’.
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RERA or Consumer Fora – Homebuyers can make the choice!

Can allottees approach Consumer Forum under the Consumer Protection Act, 1986[1] (the “CP Act”), despite the remedies available under the Real Estate (Regulation and Development) Act, 2016 (the “RERA”), if they don’t want to take a recourse under the latter? This question was long debated and the Supreme Court of India (“Supreme Court”) finally answered it in the case of Imperial Structures Limited v. Surinder Anil Patni and Another[2]. The Supreme Court held that the RERA does not bar the jurisdiction of the CP Act to deal with the complaints filed by consumers who are homebuyers or allottees of real estate projects registered under RERA. While this finding may create more challenges and complexities, such as parallel litigations and claims initiated under both RERA and CP Act, we will analyse the rationale behind this judgment.
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Lenders as Promoters under RERA regime - Analysing Haryana Real Estate Regulation Authority’s recent Order in Supertech Hues case

Introduction

The Haryana Real Estate Regulation Authority (“HRERA”) has recently delivered an unprecedented order in the matter of Deepak Chowdhary Vs PNB Housing Finance Ltd. & Ors. (“Supertech Hues case/ Order”)[1]. This Order will have implications on banks and other financial institutions, which provide credit to real estate companies, while also bringing into focus, the conflict between the rights of such banks and financial institutions vis-à-vis the rights of allottees of such projects. Despite the Real Estate (Regulation and Development) Act, 2016 (“RERA/Act”), contemplating mortgage loans to be the “first funders” of a real estate project[2], the HRERA has passed an order, which may have implications on secured lenders when it comes to exercising their rights to enforce their security.
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Real Estate Collaborations & Significance of Corporate Due Diligence 

Introduction

India’s real estate sector has been witnessing critical changes since the last few years, including the promulgation of the Real Estate (Regulation and Development) Act, 2016 (the “RERA Act”). The implementation of the RERA Act has pushed the sector to organise and standardise operations and management of real estate entities. The checks and balances imposed by the RERA Act and liquidity crunch faced by the real estate market has forced the dislodgment of small and unorganised players. Owing to such changes, the real estate market is now witnessing a phase of consolidation and collaboration.
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The disruption that Covid-19 has brought about is for everyone to see. Businesses across all sectors have been severely impacted due to the several versions on lockdown orders issued by the central and state governments from time to time.

Given that all enterprises continue to scamper to preserve cash and reduce costs, one of the major payouts that all businesses are actively trying to avoid or minimize exposure to is rental payouts. Two of the most obvious questions in this regard have been:


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