Frequently Asked Legal Questions and Answers › Category: Property Issues › Are Lease Agreement Deductions Legal in India?

Revi Mohan asked 1 year ago

Lease Agreement Deductions SituationI hope this email finds you well. I am writing to seek clarity and advice on a situation with one of my tenants whose two-year lease agreement is set to conclude in the first week of November.

Lease Agreement Terms and Tenant Notice for Deductions

As per the terms of our lease agreement, the tenant was expected to provide a three-month notice in advance if they intended to move out, enabling us to find a suitable replacement.

Initial Agreement vs. Sudden Change of Plans

Initially, the tenant had expressed their willingness to continue the lease with us under a new rental agreement upon the completion of the lease period. However, I have recently been informed that the tenant has had a change of heart and intends to vacate the property on short notice. The reason cited is that they have found alternative accommodation at a lower rental rate.

Seeking Advice on Landlord Rights

Understanding Landlord Rights

I am seeking your expert advice on my rights and available options as a landlord in this situation. With the tenant's sudden change of mind at the last minute, I find myself without a tenant to let the property.

Lease Deposit Deductions or Repair Costs

Specifically, I would like to know if I have the right to deduct an amount from the refundable lease deposit, which could potentially cover two to three months' worth of rent as compensation for the inconvenience caused.

Preparing the Property for Future Tenants

Alternatively, would it be more appropriate to allow the tenant to vacate while making reasonable deductions for repainting and necessary repairs to prepare the property for future tenants?I expect Your insights and guidance on this matter. Are Lease Agreement Deductions Legal in India?

Are Lease Agreement Deductions Legal in India?

Remedies for Lease Agreement Deductions

In this situation, your rights and options as a landlord are as follows:

1. Non-compliance with the Notice Period:

Firstly, Your tenant is in breach of the lease agreement by not providing the required three months' notice as per the contract. In such a case, you may be eligible to enforce the terms of the contract, which could include recovering any outstanding rent for the notice period.

2. Initiate Lease Agreement Deductions:

Secondly, You have the right to deduct reasonable expenses incurred due to the tenant's early termination of the lease. This may include costs for repainting, repairs, and any other necessary refurbishments to make the property suitable for re-renting.

3. Refundable Lease Money:

Thirdly, You can deduct the agreed-upon amount from the refundable lease money. Meanwhile, it should be upto the actual expenses you have incurred as a result of the tenant's actions. Ensure that the deductions are reasonable and in compliance with the lease agreement and local tenancy laws.

4. Mitigation of Damages:

Fourthly, It is essential to make reasonable efforts to find a new tenant promptly to mitigate your losses. You should not unnecessarily delay re-renting the property.

5. Legal Consultation:

Finally, Consult with a legal professional or a local authority. Of course, you can ensure that your actions are in line with the specific tenancy laws and regulations in your jurisdiction.

The steps and regulations may vary depending on your location and the terms of the lease agreement. Finally, It is advisable to seek legal advice specific to your situation. This can ensure you are acting within the boundaries of the law.