Query regarding renting industrial land
3 years ago
Hello,
I have vacant industrial land in Kolkata. I want to rent out a section of that vacant industrial land for making factory or warehouse/godown etc. I currently don't have the means to construct any building on that section of land and then rent it out for the above mentioned purposes. So for whomever will take the land as rent and make a building suitable for their purposes, I would take 3 months rent in advance as security money and then make a rent agreement for 3 years. During the course of them constructing the building, I would deduct a certain fixed portion of the rent till the time the building is completed and then the original rent is resumed.
So my queries are as follows:
1) If I follow the method of deducting a portion of the rent till building is complete, will the building and all its facilities (constructed by the tenant for his purpose) be owned by the tenant or will the ownership at all stages remain with me (since it is my rented land he is using to construct the building) ?
2) It is very common for tenants to default on rent for months, is it possible to ensure that the tenant always pays on time (except late penalty fee) and doesn't make excuses or delays, through an air tight legal rent agreement? Is there any tangible immediate measures I can take through legal means? What kind of things can be included in this agreement since I don't have the political muscle or scaring tactics?
3) If for some reason I decide to evict the tenant, will he have any claims to the building constructed by him? Can I use the building for whatever purpose I want?
Please clarify my doubts as I am deciding to rent out my land for this purpose after your suggestions. Also please provide any tips regarding such renting.
I am here for preliminary advice.
Ayantika Mondal @ Prime Legal
Responded 3 years ago
1. You will remain the owner of the land.
2. Yes, it is possible. We can help you draft an agreement catering to your specific interests.
3. They can make such a claim, especially if you haven't paid for such construction.
It would be best if you waited long enough to raise your own capital for construction.
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1. The owner will be you as you are the one who owns the land on which the buildings shall be erected.
2. The kind of agreement you want to have can be achieved with the inclusion of a specific clause, we will be happy to help you frame it as per your interests.
3. Yes, he can make such a claim, especially if you have not compensated him for it sufficiently.
We would advise you to wait until you have sufficient capital to construct the buildings yourself, this will allow you to exercise full control over your property.
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