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Karthik   09 August 2023

Lease agreement violation

Respected experts.,

I have leased a vacant land for a company for a long duration & they have erected structure thereon. As per lease agreement, the lessee( company) should pay building tax to the municipality & only land tax by owner( around 10% of total tax). The municipality  authorities  telling they have not paid tax from many years. The company is telling me to pay & later they will reimburse(only tax & not interest/penalty). Is this violation of lease terms & valid reason to approach court for eviction?. They are regularly paying me rent. 

The agreement clearly states any amount payable by owner to government body can be paid by lessee & deducted from rent. So as per my understanding they can deduct land tax from rent.


 2 Replies

vasantharao venkatarao (Independent professional )     09 August 2023

The response in my view is two fold.

1. As far as the authority is concerned, receipt of the taxes is their primary concern and hence they will always look at the owner for payment of the taxes.The agreement between the landlord and the lessee is  not very relevant.

2. As far as your remedies against the lessee for eviction is concerned, definitely the breach of the lease terms would give you the rights to proceed legally against the lessee.The other clauses which are in breach if any May pl be looked into and factored while initiating your legal actions.

T. Kalaiselvan, Advocate (Advocate)     09 August 2023

If you had leased out the vacant land and have clearly mentioned that the lessee is permitted to raise structure over the vacant land at his expenses, it clearly indicates the taxes towards the structure, business, license charges are to be borne by the lessee alone and not the lessor.

If the lessee has violated the conditions of the lease agreement by not paying the building taxes for years, he is deemed to have volated the conditions of the lease agreement.

You can issue a legal notice in that aspect and instruct the tenant to vacate the leased premises due to this violation of the terms and conditions of the lease agreement

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