LEGAL QUESTION & ANSWERS ON PROPERTY MATTERS – August 2003

Q.:  I am a regular reader of Real Estate Reporter, particularly the columns, frequently asked questions and questions and answers in property matters.  Recently I was transferred to Mandya has negotiated a house for rent.  The owner insists on an agreement of 11 months only whereas I want for three years.  Please let me know what is the secret behind the eleven months agreement.

A.:  According to the transfer of property act, any document which creates interest, right in the property, for more than one year or more or the value of which is more than Rs.100/- needs registration.  Further, stamp duty payable on such documents is also more.

       To avoid the payment of stamp duty, registration charges, many people both the owners and tenant avoid rental agreements in excess of eleven months.  

        You may agree for rental agreement of eleven months with a option to renew the agreement for another eleven months, twice making total tenancy period 33 months. 

Q.:  I have constructed a residential complex which I would like to let out.  My son suggests having leave and licencing agreement, instead of lease on rental agreement.  Please inform what is the difference between rental agreement and leave and licence agreement?

A.:  In case of lease or rental agreements, you would be transferring possession o he property by retaining the ownership.  The lessee or tenant will be in the possession of the property on payment of lease amount or rent.  The tenant acquires tenancy rights.

       In case of leave and licence, you retain both the ownership and the possession, but merely permitting somebody to use property for certain specific purpose on certain condition.  Here the possession continues to be with the owner of the property, unlike in case of lease or rental agreement.

        The licence will not get any tenancy right.  What is most important is the intention of parties and not the documents.  The difference between lease/rent or leave and licence is very thin. 

        In case of any dispute, the court will rely more on intention of parties, than on what is exposed in the documents.

        Earlier stamp duty payable on leave and licence was less, but recently many states have revised at par lease agreement.  In Karnataka leave and licence agreement attracts advolerm.

Q.:  Sir, I am a Hindu widow.  I do not have any children.  I have inherited property from my father.  Please inform who will succeed to my inherited property.

A.:  Section 15 of Hindu Succession Act deals with the succession of the property owned by Hindu female.  According to that section , in absence of any legal heir, like husband, children, the property of a Hindu female inherited from her father will devolve on the heirs of her father as if the property is owned by her father.

       You have informed that you have inherited the property from your father, and you do not have any legal heirs.  So the property with devolve on the legal heirs of your father. 

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