Jim 04 August 2015

Giving a shop for rent

Hi,

We have our house along with some plot in a commercial area in Tamilnadu. We are thinking of building a shop and giving for rent. I want to know the risks and whether it is safe for the owner to give for rent. It would be a tea shop. I would like to know what is the best type of agreement to deal with. I read like Leave and License is better in some approach. Would it be safe in this type of shop? Can the tenent/licensee can get registration from the municipality for running the business with this type of agreement?

I would like to discuss some more issues as well. Actually the plot is int the name of my father and he is no more. My mother and children are the leagl hires now. We didnt change the property to my mother's name. So, can my mother issue the license/lease agreement?

If we go for leave and license agreement, if the tenent fails to vacate what would be the next step? Could he prolong or claim the property on his own at any cause? I hear from one of my friend that one of the tenent filed a case against the owner and he got the property on his name. It was shocking for me. Could it be possible in any case?

Kindly help me as I am very new to these things. Also, if possible kindly draft me a well formed agreement that would suit in this case.

Thanking you very much.

Regards,

Jim.

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3 Replies

rajagopal.s (Lawyer.) 04 August 2015

I will suggest the following steps

A) all of the legal heirs can authorise your mother to act as a power of attorney holder through a registered power of attoreny and can authorise her to let the property on lease.

b)You can get the property transferred to your mother's name by effecting a settlement deed at Sub Registrar office. this will be the safest way for transfer of property and thereafter your mother can let the property on lease.

c) Tenancy agreement: Please enter in to a tenancy agreement with any tenant for a fixed period by using the stamp papers. if you can afford have the tenancy agreement registered. this should give you a factor of safety in case you want to vacate the tenant at a later date.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 04 August 2015

The agreement you make with your tenant affects what rights you will have. You may sign a written agreement called a lease. A lease lists the names of the landlord and tenant, the address of the apartment, the length of the lease, and the day the rent is due. Most leases contain much more than this.

Jim 05 August 2015

Originally posted by : rajagopal.s
	HI I will suggest the following steps A) all of the legal heirs can authorise your mother to act as a power of attorney holder through a registered power of attoreny and can authorise her to let the property on lease. Or b)You can get the property transferred to your mother's name by effecting a settlement deed at Sub Registrar office. this will be the safest way for transfer of property and thereafter your mother can let the property on lease. c) Tenancy agreement: Please enter in to a tenancy agreement with any tenant for a fixed period by using the stamp papers. if you can afford have the tenancy agreement registered. this should give you a factor of safety in case you want to vacate the tenant at a later date.

Thank you Adv. Rajagopal.S for your valuable reply. I would like to ask for a few more clarifications, hope you would be happy to help me.

Regarding giving power of attorney to my mother, how it should be executed? Is it through a Notary public or through some other means. I am not aware of this please give me more information. Also, one of my brother is currently outside India. So, can he sign for this document from there itself(through post)? or does he need to come to India to do the same? If there is an alternative way please tell me.

Regarding the agreement, you have mentioned it should be a tenancy agreement, is it the same as lease agreement or is it a different one? can you post any link of online samples if any? Probably you would know why you have chosen this type. But can you let me know cant we go with a Leave and license agreement? What is the duration we can mention in the agreement, I read from the internet, if the agreement is only for 11 months there is no need of registration. Is that true? if so will it be safe for the owner in case there is a dispute? If I am going for 11 months agreement, and if the same tenant continues to stay for a prolonged duration(many years, say 20 years) with agreement being renewed for every 11months, will it be a problem at a later stage?

If we were signing a tenancy agreement, what is the risk of owner in the future? I believe, this type of agreement let the tenent with more rights on the property. I think there is also some level of rights for the tenant to extend the duration of stay through the court. Can you also tell me by any chance could he claim the property? Why I am asking these thing is one of my friend said that one of the tenant in the nearby town won a case like this. I am not sure if it is a genuine news.

Also, is there any limit on the security deposit? Should it be any times of the rent? How about the rent rates? Can I decide based on the near by shops? or is there any Govt. guidline which I should follow?

Sorry for writing a long essay, hoping to get a positive reply from you. Thanks.