Is thesystem of leave and license completelysafe and free of lope holes(RESIDENTIAL AND COMMERCIAL)in INdia?
Answer:
Alongside gold, real estate has long been a popular investment option. However, sound investment in real estate calls for some expert advice from advocates, architects, engineers, property maintenance managers and so on to ensure reasonable returns and appreciation. Of course, real estate properties always run the risk of litigation and problems with tenants but this is compensated by the prospects for appreciation in the value of the property.
With the Government's announcement of the IT Corridor in Chennai's Old Mahabalipuram Road, the prices of land quoted in lakhs of rupees a few years ago now run into crores.
The yield on residential property ranges from 4-6 per cent, and this can be optimised further, taking advantage of provisions in the Income Tax Act. Investors can avail loans against rents receivable in future.
Central Business District areas offer scope for long-term investment. However, the location should be chosen with care, ensuring that there is adequate parking space, backup power and proper maintenance of the building.
With the demand for large floor space by IT companies, large investors might prefer this type of property. The yield on retailing is about 12 per cent, while for offices it is about 10 per cent.
The relaxed norms for foreign direct investment in real estate has given a boost to this sector.
However, real estate investment has poor liquidity and the transactions are time-consuming. In comparison, shares can be disposed more easily, while this is easier still for gold.
The factors affecting real estate include provisions in various Acts, particularly the Town Planning Act and the Rent Control Act.
The latter Act has adverse effect on property value.
An alternate arrangement to let out properties is the Leave and Licence System. This provision has been included in the Maharashtra Rent Control Act 1999, which is in force from March 31, 2000.
Licensee in respect of any premises or part thereof means the person who is in occupation under a subsistence agreement for licence for a given licence fee.
Licence: Where one person grants to another or to a definite number of other persons a right to do or continue to do in or upon the immovable property of the grantor, something which would, in the absence of such right, not amount to an easement or an interest in the property, the right is called a licence.
Licence is a permission to do something on an immovable property such as occupation or enjoying benefit thereon or using it for some other purpose. The intention of a licence is that the licensee will have a personal privilege but no interest in the property. A licence is a personal right; the licensee cannot transfer the licence or exercise it through an agent. The exception is a place of public entertainment. As the licence is of personal nature, when the licensor transfers the property, the licence comes to an end.
Revocation: A licence is revocable unless the licensee has acted upon the licence and executed work of a permanent nature, incurring expenses, or the licence is coupled with transfer of property. Revocation may be expressed or implied. A licence stands revoked when the licensor ceases to have any interest in the property or the licensee releases the licence or the period or specific act for which the licence was granted is over or the subject-matter of the licence is destroyed or altered or the purpose of the licence becomes impracticable or is abandoned or the employment, office or character for which the licence was given ceases to exist, or for more than 20 years the licensee ceased to use the property.
Licence or lease: A licence does not create an interest in the property but a lease creates an interest thereon. One of the tests of a lease is exclusive possession of property. Whether an agreement creates relationship of the landlord and tenant or the licensor and licensee, the intention of the parties is decisive.
A licence, which gives the licensee the right to profits or to excavate earth or to draw water is a licence coupled with transfer of the property. If a licensee constructs any permanent structure with the knowledge and consent of the licensor the licence cannot be revoked. The important thing is that the construction should be made by the licensor in pursuance of the licence granted to him.
The court will interpret the licence agreement, taking into consideration all the acts and surrounding circumstances to decide whether it is a licence or lease. Therefore the Leave and License Agreement may not be exclusive of the relationship between the parties to the agreement but the wordings of the agreement are most important.
The right to occupy premises under a lease agreement is governed by the provisions of Section 105 of the Transfer of Property Act, which states: A lease of immovable property is a transfer of right to enjoy such property, made for a certain time expressed 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 transfer by the transferee who accepts the transfer on such terms.
Thus the Act creates an interest in the property for the lessee for the duration of lease. The lessee can hold the property even after the expiry of the lease.
The right to occupy by licence system is governed by Section 52 of the Indian Easement Act which is defined as a right to do or continue to do in or upon the immovable property of the grant or something which would in the absence of such right be, unlawful and such right does not amount to easement or right in the property
The licence creates no titles or interest for the licensee. The licensee only gets the right to enter and use the premises for a limited period. The licence can be terminated at the discretion of the landlord.
PEOPLE ARE MORE RECEPTIVE IF YOU DON'T YELL...
Is any aspect of our legal system free of loop holes? Of course not. You can only do your research and make an educated decision. I deal with Nepal a lot and in general I've found people in the region of the world are much more moral and ethical in their business dealings. That is not to say that they follow American business ethics to a "t", but that a researched legitimate firm typically will do their best not to wrong a partner in business. There is no reward without risk.
In leave and license, the property owner would have nothing to gain by wronging the other party so long as reasonable agreed upon lease is maintained as current. I would only, if anything. recommend you start by going through a reputable management or real estate firm to find potential lessors.
many things are safe but not completely. scope for loop holes always exists. you must not hesitate to do what is provided in act. many people hesitate to give notices, communicate before expiration of time limit to terminate agreement or renew it. even some do not register the document. such things are taken benefit by the other parties. and many such things.
and you deal with people of criminal nature only God can save you, not guv.machinery.
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