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A lease agreement is a legally enforceable contract in which a lessor (property owner) gives a lessee (tenant) the right to use immovable property for a set duration in exchange for rent. It defines the mutual obligations of both parties, ensuring a transparent and enforceable relationship.
This article seeks to provide a clear explanation of lease agreements, with a focus on the legal rights, obligations, and termination provisions for both the lessor and the lessee under Indian law.
A lease agreement, as defined under Section 105 of The Transfer of Property Act, 1882, is a legal contract in which the lessor (owner) transfers the right to use and enjoy immovable property to the lessee (tenant) for a specific period or permanently, in exchange for rent.
This rent can be paid in the form of money, a share of produce, services, or anything of value, either on a regular basis or as agreed. The price paid upfront, if any, is known as the premium.
In essence, a lease transfers the right to use the property on agreed-upon terms rather than ownership.
According to Section 108 of the Transfer of Property Act, the lessor has the following rights and duties:
Lessor’s Rights
1.Right to Rent:
The lessor has the right to timely rent payments and to ensure that the lessee follows the terms of the contract.
2.The Right to Reclaim Possession:
If the lease expires or the lessee violates the terms, the lessor may repossess the property.
3.Right to Inspect:
The lessor has the right to inspect the property on a regular basis.
4.Right To Legal Action:
If the lessee violates the lease, the lessor may take legal action and evict them.
A legal consultation is recommended prior to signing a lease. You can contact Adv. Abdul Mulla at www.asmlegalservices or www.lifeandlaw.in.
Duties of the Lessor
1.Disclose Hidden Defects:
Must notify the lessee of any non-visible flaws that may affect use.
2.Hand over possession:
Required to give the lessee possession of the property.
3.Allow for Peaceful Enjoyment:
If the lessee pays the rent and follows the terms, you must not obstruct them.
Under Section 108, the lessee has numerous rights and must perform specific duties:
Rights of the Lessee
1.Right To Possession:
As stated in the lease, you are entitled to take possession.
2.Right of Peaceful Use:
You can use the property without interference.
3.Ability to Deduct Repair Costs:
Can repair the property if the lessor fails to do so and deduct the costs from the rent.
4.Right to Set Off Payments:
If the lessee pays charges that the lessor does not, the amount might be deducted from their rent.
5.Right To Remove Fixtures:
Can remove items installed during the tenancy to restore the original condition.
6.Right to Harvest Crop:
They can take the product even after the lease expires if they cultivate it.
7.Right To Sublet:
Can transfer lease rights if not prohibited by the agreement.
8.Right to Terminate the Lease:
Can end if the property is rendered unusable due to fire, flood, or tragedy.
The Lessee’s Duties
1.Notify the Lessor of Material Facts:
Must notify about anything that affects the property’s value.
2.Pay your rent on time:
Payment must be made within the agreed-upon period and place.
3.Maintain Property:
Should keep the property in its original condition.
4.Report Legal Threat:
If the legal rights of the property are jeopardised, you must tell the lessor.
5.Use Properly:
Property can only be used for the purposes agreed upon.
6.Avoid Permanent Structures:
Permanent structures cannot be built without approval, save for farming.
7.Returned Property:
Possession must be returned upon termination of the lease.
According to Section 111 of the Transfer of Property Act, lease termination can occur under the following conditions:
A lease agreement is an important legal document that protects the rights and duties of both the lessor and the lessee. It ensures clarity on critical issues like rent, occupancy, maintenance, and usage, while also establishing well-defined termination terms to help avoid future disputes.
To ensure legal compliance and avoid difficulties, get experienced advice before signing any lease. You can contact Adv. Abdul Mulla through his legal websites, www.asmlegalservices and www.lifeandlaw.in.
Adv. Abdul Mulla (Mob. No. 937 007 2022) is a seasoned legal professional with over 18 years of experience in advocacy, specializing in diverse areas of law, including Real Estate and Property Law, Matrimonial and Divorce Matters, Litigation and Dispute Resolution, and Will and Succession Planning. read more….
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